Cost of (6,411) -22.6% (6,020) -26.5% (6,361) -22.2% 6.5 0.8 service excl. IC IC cost (4,080) -14.4% 0 0.0% (4,139) -14.4% n/a n/a Cost of service (10,491) -37.0% (6,020) -26.5% (10,500) -36.7% 74.3 -0.1 Concession & (5,051) -17.8% (4,838) -21.3% (5,157) -18.0% 4.4 -2.1 excise tax Cost of sales (2,865) -10.1% (2,871) -12.7% (2,742) -9.6% -0.2 4.5 Total cost (18,406) -64.9% (13,728) -60.5% (18,399) -64.2% 34.1 0.0 Gross profit 9,939 35.1% 8,950 39.5% 10,249 35.8% 11.0 -3.0 SG&A (2,613) -9.2% (3,301) -14.6% (2,585) -9.0% -20.8 1.1 Directors' (3) 0.0% (3) 0.0% (3) 0.0% 19.3 0.6 remuneration Operating profit 7,323 25.8% 5,647 24.9% 7,661 26.7% 29.7 -4.4 Interest (394) -1.4% (417) -1.8% (374) -1.3% -5.5 5.4 expense Other income 1,944 6.9% 155 0.7% 192 0.7% 1,152.5 913.9 Exchange 42 0.1% (7) 0.0% (134) -0.5% -707.5 -131.0 gain/(Loss) EBT 8,915 31.5% 5,378 23.7% 7,344 25.6% 65.8 21.4 Minority (25) -0.1% 2 0.0% (21) -0.1% -1,254.5 17.2 interest Corporate tax (2,557) -9.0% (1,717) -7.6% (2,199) -7.7% 48.9 16.3 Net income 6,333 22.3% 3,664 16.2% 5,124 17.9% 72.8 23.6 Bt. million 1H08 1H07 y-o-y Service revenue excl. IC 42,486 74.5% 39,089 84.7% 8.7 IC revenue 8,400 14.7% n/a n/a n/a Service revenue 50,886 89.3% 39,089 84.7% 30.2 Sales revenue 6,107 10.7% 7,087 15.3% -13.8 Total revenue 56,993 100.0% 46,177 100.0% 23.4 Cost of Service excl. IC (12,772) -22.4% (11,822) -25.6% 8.0 IC cost (8,219) -14.4% 0 0.0% n/a Cost of service (20,991) -36.8% (11,822) -25.6% 77.6 Concession & excise tax (10,208) -17.9% (9,652) -20.9% 5.8 Cost of Sales (5,607) -9.8% (6,546) -14.2% -14.4 Total cost (36,805) -64.6% (28,020) -60.7% 31.4 Gross Profit 20,188 35.4% 18,156 39.3% 11.2 SG&A (5,198) -9.1% (6,427) -13.9% -19.1 Directors' remuneration (6) 0.0% (4) 0.0% 34.8 Operating profit 14,984 26.3% 11,725 25.4% 27.8 Interest Expense (769) -1.3% (865) -1.9% -11.1 Other Income 2,136 3.7% 356 0.8% 500.0 Exchange Gain/(Loss) (92) -0.2% (16) 0.0% 468.9 EBT 16,259 28.5% 11,199 24.3% 45.2 Minority interest (47) -0.1% 18 0.0% -354.1 Corporate Tax (4,756) -8.3% (3,570) -7.7% 33.2 Net Income 11,456 20.1% 7,648 16.6% 49.8 Revenue and cost breakdown Service revenue excl. IC 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Basic voice GSM Advance 22.5% 22.5% 20.6% 18.5% 17.0% 17.5% GSM 1800 1.0% 1.0% 0.9% 0.8% 0.7% 0.8% Postpaid 23.5% 23.5% 21.5% 19.3% 17.7% 18.3% Prepaid 56.3% 57.6% 59.1% 59.5% 58.5% 59.1% Non-voice Postpaid 4.6% 4.3% 4.5% 4.8% 5.2% 4.9% Prepaid 6.3% 6.2% 6.6% 6.9% 7.3% 7.7% International roaming 5.2% 4.2% 4.4% 5.1% 5.4% 4.5% Others (IDD, other fees) 4.1% 4.2% 3.9% 4.4% 5.9% 5.5% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Sales revenue 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Handset 93.7% 93.4% 94.7% 95.2% 95.0% 95.8% SIM 6.3% 6.6% 5.3% 4.8% 5.0% 4.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of service excl. IC 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Amortization 67.3% 68.4% 68.7% 69.2% 68.8% 69.0% Base station - rental & utility 9.6% 9.8% 9.3% 9.2% 9.6% 9.8% Maintenance 8.0% 7.3% 7.8% 7.6% 6.7% 6.7% Others 15.1% 14.5% 14.2% 14.0% 14.9% 14.5% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Handsets 98.2% 97.1% 96.9% 97.6% 97.6% 97.2% SIM 1.8% 2.9% 3.1% 2.4% 2.4% 2.8% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Consolidated balance sheet Bt. million 2Q08 % of 4Q07 % of total asset total asset Current Assets 24,162 18.7% 20,586 16.0% Property and Equipment 8,037 6.2% 8,561 6.6% Networks under Concession 75,301 58.4% 78,527 60.9% Intangible asset 10,314 8.0% 10,593 8.2% Defer tax asset 10,085 7.8% 10,031 7.8% Others 