Singapore Telecommunications Limited · SGX:Z74

Singapore Telecommunications — Advanced Info Service — Investor Presentation (June 2019)

27 slides from Singapore Telecommunications's investor presentation, June 2019

  1. Slide 1: Investor Presentation

    Investor Presentation Advanced Info Service Plc. June 2019 Ticker: ADVANC (SET) AVIFY (ADR) Add AIS IR LINE@

  2. Slide 2: AIS: Digital Life Service Provider

    AIS: Digital Life Service Provider Lead and digitally transform in Grow stronger in Partner to offer differentiated “Mobile” “Fixed broadband” “Digital service/platform” Mobile revenue market share Subscriber market share Focused on five key areas (market size of approx. 8.7mn) 29% 48% 34% 1Q19 16%

  3. Slide 3: 1Q19 Overview: Competitive in mobile while strongly grew in non-mobile

    1Q19 Overview: Competitive in mobile while strongly grew in non-mobile Core service revenue: grew 2.5% • Revenue +1.1% YoY, +0.4% QoQ while discontinuing fixed-speed YoY driven by FBB and enterprise Mobile unlimited subscriptions • 322k net addition with data consumption of 11.4 GB/month +2.5% 33,96

  4. Slide 4: FY19 Pre-TFRS 15 Guidance (maintained)

    FY19 Pre-TFRS 15 Guidance (maintained) FY19 guided items Guidance Rationale Core service revenue Mid-single digit • Mobile: stay competitive in maintaining business scale growth driven by 4G and penetration in growing segments • FBB: deploy FMC (Fixed- Mobile Convergence) targeting 1mn subscribers m

  5. Slide 5: Mobile: Revenue grew softly from price competition

    Mobile: Revenue grew softly from price competition Revenue growth remained challenging Strong net addition while 4G penetration continued uptrend Mobile revenue (Bt bn) 1Q19 Mobile revenue mix +1.1% YoY Postpaid, 46% 4G Penetration on total base +0.4% QoQ 57% 59% 63% 31.2 31.4 31.6 50% 54% Prepaid,

  6. Slide 6: FBB: Competitively grew while focusing on FMC

    FBB: Competitively grew while focusing on FMC Revenue remained healthy growth Focused on quality acquisition Fixed broadband revenue (Bt mn) ARPU (Bt/month) Beginning Net addition (‘000) subscriber (‘000) 618 610 795 573 574 563 731 677 65 1,212 1,288 +27% YoY 623 54 1,013 1,094 1,117 +6.3% QoQ 572

  7. Slide 7: Digital service: Expanded strategic digital services for both enterprise and consumer

    Digital service: Expanded strategic digital services for both enterprise and consumer Increased capabilities in enterprise segment Strengthened engaging consumer platforms • Maintained target to achieve high-single digit growth in 1 Video FY19 for enterprise segment • Debuted the first eSports chann

  8. Slide 8: Continued highly-recognized in brand and customer engagement

    Continued highly-recognized in brand and customer engagement Ranked World’s Strongest Telecoms Brand Most retweeted hashtags in 2018 • Awarded “World’ Strongest Telecoms Brand” by Brand Finance with a brand strength index (BSI) • Received “2018 Most engaged brands score of 90.0 out of 100, highest i

  9. Slide 9: Ongoing cost management supported profit growth QoQ

    Ongoing cost management supported profit growth QoQ EBITDA and net profit gradually improved sequentially YoY EBITDA (Bt mn) Flat YoY 18,905 815 18,906 149 433 222 10 • YoY, EBITDA was stable mainly from higher 46.2% 43.1% network OPEX and localized marketing margin margin EBITDA Core Cost of SGA Ne

  10. Slide 10: Maintained financial flexibility for future growth

    Maintained financial flexibility for future growth Balance Sheet 1Q19 Cash flow (Bt bn) (Bt bn) Cash increase Cash decrease others A/P goodwill Net cash spectrum Operating Investing Financing spectrum 3 18 39 license 21.1 license payable 110 68 11.4 Assets Liabilities 5.9 3.1 240 0.5 0.5 0.2 0.2 297

  11. Slide 11: License payment and debt repayment schedule

    License payment and debt repayment schedule Spectrum license payment schedule Debt repayment Schedule 900x10MHz license payment 26% 1800x20MHz license payment • All in THB currency Bt103bn • S&P rating: BBB+ • Avg. cost of debt = 3.0% p.a. (Bt bn) 74% 62.7 Float rate Fixed rate (Bt bn) 14.8 13.9 13.

  12. Slide 12: Appendix

    AIS APPENDIX 12

  13. Slide 13: Mobile: Maintain leadership and stay competitive to retain scale

    FY19 Outlook Mobile: Maintain leadership and stay competitive to retain scale Mobile Revenue Market Share Trend 49.6% 48.6% 48.3% • Retain business scale in both 26.6% 25.9% 27.6% subscriber and revenue • Optimize and digitize operation 23.8% 25.4% 24.2% 2016 2017 2018 FBB Branding Offering Network

  14. Slide 14: FBB: Focus on FMC to win homes

    FY19 Outlook FBB: Focus on FMC to win homes Mobile FMC Mobile Fixed Mobile Convergence • 2019 target: 1mn subscribers FBB • Move to ARPH (average CVM Customer Value revenue per household) Management Investment Growth strategies FBB • Investment of Bt4-5bn per annum • Deploy FMC and CVM to drive cust

