- Translation - AIS-CP 064/2008 May 14, 2008 Subject: Submission of reviewed consolidated and company financial statements for the first quarter of 2008 (1Q08) and clarification of a difference in net profit of the consolidated and 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 1Q08 in Thai and English 2. Management and Discussion Analysis for 1Q08 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 1Q08. In addition, the Company would like to clarify the reasons of a difference in net profit, which increased by more than 20% from the same period of last year. In 1Q08, the Company and its subsidiaries reported a net profit of Baht 5,124 million, increased 28.61% year on year (y-o-y) from Baht 3,984 million in 1Q07 due to the following reasons; 1. Service revenues excluding interconnection revenue (IC) increased 9.9% y-o-y to Baht 21,426 million in 1Q08 from Baht 19,493 million in 1Q07 as a result of strong revenue growth in prepaid,non-voices, and international calls. 2. Selling and administrative expenses declined 17.3% y-o-y to Baht 2,585 million in 1Q08 from Baht 3,126 million in 1Q07 due to lower marketing expenses, improving bad debt provision and discontinue amortizing of goodwill following a change in accounting policy. Marketing expense in 1Q08 declined 26.5% y-o-y. In 1Q08, marketing expense account for 2.6% of total revenue excluding IC, compared to 4.5% in 4Q07 and 3.7% in 1Q07. Marketing expense is usually low during the first quarter of the year and is highest in the forth quarter. Bad debt provision continued to improve in this quarter, representing 2.5% of postpaid revenue,declined from 4.1% in 4Q07 and 6.6% in 1Q07. This showed the improved quality of postpaid subscribers from the previous year as the acquisition strategy of postpaid subscriber has been realigned to balance between revenue growth from low-quality subscribers and risk of bad debt expense. Since 1 January 2008, there was a change in the Company's accounting policy as follows; During 2007, the Federation of Accounting Professions issued Thai Accounting Standard (TAS) 43 revised 2007) "Business Combinations" which is effective for accounting periods beginning on or after 1 January 2008. TAS 43 (revised 2007) requires that the acquirer shall, at the acquisition date,recognize goodwill acquired in a business combination as an asset at cost. After initial recognition,goodwill shall be measured at cost less any accumulated impairment losses. Transitional provisions shall be applied to any goodwill carried in the financial statements at the beginning of the first annual accounting period beginning on or after 1 January 2008 that arose from a business combination for which the agreement date was before 1 January 2008. The transitional provisions are to discontinue amortizing such goodwill; eliminate the carrying amount of the related accumulated amortization with a corresponding decrease in goodwill; and from the beginning of the first annual period beginning on or after 1 January 2008 test all goodwill arising from business combinations for impairment in accordance with TAS 36 (revised 2007) "Impairment of Assets". The Company and its subsidiaries have, accordingly, changed their accounting policy for goodwill and negative goodwill prospectively from 1 January 2008. The effect of the change in accounting policy on the consolidated financial statements for the three-month period ended 31 March 2008 is to reduce the charge to the statement of income resulting from the amortization of goodwill that would have been recognized under the previous accounting policy by approximately Baht 292 million, with a corresponding increase in reported profit for the period. Please be informed accordingly, Yours faithfully, - Signed - Mr. Vikrom Sriprataks Director Advanced Info Service Plc. Compliance Department Tel. 02-687-4278