1,053 0.8% 644 0.5% Total Assets 128,952 100.0% 128,942 100.0% ST loan from financial institution 0 0.0% 3,492 2.7% Account Payable-trade 4,755 3.7% 4,218 3.3% Current Portion of LT Debt 4,020 3.1% 1,545 1.2% Current Portion of Concession 6,203 4.8% 8,373 6.5% Long-term Debt 26,261 20.4% 25,312 19.6% Other Liabilities 10,354 8.0% 10,541 8.2% Total Liabilities 51,593 40.0% 53,481 41.5% Total Equity 77,359 60.0% 75,461 58.5% Key ratios 2Q08 1Q08 2Q07 EBITDA (Bt. million) 11,994 12,280 10,286 EBITDA margin 42.3% 42.9% 45.4% Interest coverage (x) 18.6 20.5 13.5 DSCR (x) 6.0 6.3 3.6 Net debt / EBITDA (x) 0.37 0.23 0.54 Net debt / Equity (x) 0.23 0.14 0.30 Interest-bearing debt to Equity (x) 0.39 0.32 0.41 Total liabilities to Equity (x) 0.67 0.64 0.74 Free cash flow to EV (%) 9.5% 10.5% 5.0% ROE (%) 32.0% 26.2% 18.6% OPERATIONAL DATA Subscribers 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 GSM Advance 2,534,700 2,566,300 2,349,300 2,203,500 2,243,100 2,260,300 GSM 1800 92,000 86,800 82,600 82,400 81,400 79,700 Postpaid 2,626,700 2,653,100 2,431,900 2,285,900 2,324,500 2,340,000 Prepaid 18,462,600 20,038,300 20,772,500 21,819,500 22,762,800 23,624,700 Total subscribers 21,089,300 22,691,400 23,204,400 24,105,400 25,087,300 25,964,700 Net additions 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Postpaid 384,300 26,400 -221,200 -146,000 38,600 15,500 Prepaid 1,183,500 1,575,700 734,200 1,047,000 943,300 861,900 Total net additions 1,567,800 1,602,100 513,000 901,000 981,900 877,400 Churn rate (%) 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 Postpaid 2.5% 3.9% 4.8% 4.7% 1.9% 1.9% Prepaid 2.9% 2.7% 3.9% 3.9% 4.4% 4.5% Blended 2.9% 2.9% 4.0% 4.0% 4.2% 4.3% Subscriber 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 market share Postpaid 44% 44% 42% 41% 41% n/a Prepaid 50% 49% 47% 46% 46% n/a Total 49% 48% 46% 46% 46% n/a *new ARPU excl.IC 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 (Bt: net all-in) GSM Advance 811 741 696 744 757 743 GSM 1800 781 773 760 739 730 730 Postpaid 809 742 698 743 756 743 Prepaid 249 234 222 227 231 229 Blended 317 295 274 279 280 276 *new ARPU incl.net IC 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 (Bt: net all-in) GSM Advance 788 708 665 696 708 688 GSM 1800 781 773 760 739 730 708 Postpaid 787 710 668 698 708 689 Prepaid 263 258 233 238 237 235 Blended 326 312 282 283 282 277 MOU (minutes: 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 outgoing only) GSM Advance 587 504 511 573 594 574 GSM 1800 412 416 422 426 476 472 Postpaid 580 501 507 568 589 570 Prepaid 228 218 224 239 260 266 Blended 270 252 256 271 290 294 Traffic 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 % outgoing to total 46% 47% 48% 48% 48% 49% minute % on-net to total 56% 63% 68% 70% 71% 73% outgoing minute QUARTERLY REVIEW OF TARIFF PLANS Prepaid plans for new subscription Aow Pai Leoy Bt Bt0.75/minute, 24 hours for call to all networks 0.75/minute SIM price: Bt110, validity: 7 days SIM price: Bt300 , validity: 30 days Sawasdee Bt2/minute for on-net, Bt4/minute for off-net SIM price: Bt110,validity: 1 year Sawasdee North East Call made in northeast area: Bt1/minute Call made outside of northeast area: Bt2/minute on-net, Bt4/minute off-net SIM price: Bt110,validity: 1 year Moo-Hou Call made in northeast area : On-net: Bt2 for the first minute and Bt0.50/minute thereafter Off-net: Bt2 for the first minute and Bt1/minute thereafter Call made outside of northeast area: Bt2/minute on-net, Bt4/minute off-net SIM price: Bt50, validity: Bt100 for 30 days Sawasdee SIM Mae Yok Bt2 per minute to all