Advanced Info Service company & mobile telecom

background

Dec 2015

52% 28%

20%

46%

31%

23%

Thai mobile industry

2

Key characteristics • Over 128% mobile penetration from total

population of 68mn

• Excluding multiple SIM users (approx. 35%), head-count penetration is around 83%

• Prepaid is dominant market, representing 86% of industry subscribers.

• Postpaid is accounted for 14% of industry subscribers.

• 2.1GHz spectrum licenses were granted to existing three operators in December 2012

• 1800MHz licenses were granted to AIS and TRUE in November 2015

AIS

AIS

A

A

B

B

Revenue market share

Subscriber market share

As of 3Q15

As of 3Q15

Industry structure

900 MHz 17.5MHz-Bandwidth

2100 MHz 15MHz-Bandwidth

1800 MHz 45MHz-Bandwidth

850 MHz 25MHz-Bandwidth

TOT

CAT

AIS 17.5MHz

AIS 15MHz

DTAC 45MHz

TRUE 15MHz

BTO contract

ends 2015*

ends 2018

License

ends 2015

License

ends 2025

License

License

ends 2025

M VNOs 15MHz

MVNO contract

Wholesale - Resell TRUE 15MHz

DTAC 10MHz

BTO contract ends 2018

2100 MHz 45MHz-Bandwidth

License

ends 2027

AIS 15MHz

DTAC 15MHz

TRUE 15MHz

Auctioned license NBTC Regulator

BTO contract

*The NBTC announced a temporary measure enforcing continued service to end after 900MHz auctions complete 3

1800 MHz 30MHz-Bandwidth

License

ends 2033

Current spectrum allocation

4

2100MHz License

1800MHz License

Low bands

15MHz 3G

5MHz 4G

10MHz 3G

10MHz 4G

5MHz 3G

15MHz, 4G to expire in 2033

20MHz, unused

25MHz, 2G to expire in 2018

15MHz, 2G and 4G

17.5MHz, 2G concession to expires in 2015

auction in December 2015

900MHz

850MHz

850MHz

10MHz, 3G concession to expire in 2018

15MHz, 3G contract to expire in 2026

all expire in 2027

to expire in 2033

Key milestones of Thai telecoms

5

1990 BTO contract • Telecommunications services in Thailand were provided exclusively through two state enterprises, i.e. TOT and CAT. The TOT’s primary responsibility was to provide domestic telephone service while the CAT focused on international services.

• The private operator could only operate business with the state enterprises in form of Build-Transfer-Operate (BTO) Contract. BTO contract started during early 1990s with the terms of 25-27 years.

Under BTO contract, mobile operator is entitled to

• Build and raise capital for investment in the cellular network • Transfer the network ownership to the grantor (TOT/CAT) • Operate the network and service commercially • Share revenue with the grantor of 20-30%

2000 Liberalized telecom industry

• Frequency Allocation Act B.E.2543 (A.D.2000) was enacted and stipulated the National Telecommunications Commission (NTC), an independent regulator, to be formed.

Key milestones of Thai telecoms

6

2010

2004 NTC • The first independent regulator, the National Telecommunication Committee (NTC), was formed and consisted of 7 members.

2007 Interconnection charge (IC)

Mobile Number Portability (MNP)

• Operators provide Mobile Number Portability Service (MNP) to enable customers to retain their mobile numbers when changing subscription from one operator to another.

• NTC established interconnection regulation. The three operators i.e. AIS, DTAC and TRUE signed IC contracts at Bt1/minute**. (**IC rate was changed to Bt0.45/min, started 1 July 2013)

Key milestones of Thai telecoms

7

2012 3G 2.1GHz licenses

2010 NBTC (license base)

• The new law of “Frequency Allocation Act B.E.2553 (A.D.2010) ” was enacted in December 2010. The law stipulated the new regulators called the national broadcasting and telecommunication commission (NBTC) to regulate the telecom and broadcasting industries.

• NBTC officially granted 3 licenses of 2x15MHz each on 2.1GHz spectrum to operators on December 7, 2012

• The license scheme includes upfront bidding fee and annual license fee paid to NBTC.

The NBTC commissioners • 11 members with expertise in telecommunications,

radio, TV broadcasting, education, culture, economics, public laws, security and consumer protection

• selected by the senate • 6 years term and shall not be re-appointed

2015 1800MHz and 900MHz licenses

• On November 25 and December 4, 1800MHz licenses were granted to AIS and TRUE respectively.

• 900MHz license auction took place on December 15.

