- Translation - AIS-CP 094/2008 August 13, 2008 Subject: Submission of reviewed consolidated and company financial statements for the second quarter of 2008 (2Q08) and clarification of a change in net profit of more than 20% To: The President The Stock Exchange of Thailand Enclosure: 1. Reviewed consolidated and company financial statements for 2Q08 in Thai and English 2. Management and Discussion Analysis (MD&A) for 2Q08 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 2Q08. 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 2Q08, the Company and its subsidiaries reported a net profit of Baht 6,333 million, increased 72.9% year on year (y-o-y) from Baht 3,663 million in 2Q07. This was attributed to service revenue growth, other income from Digital Phone Co., Ltd. ("DPC") and Total Access Communication Plc ("DTAC") dispute settlement and lower selling & administrative expenses. Service revenues excluding interconnection revenue (IC) grew 7.5% y-o-y to Baht 21,060 million in 2Q08 from Baht 19,597 million in 2Q07 due to strong revenue growth in prepaid service, non-voices, international roaming and international calls. Other operating income was Baht 1,944 million in 2Q08, consisted of a gain of Baht 1,739 million from DPC and DTAC dispute settlement. DTAC submitted 3 disputes totaling amount US$ 123.2 million to the Arbitration Institute demanding DPC, a 98.55% subsidiary, to pay for the assignment of the rights to operate the Digital PCN 1800, the facilities and equipment, and the roaming fee according to the Agreement to Unwind the Service Provider Agreement ("Unwind Agreement") plus interest charge at 9.50% per annum on the overdue payment since the dispute submission date until the full payment is made. On March 25, 2008, the Arbitral had a ruling in 2 out of 3 disputes that DPC should pay DTAC for the total amount of US$ 84.7 million, which was 80% of total claimed amount, plus interest of 9.50% per annum thereof. On May 30, 2008, DPC and DTAC reached agreement to settle and surrender all above cases and claims to terminate the Unwind Agreement as well as waive all their respect rights and release each other from any current and future obligations, whereby DPC agreed to pay DTAC for Baht 3,000 million. On June 3, 2008, DTAC has withdrawn the rest dispute. DPC has booked the total liability of Baht 4,739 million under the concession right payable as of December 31, 2007. As a result, gain of Baht 1,739 million was recognized to other income in the Company's consolidated financial statement. Selling and administrative expenses declined 20.8% y-o-y to Baht 2,613 million in 2Q08 from Baht 3,301 million in 2Q07 due to lower marketing expenses, improvement in bad debt provision and discontinued amortization of goodwill following a change in accounting policy. Marketing spending for 2Q08 was 2.4% of total revenue excluding IC, declined from 3.8% in 2Q07. Bad debt provision significantly improved in this quarter, representing 2.2% of postpaid revenues, declined from 8.1% in 2Q07 as a result of the group's conservative credit policy in screening new postpaid subscribers. Please be informed accordingly. Yours faithfully, - Signed - Mr. Vikrom Sriprataks Director Advanced Info Service Plc. Compliance Department Tel. 02-687-4278, 02-615-3277