networks SIM price: Bt50, Validity: Bt100 for 30 days Sawasdee Nan Nan Bt2.50 to all networks SIM price: Bt50, validity: 1 year Mini SIM Bt1.50 to all networks SIM price: Bt20, validity: 180 days Day SIM 6am-6pm: Bt0.50/minute 6pm-6am: Bt2/minute SIM price: Bt99, Validity: Bt300 for 30 days Night SIM 10pm-10am: Bt0.50/minute 10am-10pm: Bt2/minute SIM price: Bt49, Validity: Bt300 for 30 days FREEDOM SIM Subscriber can choose only 1 out of 4 options: 1. Short call: Bt1.5/minute 2. Long call: Bt2 on the first minute, Bt1/minute thereafter 3. On net Call: Bt2 on the first minute, Bt0.50/minute for call within AIS network Bt2/minute for call to other networks 4. Economy call 20 hrs: 10pm-6pm: Bt2 on the first minute, Bt0.50/minute thereafter 6pm-10pm: Bt2/minute SIM price: Bt50 Prepaid plans for existing subscribers Flexi Call more than 3 minutes, Tariff: Bt5 for the first minute, Bt0.25/minute thereafter Call less than 3 minutes, Tariff: Bt3 for the first minute, Bt1/minute thereafter Monthly charge: Bt30 Short Call Bt3 for the first minute, Bt1/minute thereafter Sabai Call Bt1.50/minute On-net Call For on-net Bt3 for first minute, Bt0.50/minute thereafter For off-net Bt1.5/minute Long Call Bt4.50 for the first minute, Bt0.50/minute thereafter Day Call Bt199/month for unlimited on-net between 5am-5pm 5pm-5am & Off-net: Bt2 for the first minute, Bt1/minute thereafter Night Call Bt159/month for unlimited on-net between 10pm-10am 10am-10pm& off-net: Bt2 for the first minute, Bt1/minute thereafter Sawasdee SIM Mae Yok Bt2 per minute to all networks Validity: Bt100 for 30 days TEXT Lover Bt99/month for 500 SMS Call charge: Bt3 for the first minute, Bt1/minute thereafter Postpaid plans for new subscription GSM Rang 99/month Monthly fee: Bt99 For On-net Call 1 hour pay only 5 minutes at Bt1.50/minute, exceed 1 hour tariff at Bt1.5/minute For off-net Bt1.50/minute GSM Rang 159/month Monthly fee: Bt159 For On-net 5am-5pm: Bt1 for 1 hour, exceed 1 hour tariff at Bt1/minute 5pm-5am: Bt2 for the first minute, then Bt1/minute thereafter For off-net Bt2 for the first minute, then Bt1/minute thereafter GSM Rang 299/month Monthly fee: Bt299 For On-net 5am-5pm: Bt2 for the first minute, then Bt1/minute thereafter 5pm-5am: Bt1 for 1 hour, exceed 1 hour tariff at Bt1/minute For off-net Bt2 for the first minute, then Bt1/minute thereafter GSM FIT 250 Monthly fee: Bt250 Bt1.50/minute to all networks free call Bt 300, SMS 50 times MMS 10 times GPRS 4 hours GSM FIT 500 Monthly fee: Bt500 Bt1.50/minute to all networks free call Bt 850, SMS 100 times MMS 25 times GPRS 10 hours GSM FIT 750 Monthly fee: Bt750 Bt1.50/minute to all networks free call Bt 1400, SMS 150 times MMS 50 times GPRS 25 hours GSM DOUBLE Monthly fee: Bt200 free call Bt 400, Bt1.50/minute to all networks INTERNET SIM 99 Monthly fee: Bt99 GPRS 30 hours free Bt3 for the first minute, Bt1/minute thereafter Postpaid plans for existing subscribers GSM Rang 299/month Monthly fee: Bt299 For On-net 5am-5pm: Bt2 for the first minute, then Bt1/minute thereafter 5pm-5am: Bt1 for 1 hour, exceed 1 hour tariff at Bt1/minute For off-net Bt2 for the first minute, then Bt1/minute thereafter GSM Tam Jai Bt250/month, free call 200 minutes Bt500/month, free call 400 minutes Bt750/month, free call 600 minutes Bt1,000/month, free call 800 minutes Exceed call tariff at Bt1.50/minute GSM FIT 250 Monthly fee: Bt250 Bt1.50/minute to all networks free call Bt 300, SMS 50 times MMS 10 times GPRS 4 hours GSM FIT 500 Monthly fee: Bt500 Bt1.50/minute to all networks free call Bt 850, SMS 100 times MMS 25 times GPRS 10 hours ARPU DEFINITION