AISs Strategic Directions Somchai hai Lertsu tsutiw tiwong ong - - PowerPoint PPT Presentation
AISs Strategic Directions Somchai hai Lertsu tsutiw tiwong ong CEO 1 Our challenges ahead Mobile industry stagnating Heavily relying on mobile revenue and profit High cost of spectrums Digital technologies enable new market and
AIS’s Strategic Directions Somchai hai Lertsu tsutiw tiwong
CEO
1
Our challenges ahead
Mobile industry stagnating Heavily relying on mobile revenue and profit Digital technologies enable new market and players High cost of spectrums
2 Mobile Network Fibre Broadband Digital Service Enablers
3G / 4G / Super WifF / NEXT G / .. 5G FTTH, FTTB, Nationwide FIBRE core, International Network Video, E-money, Cloud, IoT, and etc
Logistic & Transportation Education
Partner Connect Data Analytics
Our customers Other Thais
Healthcare
AIS: Digital Platform for Thais
1-3 years
Overall Strategy
4
Mobile: Maintain leadership and stay competitive to retain scale
Branding
for digital population Offering Customer Management
Mobile FBB Digital Service
privileges
models
49.6% 48.3%
47.5%
26.6% 25.2% 24.2% 23.8% 26.4% 28.0%
2016 2017 9M18
subscriber and revenue
prepaid via segmentation and postpaid via CVM Revenue Market Share Trend Network Investment
use of spectrum and future-proof investment
5
FBB: Focus on FMC to grow FBB
revenue per household)
Mobile FBB Digital Service
FMC
Fixed Mobile Convergence
CVM
Customer Value Management
FBB
Mobile
Investment
Bt4-5bn in 2019 Allocated CAPEX to 70% last miles Drive by our capabilities to capture demand
Growth strategies
request to connect
growth over mid to long term
base and total customer value
base
and targeted area
quality subscribers
6
Enterprise
: Integrated services of Telecom-ICT-Digital
Insurance Game Advertisement
Consumer
: Leverage and enhance customer base via partner platform
Digital Service: New strategic offerings
Mobile FBB Digital Service
41M customers Other related services Telco services ICT services Digital services
DC/ICT Solutions Mobile Data network Cloud IoT
Products Capabilities AWN+CSL Partners + Others Mobile wallet Video Drive quick learning curve
+
Cyber security 7
Fair spectrum cost Available ecosystem Commercially viable use cases Equipment price AIS: View on 5G
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5G G Update te and nd Ou Outlo look
Krie iengsa ngsak k Wani nichna hnatee tee Chi hief ef Technol hnology
Officer icer
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Agenda
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Enhanced Mobile Broadband
(20 Gbps)
Massive IOT
(1M device per sqr.km.)
Ultra High Reliable & Low Latency
(1 msec)
5G
in a Nutshell
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5G Standardization – Timeline, key date and players
2015 2016 2017 2018 2019 2020 ITU 3GPP
Vision Requirements Workshop Proposals Release 15 Release 16
WRC-15 WRC-19 Commercial Specification
Define 5G architectures Define eMBB spec. Focus more on uRLLC and eMTC
World Radio communication Conferences (WRC) 2015 and 2019
2019
Deployments 2020
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Global pre-commercial/commercial 5G launch plan
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By mid Jan 2019,
201 operators in 83 countries investing in 5G,
including tests, trials, plan, pilot deployment and commercial launch.
5G deployment worldwide
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Samsung 5G prototype phone in CES 2019
5G Devices
AT&T announces 3 mobile 5G devices
Netgear 5G WiFi hotspot Samsung 5G on mmWave & sub-6 GHz (2H 2019)
Verizon 5G upgradable phone and FWA devices
Moto Z3 5G upgradable phone Verizon 5G Home CPE since 1 Oct 2018
Sprint & LG 5G phone by 1H2019 Xiaomi Mi Mix 3 5G phone by mid
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Expectation
2-5 years 5 -10 years More than 10 years
Innovation Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment
5G will take 2-5 years to
reach mainstream adoption
Ecosystem is required
via collaborations of the thinker, the builder, the provider, the users.
