Financial Results 3Q16

Advanced Info Service Plc.

8 November 2016

3Q16 Executive summary

• Service revenue (excluding IC) momentum improved to 2.2% YoY and 1.5% QoQ in

3Q16, underpinned by improved 4G speed and footprints, reaching 65% of population

coverage, amid intense market competition.

• Fixed-broadband business, continued to expand to 3mn homepass in 28 cities, and

recorded195K subscribers at ARPU of Bt498.

• In 3Q16, EBITDA decreased 13% YoY and 10% QoQ from active marketing campaign,

handset subsidy and TOT payment. EBITDA margin stood at 41.1% in 3Q16.

• Aggressive handset campaigns to acquire and retain subscribers reflected in

negative sales margin ( -16%) and higher marketing spending.

• Toward partnership deal with TOT, AIS started paying monthly rental for tower and

equipment (Bt1.4bn/quarter) from 3Q16 and expected to record the cost for 2100MHz

commercial trial agreement in 4Q16.

• 9M16 service revenue (excluding IC) improved 0.2% and aligned with the full year

guidance. The fast network rollout resulted in high capex (Bt37bn vs Bt40bn guidance).

EBITDA margin was 41.2%, above the FY16 guidance of 38-39% while market

competition would be the pressure toward year end.

2

3Q16 Financial Highlights

Bt mn 3Q15 2Q16 3Q16 % YoY % QoQ 9M15 9M16 %YoY

Service revenue ex. IC 29,956 30,169 30,626 ▲ 2.2% ▲1.5% 90,734 90,944 ▲0.2%

Sales revenue 5,356 4,882 5,064 ▼5.5% ▲3.7% 19,376 15,609 ▼19%

Total revenue ex.

Construction 36,769 36,482 37,096 ▲0.9% ▲1.7% 115,429 110,830 ▼4.0%

Cost of service ex. IC (13,124) (11,309) (13,537) ▲3.1% ▲20% (40,046) (37,538) ▼6.3%

SG&A (4,896) (6,460) (7,260) ▲48% ▲12% (14,448) (21,815) ▲51%

NPAT 8,616 9,596 6,529 ▼24% ▼32% 28,361 24,198 ▼15%

EBITDA 17,431 17,012 15,257 ▼13% ▼10% 53,572 45,684 ▼15%

EBITDA margin 47.4% 46.6% 41.1% ▼630bps ▼550bps 46.4% 41.2% ▼520bps

Sales margin -11.1% 2.3% -16.1% ▼500bps ▼1,840bps -0.8% -4.6% ▼380bps

Capex (8,765) (11,693 ) (13,236 ) ▲51% ▲13% (24,813) (37,031) ▲49%

EPS 2.90 3.23 2.20 ▼24% ▼32% 9.54 8.14 ▼15%

3

13.8 15.5 16.2

39.0 46.6

1.7 1.6 1.7 5.2 5.0

36 146 232 55

480 14.5 12.9 12.5

46.5 38.9

3Q16 Revenue Breakdown

Voice revenue Non-voice revenue FBB revenue

Inter revenues & others Net Sales & margin Net IC

Cannibalized voice revenue due to

rising smartphone adoption Growing data usage supported by

improved 4G network and smart

device availability

Expanded AIS Fibre footprints and

increased subscribers

Slightly improved QoQ from

international roaming revenue

(Bt bn) (Bt bn) (Bt mn)

Dropped due to lower IC revenue both YoY and QoQ

Attractive handset offerings to

acquire and retain customers

resulted in negative handset margin

4

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

-14% YoY

-2.8% QoQ

-16% YoY

+18% YoY

+4.7% QoQ

+19% YoY

+546% YoY

+59% QoQ +771% YoY

(Bt bn) (Bt mn) (Bt mn)

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

-1.5% YoY

+0.6% QoQ

-4.7% YoY

143 85 51

555

230

-64% YoY

-40% QoQ

-59% YoY

-595

114

-814

-157 -717

-11.1%

2.3%

-16.1%

-0.8% -4.6%

1.7 3.1 3.8 4.7

12.0

2.3 3.1 4.1 6.9

9.7

3.3 2.2 1.8

11.5 8.6

5.9 4.4 6.2

16.7 14.5

3Q16 Cost Breakdown

Regulatory fee D&A Network Opex

Marketing Admin & Staff Bad debt

Fully operated under license and

representing 5.8% to service revenue

in 3Q16

YoY, dropped from fully amortized

2G asset in 3Q15. QoQ, increased

from network expansion.

