Investor Presentation - Advanced Info Services Plc. May 2020 - Advanced Info Services Public ...
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Investor Presentation
Advanced Info Services Plc.
May 2020
1
Agenda
• 1Q20 Performance
• Leading to 5G era
• 2020 outlook
2
1Q20 Performance
3
1Q20 Performance
Service revenue (Bt mn) • Mobile revenue was negatively affected by price
% Contribution
ex. IC&TOT competition and COVID-19 impact. Postpaid growth
to service revenue ex. IC&TOT
-1.1% YoY +27% YoY Flat YoY was offset by prepaid decline. Revenue from
international roaming and prepaid tourist SIM faced
significant drop from faded travelers.
FBB • FBB revenue grew double digit as subscriber base
5.0% continued to grow, albeit at slower rate.
Mobile
3.4% Other
92%
• EBITDA growing from net cost reduction from TOT
partnership
• D&A grew YoY from network expansion and the
acquisition of 2600MHz in Feb.
• Interest expense dropped slightly from 4Q19
repayment
Profitability (Bt mn)
and TFRS16 effect -33% YoY +3.8% YoY +12% YoY
• FX loss from unrealized loss as Baht depreciation on
Spectrum Usd
2,279mn
+13%YoY • NPAT reported negative growth from higher
depreciation and FX loss
-1.9% YoY -7.5% YoY -11% YoY
5
Mobile revenue impacted from roaming and competition
Mobile Revenue (Bt mn) % Revenue Contribution
mobile business
-6.9% YoY +8.7% YoY -34% YoY -1.1% YoY
1Q19 1Q20
Prepaid
Postpaid
43% 47%
3%
IR&IDD
2%
54% 51%
Mobile net adds (thousand) Postpaid Mobile ARPU (bt/month/user)
five consecutive quarters Prepaid Postpaid and prepaid
354 350 Postpaid
250 208 -0.8% YoY
106 33 529 537 531 537 525
-2.2% QoQ
(32) 174 182 179 173 Prepaid
(115) 162
(276) -6.6% YoY
(891) -6.4% QoQ
1Q19 2Q19 3Q19 4Q19 1Q20
1Q19 2Q19 3Q19 4Q19 1Q20
Subscribers % Change Postpaid +7.0%YoY, +0.4%QoQ
Prepaid -2.8%YoY, -2.7%QoQ • Prepaid ARPU pressured by continued unlimited fixed speed plan at Bt200 and Bt150.
• Prepaid revenue was affected from less traveler segment and continued unlimited
• Postpaid ARPU impacted from new unlimited speed plan at Bt300, launched in late-
data pricing. Subscribers dropped from tourist SIM started in early Feb.
Feb in response to competition
• Postpaid revenue grew high single digit YoY, slowing down from double digit
growth in FY19. Net add affected by shop close led to less subscribers acquisition.
5
COVID-19 impact on traveler revenue and handset sales
Core service revenue significantly declined YoY in Mar-20
COVID-19 situation and weak economy put pressure
%YoY Service revenue on ARPU and new postpaid acquisition
2.2% 2.6% Postpaid acquisition (‘000)
498 464 461 500
Jan-20 Feb-20 Mar-20 337 -32% YoY
-33% QoQ
-4.1%
• In Mar-20, Service revenue declined 4.1% YoY as mobile revenue dropped
1Q19 2Q19 3Q19 4Q19 1Q20
5.5% YoY while fixed broadband revenue increased 26% YoY.