Plateau will be reached Less than 2 years
Plateau of Productivity
Gartner: as of August 2018
Technology Trend Expectation
16
5G use case 1: WTTx
WTTx = Wireless To The Everything WTTx is a new 5G-based broadband access solution, which uses wireless to provide fiber-like broadband access for household. WTTx benefits:
performance
access
Deployed on high-band (28GHz) by some operators in late 2018 e.g. Verizon and Telefonica
17
5G use case 2: Automation factory
5G technology provides low latency and high reliability connectivity for manufacturing. These are requirements that manufacturers currently rely on fixed-line networks. The mobile 5G technology will allow for higher flexibility, lower cost and shorter lead times for factory floor production reconfiguration and layout changes. Automation factory benefits: 1. Reduce system setup time 2. Increase productivity 3. Minimize machine downtime in case of any changes
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Autonomous driving means the self-driving of a vehicle to a specific target in real traffic without the intervention of a human driver. Autonomous driving benefits: 1. Reduce accidents 2. Reduce traffic congestion/Lower fuel consumption 3. Reduce CO2 emission 4. More efficient parking
5G use case 3: Autonomous driving
Mainstream adoption More than 10 years
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Agenda
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Existing 4G Topology 5G NSA Topology (NSA: Non-StandAlone)
HSS MME
Internet
IMS
SGW / PGW
GWC GWU
eNB Antenna
4G
RRU CPRI BBU IPRAN ACCESS (10G) IPRAN AGGREGATE
Radio Transport Network 4G Core EPC
HSS MME
Internet
IMS
SGW / PGW
GWC GWU
Radio Transport Network 4G Core EPC
gNB
5G
AAU eCPRI CU/DU
IPRAN ACCESS(10G)
WDM Access IPRAN ACCESS(100G) Split Chain
IPRAN ACCESS(10G)
Existing Upgrade New IPRAN AGGREGATE
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Network infrastructure preparation for 5G
and CUPS network solutions
AIS core network is upgradable to support 5G
enhancement to support higher bandwidth
5G new base stations can be interworking with existing network
28GHz
New Frequency spectrum is required to support 5G
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Agenda
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Scatter and Dense Network Deployment
Source: Deloitte analysis
scattered 5G coverage
densification
Sites per 10 square miles Sites per 10,000 people Sites per 10 square miles Sites per 10,000 people
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Cost and Cell Capacity: TDD NR vs FDD LTE 2T2R
2600MHz Bandwidth 1800MHz Configuration Commercial price per site (USD) Cell Capacity (Based on simulation) 20MHz, S111, 2T2R 3 Sectors 60MHz, S111, 64T64R, 3 Sectors 1X 6~7X 1X 20~23X
Remarks: Above cost and cell capacity only calculated from a typical configuration of 5G TDD NR for high level comparison with LTE. The actual cost and cell capacity could be varied depending on different site configurations.
How 5G achieves cell capacity gain over LTE
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Dig igit ital al Pla latf tform
tegy gy Pr Pratthana tthana Le Leela elapana anang ng Chi hief ef Con
sumer mer Bus usiness iness Of Offic icer er
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2016 2017 2018 Prepaid Postpaid 34.6M 8.2M 7.4M 6.4M 33.0M 32.7M 11.6GB 7.3GB 3.8GB per sub per month
FTTH
2016 2017 2018 300k 731k 521k 100Mbps Avg Speed 20Mbps 30Mbps
FTTB
1M 2M 4M
2016 2017 2018
2.0M 2.6M 5.1M
2016 2017 2018
28
29
30
31
32
+ + +
50-200 Mbps 5-20 Gbyte/mth
33
34
35
36
1M 2M 4M
2016 2017 2018
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ANY MOBILE ANY PC ANY TV ANY BOX
Your Entertainment Gateway Enjoy every moment, anywhere anytime
Freemium for every one Gateway to the world premium
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Gateway to the world premium ANY MOBILE ANY PC ANY TV ANY BOX
Your Entertainment Gateway Enjoy every moment, anywhere anytime
Freemium for every one
The 1st Windows TVOD
PLAY 365 365
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Gateway to the world premium ANY MOBILE ANY PC ANY TV ANY BOX
Your Entertainment Gateway Enjoy every moment, anywhere anytime
