- Translation - AIS-CP 079/2007 August 14, 2007 Subject: Submission of reviewed consolidated and company financial statements for the second quarter of 2007 (2Q07) and clarification of a difference in net profit of the Company financial statements, which changed by more than 20% from the same period of last year. To: The President The Stock Exchange of Thailand Enclosure: 1. Reviewed consolidated and company financial statements for 2Q07 in Thai and English 2. Management and Discussion Analysis for 2Q07 3. Reports Review Quarterly Financial Statements (F45-3) Advanced Info Service Public Company Limited ("the Company") would like to submit the reviewed consolidated and company financial statements for 2Q07. In addition, the Company would like to clarify the reasons of a difference in net profit of the Company financial statements which changed by more than 20% from the same period of last year. As of the three-month period ended 30 June 2007, net profit on the Company financial statements was Baht 3,251 million, a decline of 41.7% from Baht 5,572 million in 2Q06 due to: 1. The Company did not have a dividend income in this period while it received a dividend income of Baht 2,017 million from Digital Phone Company Limited in 2Q06. 2. Selling and administrative expenses increased 46.8% year-on-year (y-o-y) to Baht 3,108 million in 2Q07 from Baht 2,117 million in 2Q06 resulted from higher marketing expenses, bad debt provision and staff costs. - Marketing expense was Baht 925 million in 2Q07, increased 54.4% y-o-y from Baht 599 million in 2Q06 as competitive landscape in the first half of 2007 (1H07) was much different from 1H06, when marketing activities slowed down and subscriber growth was relatively much smaller. - In term of bad debt provision, the bad debt expenses increased to Baht 437 million in 2Q07 from Baht 31 million in 2Q06 due to aggressive postpaid subscriber acquisitions and the Company's conservative provisioning policy. Despite a substantial increase in bad debt expenses, quality of account receivables remained high given over 90% of gross account receivable aging fell under 3 months overdue. 3. Cost of services increased 10.3% y-o-y and concession fee increased 4.8% y-o-y, in proportion to a 10.9% increase in service revenues to Baht 18,887 million. Interest expenses also rose to Baht 500 million in 2Q07 from Baht 382 million in 2Q06 as the Company increased total borrowings to Baht 31,309 million (including swap payable) in 2Q07 from Baht 22,956 million in 2Q06, to continue network investment to maintain its strong position in the market. Please be informed accordingly, Yours faithfully, - Signed - Vikrom Sriprataks (Mr.) Director Advanced Info Service Plc.