Handset sale slowdown in the latter half of Mar-20, when
IR and prepaid tourist SIM revenue dropped partial lockdown was implemented
IR and prepaid tourist SIM revenue (Bt mn) Unit sales (‘000)
1,040 919 1,036 957
-43% YoY 684 -34% YoY
-44% QoQ -29% QoQ
1Q19 2Q19 3Q19 4Q19 1Q20
IR and prepaid tourist SIM contribution 1Q19 2Q19 3Q19 4Q19 1Q20
2.3% 2.3% 2.0% 2.3%
1.3% Handset subsidies dropped in Mar-20 as AIS shops
and channels in shopping malls were closed
1Q19 2Q19 3Q19 4Q19 1Q20
6
Demand for home broadband emerged late March
FBB business impacted by competition & COVID-19 FBB subscriber growth slowdown
Decelerated revenue growth
27% 26% 32% 30% 27% 1,090
937 1,038
795 855
+3.9% QoQ
1,475 1,579 1,640
1,288 1,380
Net addition (‘000)
FBB revenue (Bt mn) 82 101
65 60 Ending subscriber
YoY growth 53
(‘000)
1Q19 2Q19 3Q19 4Q19 1Q20
1Q19 2Q19 3Q19 4Q19 1Q20
• AIS fibre had a decelerated growth of 27% YoY and 3.9% QoQ • Net add slowed down as AIS Fibre withdrew aggressive discount
offered in an attempt to uplift ARPU.
ARPU softened amid competitive pricing Offer more affordable Working from Home Package
-8.7% YoY Bt399
563 558 549 -3.6% QoQ Max speed 4G Internet Unlimited for 3 months
533 Max speed internet mobile SIM for Office 365 and Zoom
514
ARPU 100/100Mbps 1GB*
(Bt/sub/month)
1Q19 2Q19 3Q19 4Q19 1Q20
• As the city lockdown emerged during the last week of March, Working
• FBB APRU continued downward trend as the competition elevated with from Home Package were introduced to support the customer demand
smaller package, Bt399 for 100/100Mbps, introduced in the market. and resulted in higher subscription rate in late March.
7
Enterprise business supported by EDS and Cloud
Enterprise non-mobile services is on higher demand
1Q20 Enterprise revenue
Non-mobile, +10% YoY
Bt3.2bn Mobile, 27% -0.6% QoQ
1,000
+6.4% YoY, -2.6% QoQ 73%
Enterprise non-mobile
500 revenue (Bt mn)
-
1Q19 2Q19 3Q19 4Q19 1Q20
Enterprise mobile services pressured by COVID-19
Non-airtime services include
+5.1% YoY
3,000 -3.3% QoQ Data ICT
EDS CLOUD Solution
center
2,000
1,000 Enterprise mobile
revenue* (Bt mn) Higher demand in EDS and Cloud
-
1Q19 2Q19 3Q19 4Q19 1Q20 • In 1Q20, lower new data links implemented as site
inaccessible, but since late-March, more requests of work
• Enterprise mobile services were impacted by the COVID-19, from home’s bandwidth have increased.
resulting in a QoQ drop in revenue. • For Cloud services, there was a high demand for WFH
• AIS has mitigated this impact by launching minimal packages services e.g., Team for Thailand (Office 365), Virtual
for customer retention and extending credit term. desktop infrastructure.
*This revenue is embedded in mobile service revenue
8
Ensure continuity of service during COVID-19
New acquisition channel Top up & Payment channel Product and service
Reinforce and accelerate %amount via online channel1)
• AIS online store
• Pop-up store
• Telesales
• Other business partners in retail
space >40% >60%
• Work from home package: targeting mass
consumer and students on both mobile and
< prepaid postpaid> broadband offerings.