Freemium for every one
The 1st Windows TVOD
PLAY 365 365
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As of Dec 2018
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As of Dec 2018
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As of Dec 2018
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As of Dec 2018
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Re Real al-Time Time Di Digital tal Ra Rati ting ng and d Future ture Mo Monet netization ization with th Partners tners
CH7 HD PPTV HD 3HD MONO29 ONE 31 WORKPOINT THAIRATH GMM25
Sun Mon Tue Wed Thu Fri Sat
47
48
2.0M 2.6M 5.1M 2016 2017 2018
49
50
>1.5M transaction/mth
Dec-18 Sep-18 Oct-18 Nov-18
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3M cards
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> 4 > 45,000 ,000 > 5 > 5,000 000
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AIS S Ent nter erpris rise e Bus usiness iness Yongsi gsit t Rojs jsrik rikul ul Chi hief ef Ent nter erpris rise e Bus usiness iness Of Officer icer
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DI DIGIT GITAL AL
FORTHAIs
AIs
The Next Generation Thailand
Integrated proposition combining Telecom-ICT-Digital Services
Backbone Infrastructure Customer Base Digital Platforms Logistics, Smart City, Healthcare, Advertising, Manufacturing Mobile Fixed Broadband 40mn mobile & 730k FBB Enterprise Customers End-to-End Solutions
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Nationwide Fiber Coverage & Regional Data Centers No.1 Consumer Mobile User & Network (B2C) Best Smart Solutions & IoT Ecosystems Strong and Experienced Team in Managed ICT Large Data Centers in Bangkok Premium Brand for Corporate ICT Service Quality (B2B)
CSL brings ICT and B2B capabilities
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Fixed/UC Mobile Data Network DC & Cloud Smart Solutions IoT/ M2M Managed Services Data & Digital Marketing
Position as comprehensive product portfolio
Bt14bn or 10% of core
service revenue in FY18
Mobile as entry or door opener for upselling & cross selling
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39 12.1 8.9 1.3 22 0.6
10% 30% 50% 70% 90%
Aim to gain share in core services while capturing growth in new services
Growth
Industry value (Bt bn) AIS’s revenue size (Bt bn) DC/ICT Solutions Mobile Data Network Cloud IoT Digital marketing
Telecom Services (matured) ICT Services (growing) Digital Services (emerging)
15% share 2.7% share
Core New
31% share
12 39
58
Telecom services: Leverage scale in Mobile & Data Network to enlarge market share
AIS+CSL 10% share Domestic Data 36% Corporate Internet 33% SME Internet 23% International Data 8%
network capacity & security
Market Environment
Data Network
Single-digit growth market
Bt30bn
Market Size
Strategies
Client Client branch Client branch
Managed Network Global Destination via CLS Thai IX 59
ICT services: Leverage multi-location DC and end-to-end managed cloud & ICT services
Market growth potential
4.3 5.5 7.1 9.1 11.9 4.6 5.9 7.5 9.5 12.1 8.9 11.4 14.5 18.7 24.0 2018 2019 2020 2021 2022
Source: Frost and Sullivan
Bt bn AIS + CSL 10% share Growing faster than industry Cloud DC & ICT
CSL’s carrier neutrality
serve full-stacked Cloud Services (IaaS, PaaS, SaaS, Hybrid Cloud)
Strategies
Market Environment
Intranet Wifi ICT Services Server Security Services Firewall Anti-Virus Content Filtering Cloud Services DC SAAS IAAS PAAS 60
Digital services: Expand value chain in selected verticals for Smart
Solutions / IoT and leverage AIS mobile base for Digital Marketing
16.4 18.2 19.2 5.4 8.0 11.6
21.8 26.1 30.8
2018 2019 2020 Digital Marketing Addressable IoT Bt bn
Source: Frost and Sullivan
1. Data 2. Digital Marketin g 3. Revenue Model 4. Media & Platforms
Rating
businesses with various techniques
Social media
Analytics, both Telco & Online IoT Platform Digital Marketing Monetization
Market growth potential
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5G Applications for Enterprise Business
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5G 5G in Busine iness Ev Evolution tion
Energy & Utilities Automotive IoT Industrial
5G 4G
