Ha Half lf Yea ear r Ana naly lyst st Mee eetin ting g 20 2019 19 Som omchai hai Le Lertsut tsutiw iwong ong CEO 1
Industry re-balanced and moving toward rationalization Historical 900MHz Auction 4G Demand Skyrocket Monetization • Launch of Fixed-Speed U/L • New license cost structure and 5G • Additional auctions of • Risk of 2G shutdown Preparation 900/1800MHz • Heavy handset subsidy • AIS completed nationwide 4G 1800MHz Auction Delay • AIS was late in launching 4G 2019 2017 2015 2018 Market Rationalizing Market 2016 • Fully on license scheme Position Shift • 700MHz allocation at fair price 2014 900MHz Concession End • #3 became #2 • Unwinding U/L plans & 1800MHz auction • Postpaid subsidy Bandwidth (MHz) 384 344 320 275 270 143 Subsidy and CAPEX trending 106 104 92 Subsidy 314 120 79 250 344 200 down with spectrums now fully on 50 39 37 (Bt bn) 31 25 155 license & partnership basis 70 70 70 CAPEX (Bt bn) Concession License & Partnership 2
Solid 1H19 performance with guidance maintained 1H19 FY19 • Maintain leadership in network quality performance Guidance • Continue strengthening brand perception • Competitive in both mass market and targeted segments +4.1% Mid-single • Fixed-Mobile Convergence (FMC) YoY digit growth • 1mn subs target Core service revenue • Gain share in EDS • Drive double-digit growth in Cloud/DC/ICT • Business Explore IoT in key verticals 43.7% EBITDA margin • Ensure operational efficiency and spending effectiveness Stable from • Incorporate 5G capability in network plan last year Normalized EBITDA margin 3
5G: More spreading investment outlook 5G investment CAPEX and technology cycle #MHz Bt bn GSMA’ s Global Mobile CAPEX (excl. spectrum) 4G Coverage as % of mobile revenue 100 3G Capacity 4G Capacity 60 2.6GHz 90 3.5GHz 18% 18% 80 3G 17% 17% 26-28GHz 50 Coverage 70 14% 40 60 50 30 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 40 20 30 Dependent on use 20 cases and expect to 10 Whether 2G, 3G or 4G, the industry has spread out 10 kept investing 16 – 18% of its revenue in 0 0 mobile networks – a trend expected to 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 continue in the 5G era . • Ensure spectrum leadership and efficient investment 4
Growing with core strength and partnership Enterprise Medium to long term FBB Mobile Digital Enterprise Mobile FBB 2019 Revenue Mix Strengthen the Core Expand New Growth Engine Build new digital businesses Optimize and digitize to ensure Generate new revenue and profit stream from Build new digital capabilities and platforms to best serve future customer’s leadership and strong cash flow Fixed Broadband and Enterprise while serving to generation strengthen and leverage core mobile business lifestyle and customer engagement 5
Focus to grow sustainably with Thais 1 2 3 6
“If We All Are Network” 7
Pr President esident Hui i Weng ng Cheong ng 8
Mobile: Improving sign of monetization among usage subscribers Prepaid Postpaid Stopped offering fixed-speed Stopped offering fixed-speed >35% 1Q19 4Q18 ~ 30% unlimited to certain segments ~ 30% unlimited to new subs ~ 25% Fully stopped offering fixed-speed Launched “quota - capped” 1Q19 1Q19 UL to all new subs for new & existing subs Jun-19 Jun-19 Nov-18 Nov-18 Increased price on existing Gradually increased price of 2Q19 % Subscriber on fixed-speed 2Q19 % Subscriber on fixed-speed subs promotion-end subs and moved unlimited plan unlimited plan to quota-capped plans ARPU trend of new subscribers ARPU trend of new subscribers +0.8% /month +0.4% /month 600 • New subscribers 400 +0.6%/ month +1.4% /month • Resulted in improving Bt/month Bt/month came in with ARPU of new improving ARPU, subscribers gearing toward 300 100 volume-based plans May-18 Nov-18 Jun-19 May-18 Feb-19 Jun-19 ARPU trend of existing subscribers ARPU trend of existing subscribers 770 -0.5% /month +0% /month 400 • While started to -0.3% /month +1.0% /month Bt/month • Resulted in a slow Bt/month translate into the down in ARPU existing base being reduction uplifted 470 100 May-18 Nov-18 Jun-19 May-18 Feb-19 Jun-19 9