• VDO package
• Bundled COVID-19 insurance with data or
%amount via online & self-service2) FBB subscription
AIS' COVID responses
• The payment deferral for 1-3 months with no
>75% >70% interest
• The extension of validity for 1-3 months
• The launch of new and more affordable
packages for affected customers
< prepaid postpaid >
as of Mar-20
1) Online channel: Mobile banking/mPAY app/myAIS/RLP/recurring DD,CC
2) Self-service channel: mPay Vending/ATM
9
1Q20 Cost breakdown (Pre-TFRS16)
1Q19 Change 1Q20 %Change
Cost of service (19,817) 568 (20,385) ▲2.9% Increased mainly from network expansion
Regulatory fee (1,403) 6 (1,409) ▲0.4% Flat following core service revenue
Depreciation & Amortization (8,691) 1,021 (9,712) ▲12% 4G network, FBB and 2600Mhz license
Network OPEX & TOT partnership (gross) (7,371) -197 (7,173) ▼2.7% Lower rental cost offset by higher network OPEX
Network OPEX & TOT partnership (net of rev.) (5,139) -601 (4,538) ▼12% Lower rental cost after settling disputes with TOT
Other costs of services (2,352) -262 (2,090) ▼11% Lower prepaid commission
Cost of SIM and device sales (7,159) -740 (6,419) ▼10% Dropped from lower device sales
SG&A (6,262) 26 (6,288) ▲0.4% Higher admin expenses offset by marketing expenses
Marketing Expense (1,934) -172 (1,762) ▼8.9% Lower marketing activities in 1Q20
Admin and others (4,328) 198 (4,526) ▲4.6% Higher bad debt provision and staff cost
Net foreign exchange gain (loss) 84 506 (422) ▼602% FX loss from Baht depreciation of A/P for CAPEX
Other income (expense) 203 68 271 ▲34% Reverse accrued expenses
Finance cost (1,217) -15 (1,201) ▼1.3% Lower interest-bearing debt from debt repayment
Common size
Cost of service 40.7% 41.4%
SG&A
(Net cost of TOT partnership) 14.5% 14.7%
1Q19 1Q20 1Q19 1Q20
10Strong Balance sheet and cash flow to support investment
Balance Sheet 1Q20 Cash flow
(Bt bn) (Bt bn) Cash increase Cash decrease
Right-of-use asset Bt65bn
right others A/P Operating Investing Financing Net cash
incurred from long term spectrum
of use
contracts mainly including license
2100MHz agreement and 21 39 payable
65 23.0
tower rental 80
10.9
spectrum Assets Liabilities 5.9
license 118 2.0 2.9
interest- 0.5 0.2 0.6
310 94 bearing
B/S
CAPEX
Cash
cash flow
Finance cost
Lease
increased
Cash
Income
tax paid
Operating
liabilities paid
Investment in JV
Spectrum license
375 debt
1Q20
PPE Equity 64
122 lease Lease liability Bt64bn
65 liability
32 incurred at the beginning
40 period was the amount
A/R 18 25 others
31 of the right of use.
cash retained earnings
others Operating cash flow was in healthy level to support
CAPEX, debt repayment, and dividend payment.
0.7x 1.5x Investing cash flow was Bt8.1bn, which included
Net debt to EBITDA Interest bearing debt spectrum license payment of Bt2.0bn
to Equity Average finance costs = 3.0% p.a.
• Maintained investment grade credit ratings
0.4x 42% • Fitch: national rating AA+ (THA), outlook stable
Current ratio Return on Equity • S&P: BBB+, outlook stable
11Impact from TFRS16
TFRS16 adoption P&L impact
TFRS 16: Lease (replacing IAS17: Operating lease (Bt mn)
and Finance lease)
Bt-248mn
The standard requires the operating leases obligations
as of 1 January 2020 to be recognized as right-of-use 2,920
assets at the present value of lease payment over the
remaining lease term at an amount equal to lease 14
7,004 54 6,756
liabilities adjusted by prepaid payment. The leases 2,873 363
including tower lease agreement, site rental, office &
shop building rental, and minimum payment on TOT’s
2100MHz spectrum. The key changes are as follows:
Opening balance impact on 1 Jan 2020
• Increase in Right of use of Bt67.3bn
• Increase in Lease liabilities of Bt66.3bn Net profit Network D&A SGA Finance Income Net profit
Pre-TFRS16 OPEX cost tax Post-TFRS16
Balance as of 31 Mar 2020: Right of use Bt65.3bn
and Lease liabilities Bt64.3bn
12Leading to 5G era
13Combination to deliver best 5G quality
Best performance combining each band capabilities Superior throughput to serve all use cases
Speed Capacity
X 10 X 10
Maximum speed up 10 times network