Gigabit LTE (TDD, FDD, LAA) Massive MIMO IoT : NB-IoT / eMTC Cloudification AR / VR Virtualized RAN Distributed Cloud Real-time Machine Learning Artificial Intelligent Robotics MR Healthcare Mobil bility & Coll llabor boratio ion
Technology
information
vehicle
connected vehicle
mation
vision
Intelligence and real-time control
doctor and patients
metering and smart grid
Intelligence and real-time control
everywhere
experience
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Fin inanc ncia ial l Ou Outlo look
and nd Capital pital Ma Mana nagem ement ent Tee e Seeum eumpornr pornroj
CFO FO
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2018 Wrap-up and 2019 Financial Outlook
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2019 Revenue outlook
Revenue: strengthen and leverage core business
Core service revenue growth +3.8% Mid-single digit
2018 2019E
Driver:
preserve prepaid scale
subscribers for FMC
with integrated proposition
4%
1Q17 3Q18 YoY growth Source: Broker report
YoY mobile revenue & ARPU growth
4G consumption growth faces a challenge to monetize globally
1% 6%
1Q17 3Q18 YoY growth
Developed markets
4%
1Q17 3Q18 YoY growth
Emerging markets
2% 7%
1Q17 3Q18 YoY growth
Thai telcos
Service revenue growth ARPU growth
markets led to negative or low growth
segmentation and relevant bundled
to differentiate Mobile + FBB + Enterprise
66
2019 Cost Outlook
Cost: optimize for long term and effectively spend for short term
% Expense to total revenue
15.9% 19.6% 15.6% 2018 2019E OPEX D&A SG&A In line with revenue growth Stay competitive
Driver:
Industry continued to spend more than 2x of AIS’s
49.5% 48.1%
47.5% 50 39 30 17 11 7.4
10 30 50 70 90
10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0%2016 2017 9M18 AIS's revenue market share
AIS's marketing spending (Bt bn)
deploy handset subsidy campaign to acquire market share.
marketing focused on retention of high-value customers, CVM, segmentation, and brand perception
+1.6% +5% +12% %YoY
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2019 Profitability Outlook
CAPEX: remains controlled with more focus on return
36 23 20-25
2017 2018 2019E
44.7% 43.4% Stable
2017 2018 2019E
coverage and capacity expansion to balance investment and return
capability for 5G especially in NFV, MIMO, IoT
implementation, and maintenance processes Budget CAPEX
(Bt bn)
EBITDA margin* Rationale:
Profitability: stay competitive to protect scale
scale while ensuring quality revenue generation for appropriate return.
be pressured from D&A of network and license investment.
*EBITDA over total revenue
Rationale:
68
Cost Transformation Program
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Cost optimization is essential
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FY12 FY13 FY14 FY15 FY16 FY17 9M18
Common size
NPAT margin Others Regulatory fee Network D&A Spectrum amortization OPEX SG&A
NW expansion and partnership with SOEs AIS’s concession end 4G CAPEX cycle
Short to medium term What happened
with high spectrum costs continues to pressure ROCE.
share elevates marketing spending support. What we did
and be ready for capturing new business
Longer term
Industry P&L Common Size and Cost Structure Development
3G CAPEX cycle Handset subsidies
70
Positive impact realized and to continue
OPEX: Hundreds of initiatives from negotiation to digitization CAPEX
Digitization & Automation Revised Cost Model Process Improvement
2017 – 2019E: Bt4.5bn To further challenge beyond 2019
Realized saving/benefit from OPEX & CAPEX optimization
(compared to 2017 baseline)
Job Streamline
IVR for Call center
channels to optimize commission
E-Bill
collection
subsidies
VAS commission
and access networks
Solution Redesign Infra Sharing Payment Term
frame contract tenders
investment sharing
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Long-term Capital Policy
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Long-term profitability & capital management
Leverage Margin Dividend
mid- to high-single digit
to improve ROCE
financial flexibility for future growth Financial Discipline & Objectives Key Factors
connectivity
term
73
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
cannot guarantee the relevance, timeliness, or accuracy of these statements.
Source of photos: Flaticon.com; Google.com