3Q 2002 Investor Presentation November 20, 2002

1
3Q 2002Investor Presentation November 20, 2002
2
Agenda

• TA operational highlights and achievements
• Financial highlights successful bond offering
• TA Orange
• Strategic issues
• QA

3
Performance TA standalone - YTD
EBITDA
Unit THB millions
14 Growth
Revenue
Expense
5 Growth
9 Growth
7,340
15,292
6,415
7,953
13,997
7,582
4
Performance TA conso. - YTD (Excl. BITCO)
EBITDA
Unit THB millions
20 Growth
Expense
Revenue
9,072
9 Growth
14 Growth
17,354
7,582
15,211
8,281
7,630
5
Performance TA conso. - YTD (Incl. BITCO)
EBITDA
Unit THB millions
-3 Growth
Expense
Revenue
49 Growth
23 Growth
18,728
7,582
7,358
11,369
15,211
7,630
Source TA Financial System
6
Performance subscriber growth
PCT
POTS
15 Growth
1,968,857
29 Growth
632,630
1,714,246
490,055
DDN
Internet
UBC
248,136
56 Growth
9 Growth
60 Growth
423,986
6,773
389,685
154,785
4,320
Including 250 circuits which have not yet
been billed due to incomplete billing process
7
Performance revenue growth
Normalized figures
8
Key corporate performance

• Happy Customer Index 88.5 87.0
• Complaints per 1,000 bills 32
  15
• Churn Rate 5.5 7.2
• Net Connect (K lines) 182
  214
• Fault Rate 1.4 1.2
• Fault Clear (within 24 hours) 99.4
  99.8
• Call Completion 61.5 64.1
• Productivity (EBITDA/employee) 1.6 MB
  1.8 MB

Jan-Sep 01
Jan-Sep 02
Items
9
Achievements to date

• Completed debenture offering and rights
• Launched new service
• business broadband solution
• TA Orange subscriber surpassed 1 million
• AMDOCS system implemented
• Adopted TA Code of Conduct for staff
• Won Corporate Governance and Disclosure Awards

10
Agenda

• TA operational highlights and achievements
• Financial highlights successful bond offering
• TA Orange
• Strategic issues
• QA

11
9M02 income statement summary
Excluding BITCO
Normalized figures
12
3Q02 income statement summary
Excluding BITCO
Normalized figures
13
Strong growth in EBITDA and EBITDA margin
Quarterly consolidated EBITDA

• 3Q02/3Q01 consolidated EBITDA growth
• With BITCO -6
• Without BITCO 17
• Key components of 3Q02/3Q01 EBITDA growth
  (without BITCO)
• revenue growth of 12
• EBITDA margin 190 bps to 51.1
• 9M02/9M01 consolidated EBITDA growth
• With BITCO -3
• Without BITCO 20

Quarterly consolidated EBITDA margin
54
53
52
51
49
49
46
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
14
Core wireline and data businesses continued to
make profits
Normalized net income (loss) from ongoing
operations - excl. share of gain (loss) in
subsidiaries and affiliates non recurring items
(on stand-alone basis)
THB millions
15
Balance Sheet substantially improved in October
2002

• Completed debenture offering and IFC C - Loan, to
  repay 85 of USD debt
• Current USD exposure is US78 mn
• Completed rights offering, raising THB3 bn in
  proceeds to increase investment in TA Orange to
  44 from 41
• The rights offering doubled equity base to
  approximately THB6 bn
• Completed first phase of debt restructuring of
  TH subsidiaries in September 2002
• Prepayment of loans over THB1 bn to creditors
• Total prepayment of loans in 2002 YTD was
  THB1,584 mn

16
Transformed Balance Sheet and Cash Flows
Key financial ratios (excluding TA Orange)
Net Debt/ EBITDA
EBITDA/ interest coverage
US Dollar exposure
Cash flow from operations
USD Mn
THB Mn
78
Annualized
17
Successful bond offering

• Successfully placed THB18.5 bn in new debentures
• Tranche 1 of THB11.7 bn
• the second largest BBB or lower debentures this
  year was THB3.5 bn
• Tranche 2 (IFC partial guaranteed debentures) of
  THB6.75 bn
• the first Thai debenture with a third party
  partial guarantee
• sold out THB6.75 bn the first day
• Combined tranches were
• the largest telecom debentures ever in Thailand
• the largest rated debentures ever in Thailand
• US exposure reduced by 85

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Agenda

• TA operational highlights and achievements
• Financial highlights successful bond offering
• TA Orange
• Strategic issues
• QA

