Investor Presentation Advanced Info Service Plc. February 2018 Ticker: ADVANC (SET) AVIFY (ADR) Add AIS IR LINE@
AIS: Digital Life Service Provider Lead and digitally transform in Grow stronger in Partner to offer differentiated “ Mobile ” “ Fixed broadband ” “ Digital service ” Mobile revenue market share Focused on FOUR key areas Subscriber market share (approx.7.7mn) 27% 48% 35% 4Q17 19% 3Q17 25% 6% Mobile Video 40% money FY17 breakdown prepaid postpaid Enterprise Bt129bn IoT 2.4% FBB Business 4 th year of operation in 2018 18% Non- 38% 59% voice covering 50 key cities out of 82% 55% 77 provinces 33% Voice expect to cover 6mn homepass* service revenue subs % to service 40.1mn out of total 21.5m households revenue Digital life service provider with convergence products Mark leadership in mobile data Aim to be a significant player in Pursue long-term growth with • Nationwide 4G/3G/2G coverage 2020 integrated services with focus on network quality • Leverage existing nationwide fibre • Emphasize partnership & • Focus on scale to maintain cost infrastructure ecosystem advantage • Defensive value to core mobile • Leverage the large sub base and business telecom infrastructure *Homepass is defined as a number of households within AIS fibre service area. This includes the homes that require additional investment i.e. port, last miles to be able to get connected. 2
FY17 Recap: Fundamentals set Integrated position drove revenue growth Focused on quality amid high competition FBB Mobile 800 1,200 635 +3.1% YoY 510 1,000 +4.9% YoY FBB ARPU Bt3.8bn 600 Prepaid Postpaid 82% 800 (Bt/mth) 18% 521 k or -1.9mn +961k +264% YoY 400 (40.1mn) 600 Mobile 302 k Bt 6 bn Bt2.3bn 400 200 200 Subs - - • Rising 4G users 4Q16 4Q17 ARPU • 37% of revenue incremental +5% • Postpaid-driven • Attracted quality demand came from FBB growth YoY for fibre to home Continued cost optimization Cash profit highly improved Operational cost of service 1) SG&A EBITDA (Bt bn) NPAT (Bt bn) +16% -16% YoY +4.2% YoY 70.5 60.7 YoY 80.0 -1.9% 60.0 30.7 30.1 YoY 40.0 • Focused on network • Managed subsidies 20.0 - OPEX efficiency and to focus on quality 2016 2017 2016 2017 digitized process revenue • Balanced revenue growth and return • -16% YoY if excluding payments to TOT 1) Cost of service excluding IC and D&A 3
FY18 Guidance Item FY18 Guidance • 2% of which comes from CSL • Increasing data usage on 4G and fixed broadband Service revenue +7-8% YoY subscriber base (ex. IC) • Moderate growth in enterprise business with synergy from CSL Decline and make Sale revenue • More targeted marketing campaigns near-zero margin 45-47% • Improving revenue and continuing cost management EBITDA margin • Strengthen 4G capacity to support mobile data growth Cash CAPEX Bt35-38bn using advanced technology • Expand fixed-broadband coverage and last miles Minimum 70% payout of • Preserve financial health and flexibility for future growth Dividend policy NPAT 4
AIS’ digital transformation toward 2020 Next Generation Next Generation Next Generation Next Generation N etwork E conomy X perience T eam Network Function Contents and Customer Value Full Service Organization Enterprise Virtualization & Digitization Management Transformation Cloudification Segments • > 90% Target 2020 • Expand revenue • Move to ARPH • Data-driven • Provide shops & cloudification contribution of • Improve revenue organization & services that • Network enterprise business assurance and culture never sleep virtualization ready from 9% to 25% add valued users for 5G • 5G future-proof New opportunities: Data-driven • Digitize all • Organization Strategy toward 2020 networks • IoT analysis based on customer readiness for • SME & R-SME customer insights: journeys digital disruption • IT legacy • Managed transformed to Security Bundle mobile, • AI/Chatbots • Leverage Cloud-friendly • Mobile Digital fibre & content via embedded into capabilities and network Marketing FMC all self-service create synergies architecture channels in value chain Maximize value of supporting digital contents in • AI for network • Deployment of business customer retention operation OMNI channels objectives and branding 5