Started to pay TOT for use of towers &

equipment at Bt1.4bn/quarter in 3Q16

Aggressive handset campaigns and

mass advertisement to enhance

customer perception

(Bt bn) (Bt bn) (Bt bn)

Remained at manageable level Increased from higher staff cost

5

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

-47% YoY

-20% QoQ

-25% YoY

+5% YoY

+40% QoQ

-13% YoY

+82% YoY

+31% QoQ

+40% YoY

(Bt bn) (Bt bn) (Bt mn)

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

+121% YoY

+23% QoQ

+156% YoY

2.8 2.9 3.0

8.5 8.5

+7.5% YoY

+2% QoQ

+0.3% YoY

305 320 350

995 954

3.1% 3.2% 3.3% 3.5% 3.1%

% to postpaid revenue

EBITDA reflected continued investment on network and customer perception

3Q16– EBITDA (YoY)

15,257

(1,693) (219) (92) (2,348)

(71)

673 1,575 17,431

3Q15 Service revex.IC

Service costex.IC

Reg fee Net sales Net IC SG&A Others 3Q16

3Q16 – EBITDA (QoQ)

15,257 (929) (927)

(34) (796)

457 454

19

17,012

2Q16 Service revex.IC

Service costex.IC

Reg fee Net sales Net IC SG&A Others 3Q16

6

(Bt mn)

(Bt mn)

-13% YoY

-10% YoY

Savings from fully

operated under license

Handset subsidy and

marketing spending to improve

customer perception

Ramp up 4G network

and TOT payment

TOT payment of

Bt 1.4bn/quarter

starting from 3Q16

EBITDA and NPAT reflected continued investment

• Net profit dropped both YoY and QoQ from

higher finance cost and D&A.

• For 9M16, excluding one-time deferred tax asset

and USO fee booked in 1Q16, net profit would

dropped 12% YoY. mainly from softer EBITDA,

higher D&A and finance costs.

• In 3Q16, EBITDA declined both YoY and QoQ,

mainly from aggressive handset campaigns and

higher network opex and TOT payment starting

from 3Q16.

• For 9M16, EBITDA margin remained strong above

the FY16 guidance of 38%-39% while the

competition could be pressured toward year end.

7

EBITDA

17.4 17.0 15.3

53.6 45.7

Net profit

47.4% 46.6% 41.1%

46.4% 41.2%

EBITDA margin (%)

Bt bn

NPAT margin (%)

Bt bn

23.4% 26.3% 17.6%

24.6% 21.8%

8.6 9.6 6.5

28.4 24.2

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

-13% YoY

-10% QoQ

-15% YoY

-24% YoY

-32% QoQ

-15% YoY

3Q15 2Q16 3Q16 9M15 9M16 3Q15 2Q16 3Q16 9M15 9M16

2.2 2.4 2.7 3.4

4.1

1.7 1.9 2.0 2.4 2.7

3Q15 4Q15 1Q16 2Q16 3Q16

• AIS recorded 39.9mn subscribers, representing

518k net additions. Net addition improved in both

postpaid and prepaid segments, supported by

attractive handset offerings.

• Postpaid customer base expanded to 16% of

subscriber base from 15% in 2Q16.

39.9mn subscribers, supported by both postpaid and prepaid segments

8

ARPU (Bt/sub/month)

MoU (min/sub/month)

VoU (GB/data sub/month)

postpaid prepaid

Subscribers (mn)

Net addition (‘000)

339 330 320 313 305 283 286 272 234 213

143 68

-19

400 296

-2,394

609 459 26

222

3Q15 4Q15 1Q16 2Q16 3Q16

5.4 5.4 5.4 5.8 6.1

32.4 33.1 33.5 33.5 33.8

630 612 608 608 597

192 195 194 188 186

postpaid prepaid

• Blended ARPU was stable QoQ at 248. Postpaid

ARPU declined from expansion to mid-tier segment

while prepaid ARPU declined due to migration of

high-tier customers to postpaid.

• As VoU continued to increase from higher smart

device penetration and improved 4G network, MoU

dropped from data cannibalization.