BTO contract versus License

8

BTO* License

Grantor TOT/CAT NBTC

Period Till 2013-18 15 years

Asset ownership TOT/CAT Operator

Fee 20-30% revenue share

5.25% of revenue (Type 3 license)

What AIS has (1) 900MHz GSM contract with TOT (2) 1800MHz GSM with CAT (under

subsidiary DPC)

(1) IDD license (under subsidiary AIN)

(2) Fixed line/ISDN/data (under SBN)

(3) Fixed-wireless broadband/fixed & wireless network (under AWN)

* BTO is Build Transfer Operate contract Note: Operators have to pay a numbering fee at Bt2/number/month to the regulator

Fee structure BTO contract

9

=

=

+

Revenue share

Access charge

BTO contract Regulatory fee

+ was ceased since 2007

=

Effective 24.7%

AIS 20% prepaid

30% postpaid

30% 18% prepaid

Bt200/month postpaid

AIS

DTAC

True Move

DPC

paid to TOT

paid to CAT

paid to TOT

Fee structure license system

10

*Type 3 license is categorized by NBTC as facility-base (require investment in network infrastructure e.g. fixed-line, mobile, IDD). The other two types of licenses (e.g. ISP) are subject to different fee structure.

+

Annual license fee

USO fee Type 3 License* fee

=

paid to NBTC

1.5% 3.75%

paid to NBTC

5.25%

Upfront license bidding cost

Bt13.5 - 14.6bn Bt39.8 – 41bn

for 2x15MHz of 2.1GHz license

for 2x15MHz of 1800MHz license

11

• AIS, DTAC and TRUE agreed to pay IC rate at Bt1/minute.

Interconnection charge (IC) or termination charge is a bi-lateral agreement charge levied by network operators on other service providers to recover the costs of the interconnection facilities provided by the network operators.

Interconnection charge

2007

2013 Bt0.45/ minute

Bt1 / minute

• The new IC rate of Bt0.45/minute was applied from 1 July 2013.

AIS

DTAC TRUE

Interconnection charge

2015 Bt0.34 / minute • The new IC rate of Bt0.34/minute was applied from 1 July 2015.

12

Roaming happens when one operator allows its customers to originate/receive traffic using network of other operators. Roaming ensures that customers have seamless connection experience.

National roaming

provide roaming service

• subscriber uses 2G handsets

• subscriber makes/receives a call outside of 3G coverage

3G company License base

2G company BTO contract

pay roaming charge • Provide network capacity

to support traffic originated/received from customers of 3G company.

• subject to 30% revenue sharing to TOT/CAT

13

• NBTC stipulated the price ceiling for voice service at average of Bt0.45/minute since 2013.

• The price cap mandate stipulated for the Significant Market Power (SMP) i.e. AIS and DTAC.

Key recent regulations

Infrastructure sharing

Price cap

• NBTC announced the mandate for network infrastructure sharing among operators i.e. tower, land, site facilities, etc. in April 2013.

• The action is subject to availability of network capacity.

• In compliance with NBTC mandates • Customer gets minimum 30 days balance for every

prepaid top-up value. • The value can be accumulated for 365 days.

Prepaid validity

Prepaid Identification

• Since 1Q15 NBTC asked prepaid customers to come to register their identification to prevent potential frauds. Prepaid customers who didn’t register by July-15 would be unable to continue their service.

AIS Background

14

AIS moving toward Digital Life Service Provider

15

3G-2.1 GHz • 97% population coverage • 23,800 BTS as of 2Q15 and

target 29,000 BTS in FY15

4G-1800MHz auction • Expected to be in

4Q15

Fixed broadband • Official launch in 1Q15 • Invest Bt1bn in FY15 for 250k

capacity • Technology FTTH and VDSL • Target 80,000 subscribers

Rationale • Moving toward convergence • Leverage from our fiber optics • Demand for better technology • FBB penetration rate is still low

(24%)

Digital content • New source of revenue • Support mobile and fixed broadband

business • Partnership model

Digital Life Service

Provider

Digital content

52% revenue market share 37m 3G-2.1GHz users

3G 95%

2G 5%

Voice 44%

Non-voice 47%

IR 2%

Others 7%

Breakdown of customers Breakdown of Service Revenue

No.1 mobile operator in Thailand

38m users

Quick introduction

• Officially launched 3G-2.1GHz service in May-13 and expanded coverage to all 77 provinces with 97% population coverage under a 15-year license of 2x15MHz bandwidth.

• 4G service on 1800MHz, under the new spectrum license, is expected to be commercially launched in January 2016.

• Provide nationwide 2G network on 900MHz under Built-Transfer-Operate contracts which expired in Sep-15.

• The 900MHz remedy will be until the auction is completed in December 2015.

AIS at a glance

16

Data as of 3Q15

Pushing varieties of 3G and 4G handsets into the market

17

AIS OLA POP 690 Baht

LAVA B 3.5" 1,690 Baht

• LAVA 4G smartphone was launched in Se

ptember 2015.