to 1-10Gbps capacity over 4G
200-300m
Anchor band for Combined benefit Super wide 0.5-1km
nationwide coverage of good coverage bandwidth for multi
and high capacity gigabit services
3-5km
To deliver best-in-class 5G networkSpectrum management to strengthen our leading position
Low Band Mid Band High Band
900 MHz 1800 MHz and 2100 MHz 26 GHz
• Provide nationwide coverage of 3G and 4G • Provide capacity of 3G and 4G Enhance capability to serve enterprise
• Potential to upgrade into 5G • Potential to upgrade into 5G and industrial services
• Support rollout in specifically hotspot area
such as industrial estates
700 MHz 2600 MHz
• Awaiting readiness of devices and use
2x15 MHz to secure long term position 100 MHz to reach full potential of 5G service cases
• Anchor for blanket coverage with lower capex • Best 5G experience for mobile with strong
• Ensure better in-building experience combination of capacity and coverage
• Support network coverage of 900Mhz • To penetrate FWA need for specific locations
with physical limitation
• Over 16mn 4G devices compatible on 2600Mhz
More spectrum to be refarm for providing 5G service in near future
5G expected to be main stream network
2020 2025 2027 2029 2031 2033 2035 3G
beyond 2025
4G
700
• Nationwide 5G
Band
MHz
Low
Expiry • 4G and 5G will co-exist at least in the
900 Refarm coverage
MHz
3G
date next 5 years.
• 3G, currently 23% of users, should
1800 Refarm
MHz subsequently fade out during the same
• Metropolitan
Band
period as 5G adoption rises.
Mid
2100 Refarm
MHz and city
3G
area
2600
MHz
Current users by technology:
Band
High
26
GHz
4G-73%. 3G-23%, 2G-4%
*Grant date within Feb 21 subjected to ecosystem readiness5G roll out plan
Nationwide roll out in strategic area Build up on current base station Catalyst for 5G expansion
Non Standalone Standalone Declining in 5G network cost
4G core 4G core 5G core Estimated network investment cost per site
Key cities coverage Eastern Economic
In 77 provinces Corridor
-9% CAGR%
5G
13% of 59% 4G LTE 5G NR 4G LTE 5G NR
population of area
2020 2021 2022 2023 2024 2025
• Network investment during early stage of
technology expected to decrease with -9%
Target coverage Rollout of 2600 Mhz CAGR
by end-2020 within Jun 2020
Commercial use cases in both consumers
and enterprise segments
• Target 77 cities coverage (not an entire province) • Both NSA and SA can be deployed on existing
Technology migration from 4G to 5G
• 27 promoted zone in EEC towers/sites.
• 5G network investment on selective locations • Multi-band and multi-technology allowing flexibility
• Prime CBD area with high 5G adoption of equipment to support both 4G/5G 5G adoption rate and consumer behavior
• High data usage and utilization of 4G • Dynamic spectrum sharing (DSS) will support
• Data consumption with higher bandwidth
• Main attraction and landmark seamless capacity allocation between 4G and 5G
165G ecosystem with firm support on both devices and equipment
More 5G devices with lower price forthcoming by end-2020 5G statistics and device ecosystem
Expect over 250 model of 5G handset starting price (USD)
5G mobile devices by end-2020 Over 26.1 million 5G subscribers in China as of Feb20
Expecting164 mn 5G subscribers in China by end of 2020
500
300 150*
381 Operators with 5G investment plan
Over Out of 816 total operators worldwide had announced they
2019 2020 2021
40 models were investing in 5G
• Current 5G handset model is 63 Operators providing 5G for mobile
offered as low as USD500. and 34 operators launched 5G FWA home broadband
• More affordable models are services
expected from end of 2020
12 Operators deploying mmWave
1Q20 2020 2021 (Inc. n257, n258, n261, and n260)
*Source: GSMArena
FWA devices 250+ Devices
had been announced for 5G compatible. Increasing 50
• FWA equipment (router) price will
models from Jan 2020 to Mar 2020
also be driven down as market
particularly in China grows. 40 mobile phone
commercially available and ready for 5G
13 CPE devices (Customer Premised equipment)
Huawei launched 5G CPE (Consumer
Premise Equipment) Pro in Feb 2020 Commercially available.
