been implemented since 2008-09, hence further cost cutting would be relatively minimal. Only certain areas such as cost of refill cards can be further reduced as we move to refill-on-mobile. In addition, to support the potential growth on data service, certain network operating expenses will also be required. Net interconnection revenue is also expected in a range of 400-700m, lower than 2009 level. As a result, consolidated EBITDA margin is expected to be 44%. Handset sales are expected to be flat despite of improving consumer demand as competition on market for low-end handset has heightened. Sales strategy will move to focus on smart phones and mobile data aircard which produce better margin. Handset business remains as a vital part to support overall strategy for AIS on growing mobile service and to support the future launch of 3G service. 3G license timeline remains uncertain as the authority of the National Telecommunications Commission (NTC) is the overhang issue. In the meantime, AIS is seeking an alternative to provide customers an experience on 3G by launching commercially 3G on the existing 900MHz frequency in a few key areas such as two major shopping complex in Bangkok, and other key provincial cities like Chiang Mai, Chonburi, and Hua Hin. These will keep AIS brand equity as market leader committing to bring new technology to the consumers. Capital management will only be considered once the Company has a clearer view on the timeline of the potential 3G license on 2.1GHz which would effect the long-term capex plan and cash needs. At present, the Company's dividend policy is to pay no less than 40% of net profit given the Company can maintain its credit rating from TRIS at AA. 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 4Q08 3Q09 4Q09 y-o-y q-o-q Service revenue 24,077 23,381 24,612 2.2% 5.3% Sales revenue 2,194 1,590 1,372 -37.5% -13.7% Total revenue 26,270 24,970 25,983 -1.1% 4.1% Cost of service (10,145) (9,958) (10,214) 0.7% 2.6% Revenue sharing (4,823) (4,881) (5,149) 6.7% 5.5% Cost of Sales (2,198) (1,459) (1,151) -47.7% -21.1% Gross Profit 9,104 8,673 9,470 4.0% 9.2% SG&A (3,249) (2,339) (2,993) -7.9% 27.9% EBITDA 10,643 11,432 11,520 8.2% 0.8% EBT 2,118 5,991 5,679 168.1% -5.2% Net Income 420 4,184 4,106 877.3% -1.9% P&L summary 2008 2009 y-o-y Service revenue 99,586 95,812 -3.8% Sales revenue 11,206 6,639 -40.8% Total revenue 110,792 102,451 -7.5% Cost of service (41,484) (40,258) -3.0% Revenue sharing (20,021) (19,861) -0.8% Cost of Sales (10,534) (6,197) -41.2% Gross Profit 38,753 36,136 -6.8% SG&A (11,054) (10,134) -8.3% EBITDA 46,463 45,892 -1.2% EBT 24,846 24,207 -2.6% Net Income 16,409 17,055 3.9% Breakdown - Service revenue 4Q08 3Q09 4Q09 Postpaid - voice 18.5% 18.1% 16.6% Prepaid - voice 57.9% 56.7% 55.5% Postpaid - data 6.3% 7.6% 8.8% Prepaid - data 8.2% 9.7% 10.0% International roaming 3.4% 2.9% 4.1% Others (IDD, other fees) 5.7% 4.9% 5.0% Sales revenue Handset 94.5% 91.0% 89.8% SIM 5.5% 9.0% 10.2% Breakdown - Cost of service Amortisation 68.8% 72.9% 70.7% Base station 9.7% 9.9% 9.6% Maintenance 7.0% 4.9% 4.1% Others 14.5% 12.3% 15.6% Cost of sales Handset 96.2% 96.6% 95.9% SIM 3.8% 3.4% 4.1% Balance Sheet summary 2008 2009 Current Assets 26,896 33,571 Fixed Assets 81,189 69,715 Total Assets 128,081 125,026 Total Liabilities 54,646 53,215 Retained Earnings 47,755 46,146 Total Equities 73,436 71,811 Key Ratios 2008 2009 EBITDA Margin 41.9% 44.8% Interest Coverage (x) 17.1 14.0 DSCR (x) 3.8 13.7 Net Debt / EBITDA (x) 0.39 0.23 Net debt to Equity (x) 0.25 0.15 Total Liabilities to Equity (x) 0.74 0.74 Free cash flow to EV (%) 10.4% 10.7% ROE (%) 22.0% 23.5% OPERATIONAL DATA Subscribers 4Q08 3Q09 4Q09 GSM Advance 2,534,200 2,755,600 2,835,800 GSM 1800 77,800 79,000 78,900 Postpaid 2,612,000 2,834,600 2,914,700 Prepaid 24,698,200 25,447,700 25,858,200 Total subscribers 27,310,200 28,282,300 28,772,900 Net additions Postpaid 123,000 84,100 80,100 Prepaid 412,600 296,200 410,500 Total net additions 535,600 380,300 490,600 Churn rate (%) Postpaid 2.0% 2.2% 2.2% Prepaid 5.2% 5.2% 5.0% Blended 4.9% 4.8% 4.9% Subscriber market share Postpaid 40% 42% N/A Prepaid 45% 44% N/A Total 44% 44% N/A ARPU excl. IC (Bt) GSM Advance 695 641 660 GSM 1800 666 622 623 Postpaid 695 640 659 Prepaid 193 184 192 Blended 241 229 239 ARPU incl. net IC (Bt) GSM Advance 647 600 619 GSM 1800 649 605 604 Postpaid 647 600 619 Prepaid 203 191 198 Blended 245 232 240 MOU (minutes: billable outgoing only) GSM Advance 546 522 535 GSM 1800 487 469 492 Postpaid 544 521 534 Prepaid 242 240 255 Blended 270 268 283 Traffic % outgoing to total minute 49% 48% 49% % on-net to total outgoing minute 76% 79% 79%