• Price range Bt2,490 – 7,290

3G handset for trade-in campaign New LAVA 4G smartphone

• Only for AIS customers

• Trade-in 2G phone with new 3G

phone with Bt200 top-up

• Get new 3G feature phone for free

or new 3G smartphone at low prices

• Lava + OLA sales were 1.9mn units in 3Q

15, compared to 2.5mn units in FY14

LAVA 4.0" 2,190 Baht

AIS subscriber base

18

Data users (% to total subscribers)

27% 34% 34% 45% 54%

Smartphone penetration

12% 17% 27% 38% 53%

44.3

20

Data users

Total subscribers

41.0

14

35.7

12

33.5

9.0

Million subscribers

FY11 FY12 FY13 FY14 3Q15

37.8

20

AIS brand positioning

19

Postpaid

White collar

youngster

Prepaid

young professional

Tech savvy

High value customer

Light user Basic user

Focus on quality in all dimensions to serve individual needs

Basic users

Pre-teen

Distribution channels

20

460+ exclusive dealers (telewiz)

Refill on Mobile

eService

ATM

mPay Auto Topup

+ 400,000 electronic top-up channels

Nationwide physical channels

10,000+ sub dealers & modern trades 80% of top up value paid through

electronic channels

90+ AIS Shops

800+ Green Smile Shop

2015 targets

Q-DNAs: Quality in all dimensions

21

Device

Network

Application

Service

Deliver superior quality to maintain leadership

Bringing full range of best-in-class quality devices

to customers

Providing the largest and widest coverage of

high quality networks

Ensuring delightful customer experiences

through every touch points

Delivering quality applications that amuse, entertain, raise productivity

at work or at play

Free Google Internet Google Free Search, Chat, Plus

Unlimited Social Life FB, Whatsapp, LINE Package

myCloud Store your digital assets

PhotoBox Discover photos that matter

mySticker Shop 1000+ LINE Stickers

Calling Post Express feeling on the phone

Newsloop Discover the best of Thailand and the world

Music Store (HD) 50k+ HD music & concerts

Movie Store (HD) The largest movie store

Live TV 30+ Live TV channels

Bookstore The largest Thai e-bookstore

Privileges App Discover nearby privileges

mPay MasterCard Online shopping for everyone

Guide & Go World first Social Navigator

mPay Rabbit Bring convenience to mass transit and beyond

Social Life Fun Life Local Life

Game Zone Unlimited Game Play

22

GMMz on AIS Entertainment

AIS On Air English Premier league

Keep strengthening the best 3G network at world standard

23

2013

2014 97% population 21,300 BTS

80% population 77 provinces

Bt36bn capex in 2015

• build a stand-alone network to better position for long-term growth • New radio/core networks/transmission • Some new towers

3G 2.1GHz network plan

May-13 20 provinces 3,500 BTS

97% population 19,300 BTS

1H14

2015F 97% population 29,000 BTS

• commence fixed broadband business

• expand more shops to increase customer touch points • new guidance of CapEx is lower

because some payments were deferred and some projects were delayed

Integrated mobile operator

24

To utilize benefits of each technologies based upon optimization framework

3Q15 Key financial highlights

25

1) 900MHz-BTO refers to the subscription of customers under 900 & 1800MHz Build-Transfer-Operate contract 2) 2.1GHz-License refers to the subscription of customers under 2.1GHz license issued by NBTC. The subscribers who are holding 2G devices have to roam on the 900MHz network.

Bt million 3Q14 2Q15 3Q15 % YoY % QoQ 9M14 9M15 %YoY

Service revenue ex. IC 29,382 30,468 29,956 ▲2.0% ▼1.7% 87,953 90,734 ▲3.2%

Sales revenue 4,208 5,733 5,356 ▲27% ▼6.6% 14,878 19,376 ▲30%

Total revenue ex. construction 35,355 38,123 36,769 ▲4% ▼3.6% 108,284 115,429 ▲6.6%

Cost of service ex. IC 13,385 13,217 13,124 ▼1.9% ▼0.7% 40,254 40,046 ▼0.5%

Total SG&A 4,643 4,876 4,896 ▲5.5% ▲0.4% 13,792 14,448 ▲4.8%

EBITDA 16,442 18,068 17,431 ▲6% ▼3.5% 48,701 53,572 ▲10%

Consolidated EBITDA margin 46.5% 47.4% 47.4% ▲90bps flattish 45% 46.4% ▲140bps

Service EBITDA margin 53.1% 55.4% 57.4% ▲430bps ▲200bps 52.1% 55.9% ▲380bps

Sales margin -2% 2% -11.1% ▼910bps ▼1310bps 0.2% -0.8% ▼100bps

Capex 10,236 8,883 8,765 ▼14% ▼1.3% 25,696 24,813 ▼3.4%

EPS 3.01 3.31 2.90 ▼3.8% ▼13% 9.05 9.54 ▲5.4%

Disclaimers

26

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.

AIS INVESTOR RELATIONS http://investor.ais.co.th

investor@ais.co.th TEL. +662 0295117