Source: GSA Mar 2020 (5G Data as of Dec2019)Reinforced 4G with new spectrum
4G still accounts for half of global connections in 2025 4G remained primary network as
5G helps offloading capacity in dense area
*5G adoption in Thailand is expected to be faster than global average
% of Global connections by technology
Global average
70%
4G 56% 4G coverage remains the
60% 2025
50%
overlaying network across
the country
40% 5G 20%*
30% 2025
20% 3G 18%
10% 2G 5%
0%
2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: GSMA
Device Compatibility Technology trend by connection
on AIS network by GSMA
as of 4Q20
2600MHz 4G
Expected usage of 4G starting to
17 million devices
decline after 2023
4G/5G Dynamic spectrum
700MHz 56% sharing will densify network
of total global connection in the capacity in appropriate area.
12.5 million devices
next 5 year still rely on 4GDeliver new
experience with 5G
Bring In Pioneer Digital
Enterprise
New
Catalyst
Expand market potential
with 5G FWA
19Mobile: Deliver new experience with 5G
Solution creator to offer premium package Drive Top-Tier Consumers “Upgrade"
• Co-create with partners to offer aggregated AR, VR and Target offering
content services to mobile package Data speed: 1000+Mbps Mbps (unlimited data)
Blended ARPU (Bt/month)
Core Innovative Services
980 790
1) New Immersive Experience and seen the Unseen 514
402 251 307
245
with 4K & VR (Live & Special Contents)
2) New Augment Reality Experience 2G 3G 3G 4G 4G 5G 5G
Content bundling 3) e-Sport & Gaming (The lowest Latency) May-13 Jan-16 Jun-20E Dec-21E
package
• The transition from 4G to 5G will benefit AIS
Higher ARPU boosted by 5G adoption
• Many service providers are creating 5G packages aimed at
capturing extra value.
5G ARPU uplift Blended ARPU uplift
(from 4G upgrade)
China Telecom ▲10% SK Telecom ▲1.3% QoQ
• Innovative Services & Quality improvements will drive the China Mobile ▲6.5% KT Corp ▲0.5% QoQ
demand within the 5G technology cycle
20Broadband: Expand market potential with 5G FWA
Fill-in broadband gap with FWA
Broadband underserved market: 5G-FWA has potential to supplement the coverage of Expected broadband market size
in 2030
home broadband, extending the service to remote or fibre-inaccessible areas
2020 2021 2022 2023 2024
Urban Area
~15mn ~10%-15%
• Inaccessible condo/villas/town houses
• Underserved condo (copper technology)
Rationale
2030E household %FWA
• Spectrum availability: Mainly on the 2600MHz range
with broadband of total broadband
• FWA CPE will likely remain limited and at high price level
connection connection
Suburb area
• Populated suburb area
• Broadband market in Thailand is
Rationale expected to grow with 4% CAGR.
• Increase FWA CPE affordability
• FWA will be supplement and as the
areas have increased utilization, fibre
FWA to supplement FBB remains key technology connectivity will be more efficient to
Faster rollout to penetrate new area Reliable speed and connectivity serve demand.
