is expected to reach 7-10% in three years or approximately 4-7 million wireless broadband subscribers. The wireless broadband growth in Thailand will be pushed by the limited fixed broadband availability while the current 13.5m internet users are depending on dial-up access, internet caf?, and office/school connection. 3G subscription in the first year is targeting technology-savvy customers, those who already owned 3G handsets and are within 3G coverage. Following aggressive network rollout in year 2-3, majority of subscribers are expected to move to 3G with cheaper 3G handsets and substantial coverage of 3G. Network investment and opex To capture 3G growth, total capex will be 50bn over the next three years, of which 10% will be required to maintain 2G network. Network rollout plan will include new sites for 3G, increased transmissions on fibre optics, investment on switching facilities and IT-related equipments. The 3G capex will allow the company to achieve network coverage requirement from NTC ie 50% of population coverage in 2 years and 80% in 4 years. 3G network rollout will be targeted as a stand-alone network infrastructure, however in short-term, certain parts of network ie transmission, towers, and site co-location will rely on renting capacity from 2G network. The rental charges will be subjected to revenue share stipulated under the BTO contract. In addition, to facilitate seamless roaming for 3G subscribers when residing outside 3G coverage, there will be a standard commercial roaming agreement between 3G and 2G. The roaming charges are subjected to revenue sharing as stated in BTO contract. Cash opex including network operating expense and SGA will be higher during the three years. Coverage expansion and the increased number of cell sites of 3G will drive up cost of maintenance, utility, site rental and other network-related expenses. New brand for 3G and its marketing campaigns will lift marketing spending to 4-5% of total revenue from current level 3%.These cost increase will partially be offset by lower regulatory fee from 3G subscribers, hence EBITDA margin is expected to be in the range of 42-43% during the year 1-3 of 3G launch. Cash flow and capital structure Long-term focus of the company is to generate growth and sustainability of its free cash flow, hence long-term commitment to shareholders value. 3G will bring in cash flow growth over the medium to long term as cost structure shifts toward lower regulatory fee and potential growth on mobile data and wireless broadband show its significance in revenue and EBITDA generation. Over the long-term, net debt to EBITDA is expected to be 0.55x to support potential higher capex and the short-term pressure to operating cash flow. The increased gearing will also support company to keep its commitment to shareholders return. Disclaimer "Some statements made in this presentation are forward-looking statements, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "may" , "will" , "expect" , "anticipate", "intend" , "estimate" , "continue" "plan" or other similar words. The statements are based on our management's assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. FINANCIAL SUMMARY P&L summary 9M08 9M09 y-o-y Service revenue 75,509 71,200 -5.7% Sales revenue 9,012 5,267 -41.6% Total revenue 84,521 76,468 -9.5% Cost of service (31,339) (30,044) -4.1% Revenue sharing (15,197) (14,712) -3.2% Cost of Sales (8,336) (5,046) -39.5% Gross Profit 29,649 26,666 -10.1% SG&A (7,805) (7,141) -8.5% EBITDA 35,820 34,373 -4.0% EBT 22,728 18,528 -18.5% Net Income 15,989 12,949 -19.0% P&L summary 3Q08 2Q09 3Q09 y-o-y q-o-q Service revenue 24,623 23,553 23,381 -5.0% -0.7% Sales revenue 2,905 1,644 1,590 -45.3% -3.3% Total revenue 27,528 25,197 24,970 -9.3% -0.9% Cost of service (10,348) (10,020) (9,958) -3.8% -0.6% Revenue sharing (4,990) (4,849) (4,881) -2.2% 0.7% Cost of Sales (2,730) (1,599) (1,459) -46.6% -8.8% Gross Profit 9,461 8,729 8,673 -8.3% -0.6% SG&A (2,696) (2,387) (2,339) -13.2% -2.0% EBITDA 11,495 11,289 11,432 -0.5% 1.3% EBT 6,469 6,007 5,991 -7.4% -0.3% Net Income 4,533 4,197 4,184 -7.7% -0.3% Breakdown - Service revenue 3Q08 2Q09 3Q09 Postpaid - voice 18.0% 18.3% 18.1% Prepaid - voice 58.6% 58.2% 56.7% Postpaid - data 5.4% 6.7% 7.6% Prepaid - data 8.1% 9.1% 9.7% International roaming 4.4% 2.7% 2.9% Others (IDD, other fees) 5.5% 5.0% 4.9% Sales revenue Handset 95.9% 92.3% 91.0% SIM 4.1% 7.7% 9.0% Breakdown - Cost of service Amortisation 68.5% 70.5% 72.9% Base station 9.4% 10.1% 9.9% Maintenance 7.6% 5.2% 4.9% Others 14.5% 14.2% 12.3% Cost of sales Handset 97.5% 96.0% 96.6% SIM 2.5% 4.0% 3.4% Balance Sheet summary 3Q08 2Q09 3Q09 Current Assets 23,534 36,162 30,647 Fixed Assets 82,119 76,899 73,919 Total Assets 127,227 131,698 123,679 Total Liabilities 54,199 59,203 55,659 Retained Earnings 47,334 46,745 2,040 Total Equities 73,029 72,495 68,021 Key Ratios 3Q08 2Q09 3Q09 EBITDA Margin 41.8% 44.8% 45.8% Interest Coverage (x) 16.2 13.3 13.8 DSCR (x) 3.8 5.4 13.7 Net Debt / EBITDA (x) 0.42 0.26 0.31 Net debt to Equity (x) 0.26 0.16 0.21 Total Liabilities to Equity (x) 0.74 0.82 0.82 Free cash flow to EV (%) 8.2% 10.7% 10.3% ROE (%) 24.1% 23.2% 24.6% Subscribers 3Q08 2Q09 3Q09 GSM Advance 2,410,400 2,672,200 2,755,600 GSM 1800 78,600 78,300 79,000 Postpaid 2,489,000 2,750,500 2,834,600 Prepaid 24,285,600 25,151,500 25,447,700 Total subscribers 26,774,600 27,902,000 28,282,300 Net additions Postpaid 149,000 87,300 84,100 Prepaid 660,900 232,900 296,200 Total net addition 809,900 320,200 380,300 Churn rate (%) Postpaid 1.7% 2.0% 2.2% Prepaid 5.1% 4.9% 5.0% Blended 4.8% 4.7% 4.8% Subscriber market share Postpai 41% 41% n/a Prepaid 45% 44% n/a Total 45% 44% n/a ARPU excl. IC (Bt) GSM Advance 711 645 641 GSM 1800 676 631 622 Postpaid 709 645 640 Prepaid 206 188 184 Blended 252 232 229 ARPU incl. net IC (Bt) GSM Advance 661 605 600 GSM 1800 657 615 605 Postpaid 661 605 600 Prepaid 214 196 191 Blended 255 236 232 MOU (minutes: billable outgoing only) GSM Advance 550 529 522 GSM 1800 473 470 469 Postpaid 548 527 521 Prepaid 262 239 240 Blended 288 267 268 Traffic % outgoing to total minute 49% 48% 48% % on-net to total outgoing minute 75% 78% 79%