With reference to a letter of TOT Public Company Limited ("TOT") to Advanced Info Service Public Company Limited (the "Company"), which was received by the Company on 2 February 2011, demanding the Company to pay an additional revenue sharing due to the reduction of revenue sharing rate with respect to pre-paid services, the deduction of the cost relating to the roaming activities for the total amount of 36,995,636,889.80 Baht and due to the deduction of excise tax payment from the revenue sharing including VAT, penalty and surcharge for the total amount of 36,816,942,676.13 Baht plus interest at the rate of 7.5 percent per annum to TOT within 15 February 2011. The Company would like to inform as follows: 1. For the reduction of revenue sharing rate with respect to pre-paid services and the deduction of the cost relating to the roaming activities: 1.1 Pursuant to the above-mentioned TOT' letter, TOT has raised some part of the judgment of the Supreme Court's Criminal Division for Person Holding Political Positions, case no. Red OrMor. 1/2553 (the "Judgment") as the ground of its demand against the Company. In fact, the said Judgment has no binding effect to the Company at all since neither TOT nor AIS are the parties to the said case. 1.2 The said Court did not give judgment to revoke the amendment no. 6 regarding pre-paid services ("Amendment No.6") and amendment no. 7 regarding the roaming activities ("Amendment No. 7") (collectively hereinafter referred to as "Amendments") of the Agreement Permitting Undertaking of Cellular Mobile Telephone Services (the "Concession"). Further, the Judgment did not rule that the Company has committed a breach by failure to comply with the terms and conditions of the Concession nor that the Amendments have had no binding effect between TOT and the Company at all. 1.3 The Amendments are still valid and binding upon both parties and, in the past, the Company has been completely and correctly complying with the terms and conditions of the Amendments. Thus, the Company is not obligated to make any additional payment of revenue sharing as demanded by TOT. 1.4 Definite evidence concerning the intention and reason for making the Amendments, which is available to TOT and other government authorities, indicates that the Amendments were made by taking into account of the public interest, especially the mobile phone users who have been able to access into cheaper service tariff whilst TOT has gained much higher revenue sharing. 2. For the deduction of excise tax payment from the revenue sharing; 2.1 It was the government policy which aimed to convert certain amount of revenue sharing under the Concession into the excise tax payment in connection with the transformation of the then Telephone Organization of Thailand to a public company limited under the main principle that: (i) there shall be no damage to the State who would receive the same revenue sharing; and (ii) no additional financial burden to the private operator and the service users. Thus, after summing up the excise tax payment and the revenue sharing (after deduction of excise tax), the State (i.e. the Ministry of Finance - the Excise Department) and TOT, whose 100% of its shares are held by the Ministry of Finance, would receive the same net income without any damage. 2.2 TOT is obliged to comply with the government's policy and the resolutions legitimately passed by the cabinet, which applied to all mobile phone operators, that they were required to deduct the excise tax payment from the revenue sharing before delivering to the contractual party. It was TOT who informed the Company to pay such excise tax and deduct such payment from revenue sharing in accordance with the cabinet's resolution with which the Company was faithfully complied. 2.3 The said court did not rule that the cabinet's resolution regarding such excise tax was unlawful and did not revoke or cancel such cabinet's resolution. 2.4 During B.E. 2546 to 2550 which there were the deductions of excise tax, TOT has never demanded the Company to pay any additional revenue sharing. Rather, TOT has confirmed that it has completely received the revenue sharing in accordance with the Concession by issuing receipts and tax invoices together with returning bank guarantees which were placed as security for the payment of the revenue sharing by the Company. 2.5 With respect to VAT, penalty and surcharge demanded, the Company is not obliged to make such payment. Given such tax obligation actually exists; it would be TOT, as the recipient of payment, to be responsible for such tax payment under the Revenue Code. In the past, TOT has ever questioned the Revenue Department whether it actually has the authority under the law to collect such tax payment. 2.6 This TOT's claim is a duplication of the claimed amount with respect to excise tax which TOT has raised earlier on 22 January 2008 in the pending arbitration process at the Arbitration Institute. However, the Company will send a letter opposing such demand to TOT in due course. In addition, the Company has known from the news that the Cabinet has a resolution on 1 February 2011 instructing the Ministry of Information and Communication Technology ("ICT") to negotiate with the Company with respect to the amendments to the Concession and report to the Cabinet within 15 days. Presently, the Company has not been contacted by TOT, ICT or any other state authority. ______________________________________________________________________