Mobile: Data grew reasonably with improving price/unit Postpaid Prepaid Data traffic (TB) Data traffic (TB) 300,000 300,000 +3.3% /month -0.1% /month +4.6% /month +3.2% /month - - May-18 Jun-19 Feb-19 May-18 Feb-19 Jun-19 • Data traffic clearly slowed down, aligning price and usage • Heavy data users are pulled back to fair usage policy Revenue/GB Revenue/GB Baht Baht -3.1%/ month -1.2%/ month 60 60 -2.8%/ month +1.8% /month 40 40 20 20 0 0 May-18 Feb-19 Jun-19 May-18 Feb-19 Jun-19 • Slowed down in revenue per unit decline • Revenue per unit started to be on a growing trend 10
Mobile: Continue addressing growth areas SEGMENTED SIMS PREPAID TO POSTPAID CONVERSION AIS ’s ARPU Uplift from Pre-to-Post %segmented SIMs among prepaid subs Industry Sub Mix 89mn 92mn subs subs 24% 22% Average 18% • Supported by tariff 14% +40% attractiveness and CAGR Postpaid Postpaid handset campaigns Postpaid: +10% Prepaid: -0.8% Sub mix Sub mix < 2018 > < Jan-18 Jun-19 > < Jan-18 Mar-19 > AIS ’s blended ARPU trend AIS ’s postpaid churn trend Revenue growth 26% Baht/month %/month 1.7% 263 U/L 1.4% subscription < Jan-18 Jun-19 > 244 1Q17 2Q19 1Q17 2Q19 • Conversion remains healthy, with postpaid churn • Resulting in improving blended ARPU rate under control. 11
Network quality remained superior OOKLA Throughput Speed Test Internal Drive Test Customer Perception Remained most preferred Awarded AIS the Fastest NW for 4 years Inline with external test Operator 2 4G Coverage 99.7% 99.5% 45% 45% 99.6% 99.6% 99.5% 100% 99.4% 44% 99% Operator 2 98% Operator 3 97% Operator 3 4Q18 1Q19 2Q19 >2.5Mbps % of customers conducted the survey <2.5Mbps selecting AIS Brand as a preference 4G %Good Quality on LINE app (Mar - May 2019) 99.6% 99.6% 99.6% 99.6% 99.6% 99.6% 100% 99% Operator 2 In 2018, had 98% 15 million samples Operator 3 97% 2 million unique devices Outnumbering and more reliable 12
FBB: Win with quality Maintain the 1mn sub target Continue strengthening brand preference FBB subscriber (‘000) Net adds market share 1,000 +53k +54k +65k +60k 39% 31% 19% 19% 855 731 795 677 623 2Q18 3Q18 4Q18 1Q19 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19E Focus on efficiency improvement Forward Enhance convergence strategy • Network Quality Assurance ARPU 20% higher Better Cross sell to mobile FMC, 29% • AIS Fibre Guru 57 Cities subscribers • Better content experience Utilize salesforce in shop, Utilization rate Simple Telewiz, and call-center ~ 45% Non-FMC, 71% • AIS Fibre LINE Connect Of 855k subscribers 13
Enterprise: Repositioned to be #1 service provider One-Stop ICT Service Provider Telecom Services ICT Services Digital Services • • • Focus on turnkey Leverage multi- Expand value chain in projects location data centers selected verticals for nationwide IoT/Smart Solutions • Leverage scale in • • mobile and data Partner with global Leverage AIS mobile network platforms to serve base for digital IaaS, PaaS, SaaS, marketing Hybrid Cloud • Focus on end-to-end managed services 14
Consumer digital services: Build engaging digital platforms • Subscription model: 2mn active subs • Advertising model • Joint-platform partnership • Explore and Video • Insurance expand value Segmentation chain in • Advertisement selected Place the right Digital verticals Partner thing at the right IoT Services Data Analytics platform time • Games 42mn AIS customers Deliver new value + Market • to customers Other customers Games analytics Mobile money • Drive subscriber acquisition: currently 6mn registered • Future data monetization: Advertisement / Nano finance 15
Q&A 16
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