Mobile: Drive 4G users through valued offerings Growing 4G penetration & streaming Business direction in 2018 Breakdown by technology Key driver • Increasing 4G penetration and 8% data usage 11% 4G 29% 46% 3G 46% 60% • Continue to improve network and 2G brand perception Strategy 4Q16 4Q17 • Target uplifted offerings through customer value management VoU Smartphone program (GB/data sub/month) penetration • Convergence of mobile, FBB, and 6.7 70% 73% 3.6 video content targeting revenue per household and brand value 4Q16 4Q17 4Q16 4Q17 Postpaid segment was the key contribution to 3.1% mobile revenue growth in FY17 Subscribers (mn) Revenue (Bt bn) • Strong growth in postpaid segments in FY16 FY17 FY16 FY17 both net addition and -5% YoY revenues 35 33 -4% YoY • In 4Q17, postpaid +15% YoY +16% YoY revenue grew double digits and 7.4 6.4 contributed >40% of mobile revenues. Postpaid Prepaid Postpaid Prepaid 6
Mobile: Target quality revenue Product focused on creating customer value Integrated and best value Fixed-mobile-content convergence Targeted retention program 78% • New prepaid SIM • Adopt Big Data to • Increasing of AIS Fibre focusing on analyze customer usage value per subs also use simplification and and behavior household AIS Mobile sale efficiency • Proactively offer relevant products/services to increase stickiness • Competitive bundling packages for postpaid Leading network quality and enhance brand perception 4G download CAPEX (Bt bn) speedtest (Mbps) 48 60.0 41 25.0 35-38 20.3 40.0 20.0 + 20.0 15.0 10.0 - Jun-17 Sep-17 Dec-17 2016 2017 2018E 5.0 - • Position as leading • Improving data network brand in mobile data quality with optimum investment 7
Mobile: Digital strategy to enhance sale and service Digitized Customer Journey Digital Content Deciding Discovering Increase visibility Bring in local content and Website and mainstream international content online store >5mn active Package design to attract segmented visitors Visible to >38mn subscriptions accounts 270k 60k paid & CVM subscribers in mid-17 in end-17 Experiencing & >2mn active users upgrading Digital Sale & Service %Sales from 7% 5% online in 2016 in 2017 channel KIOSK KIOSK 79% 76% Artificial Intelligent HYBRID intelligence 71% 29% assistant 87% 13% Counter Counter • Enhance customer journey and service efficiency 2016 2017 2017 2017 • Upsell via personalized offerings and time freed-up %Service %Payment %Calls handled of staff transaction transaction by IVR 8
FBB: Industry expanding into fibre-to-the-home Thai fixed broadband market FBB subscriber market share Industry ARPU 37% market penetration with majority using xDSL Total est. 7.7mn users AIS Fibre saw continuous ARPU improvement vs peers in FY17 Broadband users (mn) % household peneration 35% 637 19% 37% 34% 29% 3Q17 26% 600 541 6% 510 7.7 7.2 498 40% ARPU (Bt/month) 6.2 5.4 3Q16 4Q16 1Q17 2Q17 3Q17 FY14 FY15 FY16 9M17 AIS Fibre’s momentum improving FBB subscriber (‘000) ARPU (Baht/month) covering 800 Leverage 1,200 637 635 600 541 50 1,000 510 600 existing fibre 800 521 482 infrastructure 446 400 key cities 600 374 302 400 200 200 - - Contributing Net addition Net addition (‘000) 150 momentum improved 106 2.9% 100 72 72 of service revenue with quality screened 40 36 50 - 4Q16 1Q17 2Q17 3Q17 4Q17 9
FBB: Scale up to support convergence strategy FBB subscribers (‘000) 800 2018: target 800K FBB subscribers 521 • Scale up and improve EBIT level • Enhance revenue growth and brand value through convergence FY18E FY17 Sales, Technical & Coverage expansion Subscriber acquisition Customers supports Focus in existing 50 cities, covering 6mn homepass Synergy with CSL on sale & Convergence packages technical support targeting family ↑ Service Efficiency Bt6bn CAPEX • Guarantee 48hrs installation Enhance channel effectiveness • Enhance call center to be able to mostly for last miles take level-2 call support through Network Operation Center (NOC) Digital for Thai Be one of the major players in fixed broadband market in 2020 10
FBB: Adding value through bundling packages • Offer competitive pricing with segmented packages to serve different needs of customers • Focus on ARPU accretion – Encourage customers to subscribe to high-end packages with Pure broadband more value for money and attractive campaigns • Leverage synergy of the three core businesses (FMC) to acquire new subscribers while create stickiness and differentiation. More than 100+ free channels and current 40 exclusive channels both Broadband + contents linear and on-demand AIS PLAYBOX Bt399/month Bt299/month Bt599/month Bt199/month broadband + contents + mobile FBB MOBILE Monthly Entertainment mbps Unlimited Fee (Bt) (DL/UL) speed at 599 30/10 NA 1Mbps 799 50/20 4Mbps 12 months 1,099 100/30 3 months 1,799 100/40 6Mbps 1,999 200/50 12 months 6 months 11 *AIS WIFI is included in all packages.
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