Investor Presentation Advanced Info Service Plc. September 2017 Ticker: ADVANC (SET) AVIFY (ADR) 1
AIS: Digital Life Service Provider Continue leading in Expand strongly into Partner to offer differentiated “ Mobile ” “ Fixed broadband ” “ Digital service ” Mobile revenue market share Focused on the five key areas Subscriber market share (approx.7.9mn) 26% 48% 33% 1Q17 23% 2Q17 Video Game 26% 6% 38% 2Q17 breakdown Mobile IoT money Prepaid Postpaid Bt32bn 3 rd year of operation 17% Cloud Non- 37% covering 28 key cities 58% voice out of 77 provinces 83% 55% Voice 34% 5.2 m homepass* out of Service revenue Subs % to service total 21.5m households 40.5mn revenue Digital life service provider with convergence products Mark leadership in mobile data Aim to be a significant player in 3 Pursue long-term growth with • Nationwide 4G/3G/2G coverage years integrated services • Leverage existing nationwide fibre • Emphasize partnership & with focus on network quality • Focus on scale to maintain cost infrastructure ecosystem • Defensive value to core mobile • Leverage the large sub base and advantage business telecom infrastructure *Homepass is defined as a number of households within AIS fibre service area. This includes the homes that require additional investment 2 i.e. port, last miles to be able to get connected.
Mobile: Build on leadership in mobile data Nationwide coverage of 98% in 2G/3G/4G Deploy 2CA in all districts and 3CA in key cities Continue to strengthen network quality and CAPEX 2CA and 3CA efficiency supporting Bt23bn growing demand in network quality mobile data enhancement in 1H17 4G handset penetration Average data usage (VoU) Voice vs Non-voice growth % to total 40.5mn subscribers GB/data sub/month Voice revenue % YoY Non-voice revenue % YoY 39% 22% 21% 20% 20% 18% 35% 4.7 29% 4.0 24% 3.6 19% 3.0 2.6 -12% -14% -14% -16% -18% 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 3
Mobile: Growth driven by postpaid segment Expand postpaid segment: driven by data demand and migration to postpaid Average data usage Churn rate Subscriber contribution Revenue contribution ARPU Operational figure (GB/data user/month) (% per month) (% to total subscribers) (% to revenue) (Bt/sub/month) Contribution 2Q16 2Q17 83% 3.7% 60% 55% 85% 593 3.3% 611 37% 6.7 34% 1.9% 1.6% 4.1 3.4 182 17% 188 2.4 15% Postpaid Prepaid Postpaid Prepaid Postpaid Prepaid Postpaid Prepaid Postpaid Prepaid Postpaid: Build 4G adoption through VDO content Prepaid: Focus on segmentation Postpaid offering is designed to encourage high ARPU Entertainment Teenagers Roamers subscription with more value and differentiation through VDO contents at worry-free data usage Segmented plans and handset offerings Discounted 4G devices from leading brands ZEED SIM Super Play SIM SIM2FLY • 12GB YouTube Target high end with full 4G speed in large bucket • Unlimited music • Popular outbound Monthly • Free JOOX with FUP*, and target mid-tier with buffet plan with • Free 2GB roamer SIM plans • 5GB Super WiFi speed cap • AIS PLAY Bt399 for Asia • 4GB for 8 days Added value and differentiation with video contents *Fair usage policy is applied through speed throttle down once reach data allowance 4
Price plans: Target better ARPU and build differentiation on postpaid • Attract new data users and encourage iEntertain NON-STOP * higher ARPU subscription through premium VDO contents e.g. AIS Premier and HOOQ • Higher level of monthly commitment and data given 4G speed with FUP at 128kbps after reaching the data usage limit *applications 1) with FUP - speed is reduced after reach the data usage limit 2) AIS Premier and HOOQ only applicable with Bt499 packages and above 3) AIS WIFI is included in all packages. 4G/3G Monthly Call within • Offer unlimited data usage at different Enjoy Free Unlimited AIS (mins) Fee (Bt) max speed at speed for diverse needs e.g. chat, social Buffet NET networks, music, HD video streaming 512kbps 100 350 • 1 month Encourage customer to move from 1mbps 100 450 prepaid to postpaid subscription with worry-free plan 1 month 4mbps 200 550 6mbps 200 600 12 months AIS WIFI is included in all packages. MAX SPEED UNLIMITED • Serve high-end heavy data users with real unlimited max speed experience AIS WIFI is included in all packages. 5
Handset discount with monthly plan • Discount on various branded 4G smartphones e.g. iPhone, Samsung, Oppo, Huawei, etc. focusing on mid- and high-end segments • Bundled with monthly plan at committed ARPU from 499Bt/month up to 1,099Bt/month • Require advanced payment credited for monthly charge and subjected to 12 months contract Examples 6
