True Corporation

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Analyst Conference
True Corporation Q1 2006 Analysts
Conference May 22, 2006
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1
Q1 2006 Agenda
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• Supachai Chearavanont
• President and CEO
• Bill Harris
• Chief Financial Officer
• Q1 2006 Highlights
• Business performance True Move, Wireline, UBC
• Financial highlights
• Looking forward
• QA

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7
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First quarter 2006 highlights

• Strong revenue and EBITDA growth
• True Move growth continued
• Consumer Broadband gathered momentum
• UBC acquisition completed
• UBC launched mass market strategy
• Built on integration and quadruple play strategy
• Won TOT Arbitration award

4
Consolidated financial highlights
Q-o-Q
Y-o-Y
(Units in millions of Baht unless otherwise
indicated)
Service Revenue 12,924 25.2 18.5
EBITDA 4,770 24.6 9.6
EBITDA Margin 35.6 22 bps 77 bps
NIOGO -865 390 332
Profit/Loss 498 3,216 352
Free Cash Flow 974 983 708
Capex 2,286 232 789
NIOGO Net income (loss) from ongoing operations
5
Revenue transformation video data growth
Q105 Bt 11,970 mn
Q106 Bt 13,397 mn
Data
Data
Video
Voice
Voice

• Q106 Non-voice contributed 28 of revenue
  compared to 11 in Q105
• Video Data are long-term growth drivers as
  voice becomes commoditized and mobile penetration
  rate inevitably plateaus

Remark Data includes revenues from True Moves
non-voice services and wirelines Internet
Broadband and data services. Video includes UBC
service revenue.
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True Move financial highlights
Service revenue (Bt mn)

• Service revenue up 11.3 Q-on-Q
• Non-voice revenue up 75.7 Y-on-Y, contribution
  up to 8.6 of total service revenue
• EBITDA down 2.8 Q-on-Q EBITDA margin down to
  23.5, partly from rebranding expenses

EBITDA (Bt mn)
Net loss from ongoing operations (Bt mn)
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True Move operational highlights
Net additions and subscribers (000s)

• Q1 net adds up 23 from Q405, well on track to
  achieving FY06 target
• Share in net adds of 24 overall share at 15
  amid unusual competitive environment due to
  anti-SHIN boycott
• Growth through bundling while maintaining best
  value, best buy

ARPU (Bt/mth)
Non-voice subscribers
8
Cellular market price competition
The current cellular market price competition is
different than Q2, 2005

• Q1 2006
• Operator promotions
• Short promotional periods
• Short validity periods for headline price
• Open to new customers only
• ARPU effect
• Smaller impact over shorter period
• True Move ARPU fell 2 from Q405 to Q106 but full
  impact expected Q206.
• Quicker recovery than 05 expected once promotions
  end.

• Q2 2005
• Operator promotions
• Short promotional periods
• Long validity periods (to year-end)
• Open to new existing customers
• ARPU effect
• Deep impact over long period
• True Move ARPU fell 18 from Q105 to Q205 12
  from Q205 to Q305

We believe operators will act more rationally
than in Q205 and the impact on True Move will be
less
9
Wireline highlights

• Service revenue up 5.3 Q-on-Q and 7.9 Y-on-Y
  from Consumer Broadband and Internet
• EBITDA up 17.3, and EBITDA margin up to 45.2,
  Q-on-Q, helped by decreased SGA
• Net loss from ongoing operations fell 49 Q-on-Q
  to Bt 360 mn

Service revenue (Bt mn)
EBITDA (Bt mn)
Net loss from ongoing operations (Bt mn)
Bt mn
10
Consumer Broadband highlights
Subscribers

• Service revenue up 7.9 Q-on-Q, 49.1 Y-on-Y
• Subscribers up 11.5 Q-on-Q, due mainly to
  bundled Wi-Fi package
• IPTV and wireless broadband launched
• Continuing to drive convergence of networks,
  services and content
• True Knowledge Junior Package, a new mass
  market package, will increase subscribers in
  coming quarters
• International Gateway license expected

Net adds (000s)
49
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34
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Revenue and ARPU (Bt mn and Bt/mth)
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UBC highlights