No or minimal installation at home High investment for last mile
Easier and lower maintenance installation (dedicated last mile)
Leverage under-utilized spectrum in suburb area Investment feasible in area with high
May not be feasible in area with high mobile data utilization
utilization which exhausts spectrum
21Enterprise: Opportunity for large scale offering
5G product framework for business
Industry Estate (IE) Strategic Partnership
Industry
Solution
1) Remote control application
2) Digital signage
Product Solution 3) VR/MR/AR
4) Drone
5) VDO Analytics
1) FWA-EDS: Bangkok and EEC
Infrastructure 2) Multi-Access Edge computing (MEC)
(Public & Private Network) 3) Private Network
Lifting up ARPU and brand
General Mobile 5G Special campaign to enterprise top
executives mobile users to adopt 5G
device (Target 10k sub by end 2020)
22Enterprise: Pioneer digital enterprise
Industry Smart Factory
solution
Product
solution
Digital Signage Drone Data center VR Tour
Infrastructure Multi-Access
FWA-EDS Edge computing
General 5G enterprise
Mobile 5G mobile package
232020 outlook
242020 as a challenging year for telecom sector
Weak economy led to COVID-19 impact might continue throughout 2020
slowdown in telecom growth
Effect from partial lockdown
YoY growth
5% Telecom shop closure across the country Acquire new subs with
• Decline in handset sale alternative channels;
-5% • Bar activities for new acquisition both online, direct sale,
4Q16 4Q17 4Q18 4Q19 prepaid and postpaid temporary shops
GDP yoy AIS core service revenue Indutsry Enterprise clients implement cost control Cross sell digital
solutions to strengthen
Positive drivers Negative drivers enterprise portfolio
Revenue loss from tourists and roaming
• Ongoing social distancing • Rising unemployment
Continued movement restriction • Businesses shutdown
• Severe drought Opportunity loss and cost incurred from NBTC measures
Measures from NBTC to support subscriber Cross sell opportunities
GDP growth 2020 outlook forecasted by BOT, World bank, ADB, to raise revenue after free
during COVID
local and foreign research firms are in range of -4.8% to -6.7% data/min used up
• 10Gb free data subsidized
by NBTC budget of Bt100/subscriber
Resilient in nature to the economic downturn, telecom normally
• 100 mins free on/off net call for all
performs ahead of the general GDP trend. subscribers
Revenue outlook by segment
Weak consumer spending led to revenue pressure
• Mobile business ARPU Sub
Rising bad debt from extended payment terms Extend payment period to
support and retain
• Fixed broadband ARPU Sub customer in long term
• Enterprise business Enterprise Solution Delay cash flow required more working capital Prepare source of funds
Mobile for stress case 25Cost management to minimize impact on profitability
2020 Cost saving initiatives to offset incremental cost from 5G investment and operating
Cost of service SG&A
• Network depreciation – Capex saving on 4G/5G with Dynamic • Marketing expenses
spectrum sharing (DSS) technology • Slowdown marketing activities
• Decline in handset subsidy
• Network operating cost –
• Optimize network operation cost with 4G/5G site co- • Admin and other expense
location • Headcount control to manage staff cost
• Negotiate with vendors and landlord to reduce expenses • Shop space rental saving
• Other cost of service – Selective spending on contents for TV
platform
If COVID-19 situation prolonged, further cost measures
• Revenue-related cost such as regulatory fee and prepaid
commission varies following decline in revenue will be considered based on evolving situation
26Staggered payment profile of spectrum and capex
CAPEX for 4G/5G network Investment rationale for 4G/5G Payment profile of spectrum
(Bt bn) (Bt bn) 2600MHzx100MHz
35-40* Total network capex of Bt35-40 bn
1800x20MHz
35-40 Investment cost sharing 900x10MHz
with Multi band & Multi
technology on 2600MHz 28.6 700x15MHz
4G 5G 2.0
3.1
46
36 14.2 13.9
21.7 3.1 11.0 2.9
23 20
7.6 7.6 7.6 6.4 4.7
2.9 2.9
1.8 3.5 3.5 3.5 3.5 1.8
2016 2017 2018 2019 2020E 2020 2021 2022-2024 2025 2026-2029 2030
per year per year
• CAPEX 2020 raised from network expansion
Minimize pure 4G Add 5G coverage
• 4G capex for capacity expansion on investment in potential are for
2600Mhz brand perception
• 5G capex for launch network
coverage with 2600 Mhz Total of Bt125bn* toward 2030
Ongoing 5G capex plan over long term
• Saving on 4G investment as equipment varies by following factors
compatible for both 4G/5G technology • 5G commercial use cases in the market
• Customer adoption rate