235

36

272

30

82

107

17 11 26 14 14

112

117

14

Assets Liabilities

Equity

cash

spectrum license

others

spectrum license

payable

interest-

bearing

debt*

others retained earnings

others A/R

PPE

B/S 3Q16

9M16 Cash flow 3Q16 Balance Sheet

*interest-bearing debt excludes net forward/swap receivable of Bt644mn

A/P

Net debt to EBITDA = 1.53x Bt13.8bn = Free Cash Flow • CAPEX to service revenue was at 41% from fast 4G networ

k rollout

Average finance costs = 3.0% Maintain investment grade credit ratings:

• Fitch: national rating AA+ (THA), outlook stable

• S&P: BBB+, outlook negative

9

Strong financial position supporting future investment

(Bt bn) (Bt bn)

51

9.6

37

13.3

35 37

5.6 8.1 1.0 1.0

Operating Investing Financing Net cash

Opera

ting

cash flo

w

Incom

e

tax p

aid

CA

PE

X

ST

loan

Cash

incre

ased

LT

loan

Div

idend

paid

Spectr

um

lic

ense

paym

ent

Paym

ent

of LT

borr

ow

ings

Oth

ers

• Higher leverage from investment to capture long-term

growth

ROE = 90% • Maintain efficient share capital and 100% payout

Interest bearing debt to Equity = 2.94x

• Strong financial position with ability to gear up to

support potential growth opportunity.

10

Lifted up 4G capacity and coverage

7.0 10.0

15.5

21.2

4Q15 1Q16 2Q16 3Q16

4G network expansion

(‘000 base stations)

1800MHz

license granted 2100x15MHz

1800x15MHz

900x10MHz

2100x15MHz

TOT partnership

Improved network capacity with Carrier Aggregation (CA)

3G 4G

4G

3G 4G

• 21.2k 4G base stations after first launch in

Jan-16 while strengthening 3G capacity.

• Achieved 65% 4G network coverage,

aligned with the 80% target for FY16

• Increased additional bandwidth to enhance network

competitiveness:

• Jul-16: secured 900MHz spectrum license

• Sep-16: entered into commercial trial

agreement on 2100MHz spectrum with TOT

• With additional bandwidth, we deployed 2CA/3CA

in some key areas. This allows better speed and

network utilization.

900MHz license

granted

3G 4G 2G

Handset Subsidy shifted to acquisition in

postpaid segment

11

• Handset migration campaign has been scaled

down after 2G service can be continued but

remained to protect market share.

• Handset subsidy focuses on smartphone for

postpaid segment with potential revenue

quality.

• Attractive discount or free phones with

contracted price plan are offered.

• Costs are reflected in higher marketing expenses

and more negative handset margin.

• Effectiveness of campaigns is reflected in higher

prepaid net add and continued postpaid net add.

26 222

400

296

2Q16 3Q16

Net additions ('000 subs)

Prepaid Postpaid

12

Exclusive contents on AIS PLAY & AIS PLAYBOX

• After first launch in Jan-16, we registered 1.2mn active users on AIS PLAY, and 172k active users on

AIS PLAYBOX, supported by exclusive contents.

• Building user base through partnership models, offering both live and on-demand exclusive contents on

AIS PLAY (mobile platform) and AIS PLAYBOX (home entertainment).

Reality shows

Live concerts & music shows

Exclusive contents

Mobile

Fixed broadband

Paralympic games

Olympics games

Multi platforms

TV Video on demand

Karaoke HooQ Sports

12,000 26,000

44,000

72,000

115,000

195,000

2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

Fixed broadband

Continue to scale up business & coverage expansion

Power Home package

Higher speed at same price point

• More than 4 times faster sub

acquisition run rate per month when

compared to last year

• Aim for full coverage in Bangkok by

year end, with more homepass

13

Max speed

(download/upload) Monthly package

20/7 Mbps

No PLAYBOX

20/7 Mbps

50/10 Mbps

New customers Bt590 Bt750 Bt888

AIS postpaid subscribers get 10% discount

Bt531 Bt675 Bt799

Special for Serenade customers

- - Bt699

Cover 3mn homepass

in 28 provinces

Partnering with M.K. Real Estate Development to

offer one-year AIS Fibre service to customers

AIS Fibre subscribers

FY16 Guidance

14

9M16-Actual 2016 (Maintained)

Service revenue (ex IC) +0.2% YoY Slightly increase

Handset sales -19% YoY Decline

Handset margin -4.6% Negative margin

EBITDA margin 41.2% 38-39%

CAPEX Bt37bn Bt40bn

Dividend N/A 100% payout ratio

Disclaimers Some statements made in this material are forward-looking statements with the relevant assumptions, 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. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.

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