• Service revenue up 5.8 Y-on-Y, but down 3.6
  Q-on-Q due mainly to other service revenue
  relating to Academy Fantasia
• EBITDA and EBITDA margin up
• Free cash flow of Bt 252 mn
• Net adds of 2,221 vs 3,264 in Q105
• ARPU stable at Bt 1,287

Service revenue (Bt mn)
(1)
EBITDA (Bt mn)
Net profit from ongoing operations (Bt mn)
Subscribers
(1) Q106 includes adjustments to be in line with
True Groups accounting policies. The impact is
minimal, thus no retroactive adjustment for
previous quarters.
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UBC growth strategy
Subscribers ARPU

• Strategy
• Grow subscriber base with mass market Knowledge
  package
• Expand subs from 486K (3 of TV households) to
  600K (4) by year-end 2006 and greater in
  subsequent years
• Avoid cannibalization
• All Together Bonus package
• Benefits
• Grows UBC True revenue and cash flow contribution
  to True Group
• Entrenches UBC Trues No.1 position
• Adds pool of mid-income existing mobile users
  to True Move subs base
• Increases household penetration of True Group
  services

2nd highest Pay-TV ARPU in Asia Bt 1,287
Platinum Gold Silver
486,000 (existing)
Bt 495
Knowledge
100,000 (end -2006) First -stage target
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12
Financial Highlights
14
UBC and MKSC consolidation

• True now holds 98.3 of UBC and 99.99 of MKSC
• Consolidation of UBC and MKSC began in Q1, 2006
• UBC contributing to revenue, EBITDA and FCF
• UBCs net debt to EBITDA ratio 3.1x in Q106 -
  improving True groups ratio
• UBC Q106 net profit contribution of Bt 214 mn, or
  Bt 249 mn loss contribution after goodwill
  amortization and interest expense for LBO deal
• Negligible contribution from MKSC

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Goodwill for UBC acquisition
Goodwill amortization expected to end in 2007
when Thai GAAP adopts IAS
Goodwill Calculation
Total purchase value (98.3 ownership in UBC and
100 in MKSC) 12,260 Bt mn UBC and MKSC fair
value (book value) (1,308) Bt mn Total goodwill
10,952 Bt mn Q106 goodwill amortization for
UBC (total Bt 10,561 mn) (1) 170 Bt mn Q106
goodwill amortization for MKSC (total Bt 391
mn) 10 Bt mn Total goodwill charges in Q106
180 Bt mn Goodwill charges in next quarters
(full amortization)
189 Bt mn

• Does not include an additional Bt 95 mn per
  quarter for UBC goodwill amortization for
  pre-acquisition investment until the year 2013

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New segment reporting
Q105

• Previous segments vs new segments
• Previous segments Wireline, Wireless (Mobile
  PCT), DDN, Multimedia, Internet and others
• New segments Pay TV, Wireless (mobile) and
  Wireline (including fixed line telephone, data
  services, Internet/Broadband, PCT and others)
• Segment results changed to stand-alone basis
  (before intersegment eliminations) with GAAP
  adjustments
• Benefits for users
• Simplified segment report, clearer picture of
  each business segments performance
• In line with business operations
• Higher standard of disclosure for non-listed True
  Move and UBC

Wireline
Wireless (True Move, PCT)
Internet
Others
DDN
Multimedia
Q106
Cellular (True Move)
Wireline
UBC
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New segment reporting True Move treatment
True Move Stand-alone (2) New Presentation
True Move Contribution (1) Previous Presentation
(Bt mn)
(Bt mn)
(2) After adjustments to be in line with True
groups accounting policies.
(1) Higher EBITDA in Q106 is due to the higher
intersegment elimination of operating
expenses, caused by top-up card sales through
True Money.
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Improving balance sheets
Wireline Group
EBITDA/Interest coverage
Net debt/EBITDA

Excluding interest expense for UBC refinancing
Consolidated
EBITDA/Interest coverage
Net debt/EBITDA
19
Debt Profile
Continued deleveraging fixed line business
reasonable leverage cellular business
Debt composition (Bt mn)
95,169
93,671
87,270
77,374
73,394
Note Figures do not include debt issuance
costs UBC debt includes bridging loan for UBC
acquisition
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Looking Forward
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Regulatory progress