  15. Slide 15: Digital Service: New strategic offerings in both consumer and enterprise

    FY19 Outlook Digital Service: New strategic offerings in both consumer and enterprise Mobile Consumer Enterprise : Leverage and enhance customer base via partner : Integrated services of Telecom-ICT-Digital platform Telco Mobile services Game Insurance Data network ICT Products Digital services serv

  16. Slide 16: 1Q19 Financial Highlights

    1Q19 Financial Highlights Pre-TFRS 15 Post-TFRS 15 Amount Bt mn 1Q18 4Q18 1Q19 %YoY %QoQ 1Q19 difference Mobile revenue1) 31,208 31,426 31,555 ▲1.1% ▲0.4% 30,678 (878) FBB revenue 1,013 1,212 1,288 ▲27% ▲6.3% 1,288 - Other revenues1) 926 1,045 1,119 ▲21% ▲7.0% 1,078 (40) Core service revenue 33,147

  17. Slide 17: Impact from TFRS 15 adoption

    Impact from TFRS 15 adoption Subsidy Contract Type I Subsidy Contract Type II • Subsidy booked in marketing expense is capitalized as contract • Subsidy booked as negative device margin requires a re- asset and amortized against service revenue over the contract allocate between service and device r

  18. Slide 18: 1Q19 Revenue Breakdown

    1Q19 Revenue Breakdown Mobile revenue* Fixed broadband revenue Other revenues* (Bt bn) (Bt bn) (Bt bn) +1.1% YoY +0.4% QoQ +27% YoY +21% YoY +6.3% QoQ +7.0% QoQ 31.4 31.6 1.3 31.2 1.0 1.2 1.0 1.1 0.9 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 • Driven by postpaid segment and • Expanded subscriber

  19. Slide 19: 1Q19 Cost Breakdown

    1Q19 Cost Breakdown Regulatory fee D&A Network OPEX (Bt bn) % to core service revenue (Bt bn) (Bt bn) +9.5% YoY +35% YoY -4.9% YoY -0.9% QoQ +0.1% QoQ -1.2% QoQ 8.8 8.7 7.4 7.4 1.5 1.4 1.4 7.9 5.5 4.5% 4.2% 4.1% 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 1Q18 4Q18 1Q19 • Regulatory fee to core service • Increase

  20. Slide 20: Mobile: net addition continued positive along with rising data consumption

    Mobile: net addition continued positive along with rising data consumption Subscribers (mn) postpaid prepaid ARPU (Bt/sub/month) postpaid prepaid blended 577 573 561 571 564 529 32.4 32.3 32.6 33.0 33.0 259 254 255 253 246 184 258 184 179 176 174 174 7.6 7.8 8.0 8.2 8.5 1Q18* 2Q18* 3Q18* 4Q18* 1Q19

  21. Slide 21: Mobile price plans: Gearing toward full-speed plans

    Mobile price plans: Gearing toward full-speed plans Postpaid: Full 4G speed Prepaid: The ONE SIM Call all Required Monthly Total internet Throttled Bundle speed networks Enjoy Free Top-up Fee (Bt) (mins) (Bt) 299 1GB 100 150 399 4GB 150 (Voice: 128kbps Bt1.4/sec 499 9GB 200 5GB for 750MB for Unlimit

  22. Slide 22: Mobile market share by subscribers

    Mobile market share by subscribers Total subscriber (mn) 92 96 90 90 92 75 83 83 25% 25% 25% 23% 27% 30% 32% 25% Operator 3 30% 29% 27% 32% 31% 25% 23% 31% Operator 2 45% 46% 46% 46% 45% 45% AIS 44% 43% 2011 2012 2013 2014 2015 * 2016 2017 2018 Postpaid subscriber (mn) Prepaid subscriber (mn) 81 83

  23. Slide 23: AIS Fibre: Competitive price plans targeting pure internet, game and FMC customers

    AIS Fibre: Competitive price plans targeting pure internet, game and FMC customers Home Broadband eSports Power4 MAXX • Basic pure internet pack for • Target gamers by • Offer FMC including fibre broadband, early broadband adopters separating network between mobile data, premium content, and includi

  24. Slide 24: Digital content: More varieties and exclusivities

    Digital content: More varieties and exclusivities Introduced content packages to attract customers with different preferences e.g. sports, family, movies at more affordable prices on both AIS PLAY and AIS PLAYBOX. Mobile PLAY PREMIUM PLAY MOVIES PLAY SERIES PLAY NEWS Access to all HBO, CINEMAX, WARN

  25. Slide 25: Historical profitability and CAPEX trend

    Historical profitability and CAPEX trend Industry AIS EBITDA margin 45% 44% 46% 45% 36% 32% 42% 32% 42% 33% 33% 32% 40% 36% 36%43% 2011 2012 2013 2014 2015 2016 2017 2018 Industry AIS NPAT margin 24% 24% 24% 25% 20% 14%18% 14% 19% 18% 13% 9% 13% 9% 8% 6% 2011 2012 2013 2014 2015 2016 2017 2018 AIS’

  26. Slide 26: Distribution Channel Structure

    Distribution Channel Structure AIS Branded Shop Telewiz: exclusive branded AIS Buddy (run by both AIS and partners) shop by partner 150+ Shops 430+ Shops 1,100+ Shops Exclusive Partner Traditional Channel Electronic Distribution Channel 650+ Shops 19K+ Shops 400K + Points Modern Channel 3,000+ Shops

  27. Slide 27: Contact us

    Contact us IR website: http://investor.ais.co.th Email: investor@ais.co.th Tel: +662 029 5014 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

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