• 4G to 5G migration *26GHz license payments of Bt5.3bn to be made within 1 year
after official announcement from NBTC on 16 Feb 2020
27Solid operating cash flow,
while maintaining financial commitment in uncertainty
Positive operating cash flow even after CAPEX Sufficient debt capacity
Solid cash flow from operation Funding alternatives prepared for uncertainty
(Bt bn)
Cash increase Cash decrease Cash on hand of Bt30,557mn
Operating Investing Financing Net cash
23.0 Credit facility available to drawdown
10.9
• Over Bt52bn of short-term and long-term credit facility prepared
5.9 for uncertainties
2.0 2.9
0.5 0.2 0.6
CAPEX
cash flow
Cash
Cash
paid
Income
Finance cost
Lease liabilities
increased
Operating
tax paid
Investment in JV
Spectrum license
Opportunity to tab into bond market
• Investment grade credit rating
• Fitch: national rating AA+ (THA), outlook stable
• S&P: BBB+, outlook stable
Operating cash flow trend impacted from COVID-19 in late
Mar-20, yet remained solid
Maintain investment plan Strong financial flexibility
Capex plan 2020 Internal target for financial ratio
• Network capex of Bt35-40bn • Net debt to EBITDA under 2.5-3.0* times
• Spectrum payment of Bt29bn
*Net debt to EBITDA ratio based on S&P method 28Appendix
291Q20 Summary
Impact from the pandemic COVID-19 Secure long term competitiveness with 5G
• The COVID-19 pandemic has affected telecom from early February with • Strong spectrum portfolio to deliver best 5G service in both short and long
faded tourist both inbound and outbound term. New revenue opportunities includes ARPU uplift in mobile broadband
• Partial lock down resulted in shops temporary closed and caused with new use cases, FWA and digital business.
slowdown in top up revenue and new acquisition both on mobile and • Strengthen 4G network coverage and capacity with 700Mhz and 2600Mhz
fixed broadband. ready to serve over 16million compatible devices.
• Rising mobile data usage and demand for home broadband are offset
with discount and unlimited data plan offering which continued to
Maintained profitability performance
pressure ARPU. • Core service revenue was Bt33,090mn, flat YoY but decreasing 4.3% QoQ.
• Measures to enhance sales channel include ramping up online sales, • With careful cost control, EBITDA was Bt19,576mn or +3.8% YoY with
telesales, utilizing more smaller size local dealers and pop-up shops. margin of 45.7%. Net profit was Bt7,004mn, decreasing 7.5% YoY and 0.9%
QoQ mainly from new spectrum, network investment, and FX loss.
Mobile revenue impacted from roaming and competition 2020 Outlook
• Internal roaming and prepaid tourist SIM which normally contributes 2% of • Capex Bt35-40bn with added investment in 2600MHz to support both 4G
mobile revenue declined >40% YoY, QoQ. and 5G
• Postpaid acquisition and handset subsidy also slowdown due to temporary • Despite negative outlook due to ongoing COVID-19 impact and severe
shop closure. drought, telecom is relatively resilient to the downturn and normally
• Price competition in form of unlimited data plan continued to pressure performs ahead of the general GDP trend
revenue growth. • AIS will be focusing on mobilizing operational responses to protect and
grow revenue while managing cost to ensure resilient cash flow and
Demand in home broadband emerged in late March profitability.
• Withdrawal of discount offerings causes slowdown in FBB sub acquisition, • AIS is expected to continue generating positive cash flow after network
hence slower pace of revenue growth in 1Q20 investment and has sufficient credit facilities.
• Demand for home broadband due to lockdown arrived in late March while
subscription came under discount offerings for work-from-home and
students.
30Strong Balance sheet and cash flow to support investment
Balance Sheet 1Q20 Cash flow
(Bt bn) (Bt bn) Cash increase Cash decrease
Right-of-use asset Bt65bn
right others A/P Operating Investing Financing Net cash
incurred from long term spectrum
of use
contracts mainly including license
2100MHz agreement and 21 39 payable
65 23.0
tower rental 80
10.9
spectrum Assets Liabilities 5.9
license 118 2.0 2.9
interest- 0.5 0.2 0.6
310 94 bearing
B/S
CAPEX
Cash
cash flow
Finance cost
Lease
increased
Cash
Income
tax paid
Operating
liabilities paid
Investment in JV
Spectrum license
375 debt
1Q20
PPE Equity 64
122 lease Lease liability Bt64bn
65 liability
32 incurred at the beginning
40 period was the amount
A/R 18 25 others
31 of the right of use.
cash retained earnings
others Operating cash flow was in healthy level to support
CAPEX, debt repayment, and dividend payment.