In accordance with the international practice, we have adjusted ARPU disclosure to better reflect all revenues generated from the mobile network. We believe the new definition should provide a more transparent representation of our reported service revenue and maintain the conservative approach of recognizing revenue on the net basis. The revenue items included in the calculation of ARPU figures are based on consolidated revenue according to the Thai accounting standard. The ARPU definition is outlined accordingly. ARPU (All-in) exclude IC ARPU (All-in) include IC Definition Consolidated service revenue Consolidated service revenue excluding international call excluding international call revenue from AIN and revenue from AIN divided by interconnection revenue divided average of subscribers at the by average of subscribers at the beginning and ending period. beginning and ending period = Service revenue - AIN revenue = Service revenue - AIN revenue - Gross IC revenue - Gross IC + Net IC revenue ----------------------------- ----------------------------- (beg.sub + end.sub) / 2 (beg.sub + end.sub) / 2 Revenue Voice Voice compositi Value-added service (call Value-added service (call on management, SMS, MMS, data) management, SMS,MMS, data) International roaming International roaming International call via CAT, TOT International call via CAT, TOT Others Others Net interconnection revenue Not include Not include Net interconnection revenue International call via AIN International call via AIN (AIS subsidiary) (AIS subsidiary) All categories are net of All categories are net of third-party sharing and third-party sharing and commission commission From 1Q08 onward, disclosure of ARPU is based on new definition (net all-in) only. Disclosure of "ARPU net voice + value-added service" is discontinued. Glossary of terms and definitions Operational data Subscriber Number of registered SIM at ending period whose status is not defined as churn Postpaid churn Subscribers whose payment status is overdue more than 45 days from due date Prepaid churn Subscribers who do not make a refill within 37 days after validity expires Net additions Change of number of subscribers and ending period from the beginning period New all-in ARPU excl. IC Consolidated service revenue excluding international call revenue from AIN divided by average of subscriber at the beginning and ending period. It includes voice revenue, value-added services, international roaming, international call and other revenues such as national roaming, broadband and transmission New all-in ARPU incl. IC Including net interconnection (IC revenue - IC cost) MOU Number of billed outgoing minutes generated from voice call including international call usage and SMS divided by average subscriber Churn rate Number of subscriber disconnections in the period divided by the sum of gross new subscribers in the period and the subscribers at the beginning period Non-voice (data) Includes all non-voice services e.g. SMS, MMS, GPRS, ring-back tone, infotainment and data transmission; excluding call management service e.g. call forward, conference call, call divert Financial data EBITDA margin Operating profit before depreciation on property and equipment, amortization of assets under concession, amortization of computer software, amortization of concession right, goodwill, and allowance for impairment as a percentage to total revenue Interest Coverage Interest expense for the period divided by operating profit for the period DSCR Debt service coverage ratio calculated EBITDA after tax divided by repayment (more)