FBB: Expand subscriber and revenue base Fixed-broadband penetration User breakdown by technology Thai fixed-broadband market Broadband users (mn) others FTTX % household peneration 17% Key drivers: 15% 37% • 34% Low fixed-broadband 29% 26% penetration (37% of 21.5m as of households) 1Q16 7.9 7.2 • Majority of existing users 6.2 5.4 connect through xDSL 68% xDSL FY14 FY15 FY16 1H17 Source: NBTC, NSO AIS fibre subscribers (‘000) AIS fibre ARPU (Bt/sub/month) covering Leverage Net add 28 existing fibre 446k Beginning subscribers infrastructure 374k 72 key cities 301k 72 Total 195k 106 4.9% 2.3% 374 116k 79 600 301 541 520 510 498 subscribers 195 44 of service 116 market share 72 revenue as of 1Q17 2Q16 3Q16 4Q16 1Q17 2Q17 2Q16 3Q16 4Q16 1Q17 2Q17 7
FBB: Market share & comparative offerings FBB subscriber market share Net addition market share Total est.7.9mn users Total est. 250k net addition 4% 33% 23% 35% 29% 2Q17 2Q17 6% 38% 32% Monthly Monthly DL/UL Added DL/UL Added DL/UL Monthly Added Tech Tech Tech fee (Bt) fee (Bt) speed service speed service speed fee (Bt) service 30/10 TV FTTx 599 FTTX 30/15 590 Cloud box VDSL 30/10 590 (20GB) FTTX 50/20 650 + Movie Maxx FTTx 50/20 799 Pay extra FTTX 80/20 750 TV Bt50-60 FTTx 100/30 700 FTTx 100/30 1099 +mobile FTTX 100/20 800 for IPTV Cloud box +4G/3G (40GB) FTTx 200/50 1399 FTTx 150/50 900 +WIFI FTTX 150/30 990 + Movie Maxx FTTx 300/70 1999 FTTx 200/100 1,200 FTTX 200/80 1,200 Source: NBTC, company data Data as of Aug-17 8
FBB: Adding value through bundling packages Pure broadband Broadband + contents • Offer competitive pricing with MOBILE Monthly FBB mbps Entertainment segmented packages to serve different Unlimited (DL/UL) broadband + contents + mobile Fee (Bt) speed at needs of customers • Focus on ARPU accretion – Encourage 30/10 NA 599 1mbps customers to subscribe to high-end packages with more value for money and 50/20 799 4mbps attractive campaigns 12 months 3 months • Leverage synergy of the three core 100/40 1,799 businesses (FMC) to acquire new subscribers while create stickiness and 6mbps 12 months 200/50 1,999 differentiation. 12 months 9
Digital service: Create differentiation with exclusivity and variety Continue building variety and exclusive contents Encourage adoption of online channel International partners • All-in-one AIS online Up to 3 months free-trial for Premier package to build awareness application • Check real-time usage • Buy on-top packs • Check and receive privilege • >1.3mn active users • A comprehensive mobile Local partners payment gateway • Partnered with local banks Partner with Workpoint to create special exclusive episodes of “ The to expand user base Mask Singer ,” the currently most • >500k active users popular variety show, only available on AIS PLAY & AIS PLAYBOX 10
2Q17 Overview EBITDA (YoY) EBITDA (QoQ) (Bt mn) NPAT 2Q17 789 162 1,257 60 17,347 17,108 127 1,984 7,332 1,958 569 17,108 228 271 1,443 17,012 1,324 7,215 205 Finance D&A Tax Others NPAT 1Q17 Service Service Reg fee SG&A Others 2Q17 2Q16 Service Service Reg fee SG&A Others 2Q17 cost rev ex.IC cost ex.IC 2Q17 rev ex.IC cost ex.IC • Revenue growth is driven by demand for mobile data Service +6.6% YoY and expanded customer base of FTTx Bt32bn revenue +5.2% QoQ excluding, IC • EBITDA is well maintain amidst challenging competition +4.6% YoY Mobile Bt31bn +1.9% QoQ • Net profit reflected continued 4G network expansion +404% YoY and acquisition of spectrum license FBB Bt738n +34% QoQ 1.3X 70% of Bt17bn BBB+ +0.6% YoY EBITDA 43.8% margin -1.4% QoQ net profit Net debt to Investment grade (S&P) dividend paid EBITDA -25% YoY Net profit Bt7.2bn -6.2% QoQ 11
FY17 Guidance 2017 Guidance 1H17 actual Service revenue • Improved network quality and increased 5.3% YoY +4-5% YoY (excludes interconnection smartphone adoption revenue) • Improved revenue and cost 44.2% EBITDA margin 42-44% management offset by full-year payments for TOT partnership • Strengthen 4G capacity with 2CA and 3CA expansion Bt23bn CAPEX Bt40-45bn • Selective expansion for fixed-broadband business Bt3.51/share • • Preserve financial health and flexibility 70% of NPAT Minimum 70% Dividend policy • approx.4% payout of NPAT for future growth dividend yield 12 12
APPENDIX 13
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