Investor Presentation Advanced Info Service Plc. May 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.8.4mn) 27% 48% 33% 1Q18 21% 1Q18 25% 7% Mobile Video 39% money 1Q18 breakdown prepaid postpaid Bt31bn Enterprise IoT Business 4 th year of operation in 2018 19% 43% Mobile 60% data covering 50 key cities out of 81% 57% 77 provinces 40% Voice expect to cover 6mn homepass* Mobile revenue subs % to mobile 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 • 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 i.e. port, last miles to be able to get connected. 2
AIS’ digital transformation toward 2020 Next Generation Next Generation Next Generation Next Generation N etwork E conomy X perience T eam Contents and Network Function Full Service Customer Value Organization Enterprise Virtualization & Digitization Management Transformation Segments Cloudification • > 90% Target 2020 • Expand revenue • Move to ARPH • Data-driven • Provide shops & cloudification • Improve revenue contribution of 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 • Digitize all • Organization New opportunities: Data-driven Strategy toward 2020 • IoT networks analysis based on customer readiness for • SME & R-SME customer insights: journeys digital disruption • IT legacy • Managed • AI/Chatbots • Leverage transformed to Security Bundle mobile, • Mobile Digital Cloud-friendly 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 3
1Q18 Quarterly Summary Service revenue improved in all segments Strategic executions (Bt mn) ▲ 6.5% YoY Expand into enterprise market Service 34,565 ▲ 2.5% QoQ revenue • Paid Bt3.4bn for 81.47% of CSL’s shares ▲ 3.1% YoY • Mobile Fully consolidated since Feb-18 31,172 ▲ 0.5% QoQ • Incurred goodwill of Bt2.8bn ▲ 85% YoY • Final tender offer until 6-Jul at Bt7.80/share FBB 1,013 ▲ 6% QoQ • 7.6GB/sub of mobile data consumption ▲ 63% YoY Others 962 • 51k of FBB net addition Widen e-service/mobile payment to ▲ 51% QoQ • CSL revenue Thai users IC & ▲ 31% YoY IC & 1,418 consolidation Equipment ▲ 28% QoQ equipment rental • Paid Bt788mn to buy 1/3 JV stake with rental Rabbit and LINE • Utilize each party’s strength in subscriber base, distribution channel, and brand Cost controlled resulted in profit expansion EBITDA (Bt mn) NPAT (Bt mn) Officially signed 2100MHz contract ▲ 9% YoY ▲ 4.5% YoY • Agreements effective since 1-Mar ▲ 2.4% QoQ • Improved service ▲ 4.4% QoQ • 20,000 Equipment rental agreement 10,000 revenue 8,000 15,000 • Roaming agreement • Lower regulatory 6,000 10,000 • Net financial impact remains relatively the 4,000 fee, network OPEX, 5,000 18,905 8,037 2,000 same at a net cost of Bt3.9bn/year and controlled - - 1Q18 handset subsidies 1Q18 4
FY18 Guidance (maintained) 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 • More targeted marketing campaigns Sale revenue near-zero margin • Improving revenue and continuing cost management EBITDA margin 45-47% • 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 5 5
Mobile: Drive 4G users through valued offerings 4G adoption continued uptrend Business direction in 2018 Key driver • Increasing 4G penetration and 4G handset penetration 3G handset penetration data usage Mobile data revenue (% to mobile revenue) • Continue to improve network and 56% 53% 60% 50% 49% 46% brand perception Strategy 50% 42% 39% 35% 46% 40% • Target uplifted offerings through 43% 30% customer value management 20% program 60% 59% 58% 55% 53% 10% • Convergence of mobile, FBB, and 0% video content targeting revenue per 1Q17 2Q17 3Q17 4Q17 1Q18 household and brand value Focus on postpaid and maintain competitiveness in prepaid • Postpaid segment grew Postpaid statistics in 1Q18 Prepaid statistics in 1Q18 robustly following popularity of video -5% streaming on mobile YoY flat -5% +14% 3.6% YoY +61% +14% • Prepaid segment +2% +100% YoY YoY YoY YoY YoY 1.4% softened due to 32 7.6 17 13 7 9.2 184 578 prepaid-to-postpaid conversion and Subscriber Revenue VOU ARPU Churn rate (Bt bn) (GB/month) (mn) (Bt/month) competition (/month) 6
Mobile: Build end-to-end customer satisfaction Reinforce OMNI channel and privilege End-to-end customer engagement Increase brand perception in both online & teen segment Strong branding Partner with CH3 Zeed SIM for to co-market teenagers “Love Destiny” Focus on valued-product proposition Product differentiation Increase Maintain level Targeted FMC revenue per of profitable offerings household subsidies Great network Ensure proper investment and strong spectrum position quality Low- and Advanced solutions 55 high-band MHz with pre-5G network spectrum planning 7
FBB: Industry expanding into fibre-to-the-home Thai fixed broadband market FBB subscriber market share Industry ARPU 39% market penetration with majority using xDSL Total est. 8.4mn users Maintained at around Bt600/month Broadband users (mn) ARPU (Bt/month) 33% % household peneration 637 21% 635 39% 38% 34% 1Q18 29% 26% 600 7% 541 39% 510 8.4 8.2 7.2 6.2 5.4 4Q16 1Q17 2Q17 3Q17 4Q17 FY14 FY15 FY16 FY17 1Q18 Competitive fibre pricing with higher speed at same price ARPU (Bt/month) 1000 Current fibre plans 800 100Mbps packages are recently affordable at below Bt1,000 600 Typical package for new fixed broadband 400 customers remained at Bt600, targeting new and ADSL users 200 0 20 40 60 80 100 120 Download speed (Mbps) 8
AIS Fibre continues to focus on quality customers with improved acquisition rate AIS Fibre performance FBB subscriber (‘000) FBB net additions (‘000) Focus on existing ARPU (Baht/month) 50 cities, covering 6mn homepass 637 635 618 600 1,200 650 541 1,000 100 572 72 72 521 550 800 482 446 374 51 600 40 36 50 450 400 200 Synergy with CSL in 350 - - condo segment 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 • Acquire quality subscribers through convergence services of “Power4” and “ Family Extra ” packages Join AIS Fibre + up to 4 AIS mobile numbers, get extra privileges for a family Free 2GB Free call to 1 AIS number Mobile data Pure fixed Convergence broadband 14% Get privileges for 86% Serenade Emerald HBO movies & series on mobile and extra meals & movies + World class cartoons at home AIS Fibre customers by segment privileges 9
Digital services: add on variety of contents & expand further into digital money segment Digital contents AIS Rabbit LINE-Pay Digital contents 2 new channels including CNN and Cartoon Network, On 5 th March 2018 ,AIS, through mPAY, has • available on AIS PLAY and PLAYBOX entered into 33.33% stake (Bt788mn) in a joint venture with Rabbit LINE Pay , an e-Money platform that connect with Bangkok Mass Transits and is embedded in Line chat application. • Strengthen AIS’ digital life service provider at home on the go position by leveraging customer bases, platform, channels of AIS and partners to available on both AIS PLAY and AIS PLAYBOX enhance mobile money for both AIS and non- AIS customers Continued to add value and create differentiation through digital contents On top packages: Mao Mao Entertain Free internet in ViU, Hook, Karaoke apps Bt19/day Korean series 512Kbps* + or Hollywood movies Bt34/day for UL 4Mbps +8.5mn users +2.6mn users +45mn users Karaoke *FUP: speed drop to 64kbps after 300MB 10
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