q204 operating result

Q204 Operating Result

16 August 2004

Participants: Mr. Vichai Bencharongkul, Co-CEOMr. Sigve Brekke, Co-CEOMr. Petter-Borre Furberg, CFOMr. Premon Pinskul, DCFO

Investor Relations: [email protected] Tel. (66) 2 202-8000 ext. 31831, 31846-7

Disclaimer

Certain forward looking statements may be made in the course of the presentation. These forward- looking statements generally can be

identified by use of statements that include words or phrases such asDTAC or its management “believes,” “expects,” “anticipates,” “intends,”“plans,” “foresees,” or other words or phrases of similar import. Similarly,

statements that describe DTAC’s objectives, plans or goals also areforward-looking statements. All such forward-looking statements are

subject to certain risks and uncertainties that could cause actual results todiffer materially from those contemplated by the relevant forward-lookingstatement. The forward-looking statements contained in the slides are not

and should not be constructed as representations of the future performance of DTAC and that such statements are an expression of the Company’s reviews based on its current view and certain assumptions

including, but not limited to, prevailing economic and market conditions and currently available information.


Financial Highlights


Q2-Increasing CompetitionDTAC has met the competition by focusing on:

• Continued service innovation

“Happy-go-inter”: prepaid international roaming services with largest roaming coverage

Maxi Life: a wide range of exclusive services for ‘Maximize’customers

• Distribution network expansion

Focus on non-traditional channel, such as Cash Van Distribution

• Network improvement/commitment

Best in 13 out of 20 committed cities (Best in all clusters in BKK and No.2 in 7 cities)


Potential GrowthIndustry Net AddsTotal Market Sub & Penetration

• End 2003, total market: ~22 mil., with potential growth of 8-10 mil.

• Market growth remains at 20%+ largely driven by lower ARPU segments

Market Share of Subs Market Share of Net Adds

• Succeeded maintaining market share of subscribers

• Continue to take fair share of market growth

Source: Company’s estimates


ARPU DevelopmentVoice MOU

• Postpaid MOU dropped due to many holidays in Q204 while the rate/min remained the same.

• An increase in prepaid MOU and a decrease in revenue/min was driven by Songkran Promotion

Postpaid ARPU Prepaid ARPU

• Postpaid ARPU had a strong seasonal usage pattern and depended on the number of business days

• Prepaid ARPU tends to flatten out as a result of lower ARPU segment


Q204 Operating ResultsService Revenues Cost of Services

•Flat service revenues mainly due to a decrease in revenues from IR

•An increase in cost of services largely was a result of low operating expenses in Q104

•Higher SG&A was primarily due to the timing of expenses recorded

•A decrease in EBITDA was resulted from lower operating profit from wireless services

SG&A EBITDA


Key Drivers for Service Revenues GrowthService Revenues Subscriber Growth

Breakdown of Total Revenues ARPU


Service Revenues Development6M03 6M04

• Prepaid revenues grew significantly from last year and accounted for 47% at end Q204.

• Revenues from IR increased YoY and accounted for approx. 7% of service revenues, except seasonal effect in Q204.

• Revenues from VAS also grew; however, its percentage of service revenues remained at approximately 4%.

Q104 Q204


ProfitabilityEBITDA & EBITDA Margin EBITDA Margin ex Regulatory Cost

EBITDA Growth Net Profit Growth


Active management of operating expensesBreakdown of Service Cost (Q204) as % of Service Rev

• Consisting of cost relating to operating network mainly maintenance expenses, production cost of voucher cards and sales margin to UD, roaming charges to CAT and roaming partners, etc.

• Potential to gradually improve efficiency over time

SG&A & Provision for Doubtful Acc as % of Postpaid Rev. SG&A & Selling and Mktg. Expenses as % of Total Rev.

• Provision for doubtful accounts has stabilized at about 4% of postpaid revenues in Q204.

• Selling & Marketing expenses remained at approx. 6-7%.


Stronger Balance Sheet and Cash FlowsCAPEX & FCF Capital Structure (as of end Q204)

Financial Ratios Cash Flow Statement


Summary

Delivered healthy YoY growth as a result of an expansion on customer base and an increase in usageSustained service revenues despite seasonal factor and more intense competitionMaintained market share at approx. 30% by taking fair share of market growthDecreasing trend in ARPU as a result of deeper market penetration driven by lower ARPU customer segmentCost and CAPEX budget intact and EBITDA margin achieved as expectedGrowing operating FCF and stronger BS

q204 operating result

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