0.7x 1.5x Investing cash flow was Bt8.1bn, which included
Net debt to EBITDA Interest bearing debt spectrum license payment of Bt2.0bn
to Equity Average finance costs = 3.0% p.a.
• Maintained investment grade credit ratings
0.4x 42% • Fitch: national rating AA+ (THA), outlook stable
Current ratio Return on Equity • S&P: BBB+, outlook stable
31Best position to lead into 5G era
1 Strong & competitive spectrum portfolio 2 Strengthen 4G network quality and capacity to compete
4G technology as main connectivity's over the next 2-3
Secure long term competitiveness years
Strong spectrum portfolio to deliver
5G network investment in selective locations to support
best-in-class 5G services
4G capacity
Majority of 5G CAPEX to Sizable device readiness
support 4G on 4G-2600/700MHz
80% 57%
Efficient investment with enhanced flexibility 80% of 5G CAPEX deploy Over 17mn smartphones
Enhance coverage and capacity from complete multi-band multi-technology or 57% of devices on AIS
set of bandwidth from low, mid to high band to concurrently support 4G network with 4G ready on
Optimize investment and operating cost with new 700Mhz or 2600Mhz
technology that can support both 4G and 5G
32Best position to lead into 5G era
3 Bring in new catalyst 4 Retain solid financial strength
Consumer
Amidst pandemic and after
Enhanced Growing core business • Mobilize operation to protect revenue and grow certain
Mobile Broadband
Faster and better experience
• Connectivity revenue revenue segment
• Established business model • Manage cost and cash flow resiliency
• Telco-industry competition • Continue our investment plan and deliver financial
Fixed
commitment
Wireless Broadband • Cross function operating model
High capacity
Under
Enterprise
2.5-3.0*
Growing beyond core – B2B/B2B2C
• Capturing revenue beyond connectivity times
• Emerging use cases and business models Net debt
• Cross-industry competition to EBITDA
• Partnership platform operating model Maintain healthy financial ratio after including
all new spectrum liability and investment
Massive Mission Critical
Internet-of-Things Enablement
Efficiency and low-cost Ultra-low latency and high reliability
*Net debt to EBITDA ratio based on S&P methodology
33New Business Models
Solution Enabler & Solution Creator”
Today Solution Enabler Co-Creation
AIS AIS AIS
Billing on Behalf Rev Sharing
$$ $$ $
$ $$
Bearer Enabler
Service Service Service
Co-Create
$$
$$
3rd party 3rd party 3rd party
Customers Customers Customers
Services Services Services
Digital Service Digital Service
(OTT)
Mobile Internet Model Business Model & Monetization Business Model & Monetization
B2B2X: Usage, speed, latency, Operator aggregated AV, VR and
reliability, Naas, Network slicing, content services, Convergent offer,
API, MEC, SLA sponsor data, advertising
34New normal after COVID
Customer going digital
Moving toward • Renewed channel strategy
My AIS application Digital online channel,
as one-stop service Channel • Accelerate serving customer via digital
reducing footprint
on mobile touch point platform
• Enhance AI Chatbot
to serve customers
on personalized level
Opportunities to • Digital mobile brand
Digital capture demand
• Introduce new AI call center agent with Solution from new normal • Enterprise and SME customers seek new
80% target customer satisfaction solutions to sustain
Leap adoption on all digital channels during
pandemic
PAYMENT
• Potential to move portion of workforce to
Cost reduction
5.5 mn 4.9mn 8.8mn 6.2mn
Digital work from home
active user transactions in transactions in transactions in Disruption across the work
Mar20 Mar20 Mar20
processes • Operating cost reduction from digitalized
+39% +14% +3% +9% organization
QoQ QoQ QoQ QoQ
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