19
TA Orange launch momentum maintained

• 874,000 subscribers end September 2002, currently
  1.1m active subscribers
• Fastest ever GSM network to 1.0 million
  subscribers
• 52 postpaid, 48 prepaid (as at end Q3 2002)
• High quality network
• 100 network coverage BMA, 75 national coverage
• On target for 90 population coverage by year-end
• Enthusiastic reception for the Orange brand
• Brand awareness 93
• 65 of customers rate after sales service
  excellent or good
• Real product innovation
• Thai SMS II (Nov 15th)
• Per second billing

20
Large growth potential remains in the Thai market

• The Thai mobile market will continue to expand,
  driven by increased competition, improving
  network coverage and quality, and more innovative
  products
• Mobile penetration rates will double exceeding
  50 by end 2005
• New non-voice data revenue streams look set to
  explode driven by SMS/EMS

Sources World Bank, Deutsche Bank, ING, Asiacom
21
The competitive dynamics are changing

• SIMs and handsets increasingly bought separately
• Overall churn will increase as consumers can use
  any SIM with any handset
• More than 70 of growth in 2003 will be from UPC
• Prepaid will continue to dominate

22
TA Orange strategy

• Attracting and retaining the highest value
  customers
• Best quality network
• Best customer service
• Innovative products
• Best value
• Targeted offers
• Leveraging the Orange brand brand values
• Distinctive positioning and communications
• Award-winning execution
• Unique team culture
• Maintain competitive cost structures
• Exploit cost synergies with CP and TA
• Exploit cost synergies with Orange SA

23
TA Oranges active subscriber base continues to
grow
Subscriber development

• TA Oranges market share of net adds in Bangkok
  estimated at 20 in Q3
• TA Oranges cumulative market share 6

Thousands
24
Growth driven by continued improvements in
coverage

• Still on target for 90 GDP population coverage
  by December 2002.

25
Approximately 50 now coming from UPC
Activations by region

26
Average Revenue per User continues to improve
85 growth in Q3
10 growth in Q3
Re-based to 100 in June-02
27
Blended ARPUs - maintaining value share in Q3
Monthly ARPU
THB
Orange AIS ARPU monthly , DTAC 3Q estimated
28
TA Orange has retained its postpaid customers

• Postpaid churn Q3 (monthly est)
• Market postpaid 6.0
• Market prepaid 0.9
• Orange (underlying)
• Postpaid 4.8
• Prepaid 1.0

excludes suspended and disconnected accounts
29
Acquisition costs in rapid decline

• SACs rapidly declining
• SACs down 87 since April driven by growth in
  SIM-only sales

30
SIM-only a huge opportunity for TA Orange

• No SACs means reduced risks, improved cashflows
  and immediate payback
• Increased opportunity to sell to 15m existing AIS
  DTAC users who already own a handset

31
Ideally positioned

• to become the leading wirefreeTM operator in the
  Thai market
• best network
• best customer service
• internationally proven brand brand values
• proven innovation skills
• complementary partner strengths

32
the futures bright, the futures Orange
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Agenda

• TA operational highlights and achievements
• Financial highlights successful bond offering
• TA Orange
• Strategic issues
• QA

34
Key concerns

• POTS and PCT ARPU
• PCT subscriber base
• Fair regulatory regime

35
ARPU for wireline and PCT expected to level off
as mobile penetration in BMA reaching its peak
With BMA mobile penetration rate decelerating,TA
POTS and PCT ARPU should begin to stabilize
Mobile Penetration Rate in BMA
Baht/Mth/Sub
800
100
90
700
POTS ARPU
80
600
70
PCT ARPU
500
60
400
50
40
300
30
200
Projection
20
Mobile Penetration in BMA
100
10
0
0
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Source Merrill Lynch, Billed Revenue TA, CSN
market survey (July 2001),Customer Satisfaction
Survey (April 2002).
36
PCT subscriber base
PCT subscribers decreased in 3Q02 due mainly to
the termination of free handset promotions and
focus on high-ARPU customers
Thousand Customers
644
670
633
627
490
453
431
393
364
274
255
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Agenda

• TA operational highlights and achievements
• Financial highlights successful bond offering
• TA Orange
• Strategic issues
• QA

38
3Q 2002Investor Presentation November 20, 2002
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Safe Harbor Statement
This presentation contains statement about
expected future events and financial results that
are forward-looking and subject to risks and
uncertainties. For those statements, we claim the
protection of the safe harbor for forward-looking
statements contained in the Private Securities
Litigation Reform Act of 1995 Discussion of
factors that may affect future results is
contained in our recent filings with the
Securities and Exchange Commission.