• Arbitration award
• Interconnection
• International Gateway license
• Foreign ownership dominance
• Consumer protection
• Competition framework
• Number portability

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Outlook for 2006

• Bundling promotions continue to grow True Move
• True Move on track to achieve year-end subs
  target despite
• price competition
• Broadband growth to accelerate from mass market
  campaign
• Expanding UBC with Knowledge package
• Leveraging UBCs rich content
• Positive regulatory developments
• Maintaining market leadership in convergence and
  lifestyle

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QA
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Thank you
True internet co.,ltd Present by xxxxxx xxxxxx
Date dd/mm/yy
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Safe Harbor Statement
This presentation contains statements about
expected future events and financial results that
are forward-looking and subject to risks and
uncertainties. For these 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.
QA
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Appendix
Slides () 1. Normalized Q1, 2006 results
(Consolidated) 26 2. Normalized Q1, 2006 results
(Stand Alone) 27 3. Normalized Q1, 2006 results
(True Move) 28 4. Normalized Q1, 2006 results
(Wireline Group) 29 5. Normalized Q1, 2006
results (UBC) 30 6. Normalized Q1, 2006 results
(All Businesses) 31 7. Normalized consolidated
revenue (after eliminations) 32 8. Normalized
consolidated revenue (before eliminations) 33 9.
Normalized consolidated expense (before
eliminations) 34 9. Balance sheet 35 10. Cash
flow statement 36 11. Fixed line
business 37 12. WE PCT 38 13. DDN 39
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Normalized Q1, 2006 Results (Consolidated)
1Q06 4Q05 1Q05 QoQ YoY Revenue
13,397 10,818 11,970 23.8 11.9 Revenue from
services 12,924 10,321 10,908 25.2 18.5 Reve
nue from product sales 473 496 1,062 -4.8 -55.5
Cost of providing services 8,863 7,538 7,523 17.6
17.8 Revenue sharing 2,769 2,406 2,719 15.1
1.9 Network operating expense 3,079 1,991 1,73
9 54.6 77.0 Depreciation and
amortization 3,015 3,141 3,064 -4.0 -1.6 Cost
of sales 431 424 963 1.7 -55.3 SGA 3,315 2,704
2,839 22.6 16.7 Total operating
expenses 12,609 10,666 11,325 18.2 11.3 EBITDA
4,770 3,829 4,354 24.6 9.6 Depreciation and
amortization (3,982) (3,677) (3,709)
8.3 7.4 EBIT 788 152 645 419.5
22.1 Interest expense - net (1,384) (1,192) (1
,184) 16.1 16.9 Tax (259) (34) (40)
666.1 545.4 Income (loss) from ongoing
operations (855) (1,074) (579) 20.4 -47.7 Sha
re of results from subsidiaries (10) (181) 46
94.4 NM Net income (loss) from ongoing
operations (865) (1,255) (533) 31.1 -62.4 Non
recurring items Minority interest
1,363 (1,463) 679 NM 100.8 Gain (loss) on
foreign exchange 1,263 119 142 963.0
791.2 Adjustment-International Call
- (442) 68 100.0 -100.0 Capitalized
interest expense - 135 (22) -100.0
100.0 Gain (loss) from DPN buyback - - 370 NM -
100.0 Loss on impairment of network assets
- (2,040) - 100.0 NM Gain (loss) from
debt restructuring - 801 - -100.0 -54.6 Other
(expense) income 125 (49) 105 NM 18.8
Minority interest (24) 13 16 NM NM Net profit
(loss) 498 (2,718) 146 NM 241.2 EBITDA
Margin 35.6 35.4 36.4 22 bps -77 bps
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Normalized Q1, 2006 Results (Stand-alone)
1Q06 4Q05 1Q05 QoQ YoY Revenue
4,743 4,799 4,965 -1.2 -4.5 Revenue from
services 4,622 4,674 4,807 -1.1 -3.8 Revenue
from product sales 121 125 158 -3.1 -23.7 Cost
of providing services 3,137 3,299 3,302 -4.9 -5.0
Revenue sharing 983 1,009 1,046 -2.5 -6.0 Ne
twork operating expense 654 732 646 -10.7 1.2
Depreciation and amortization 1,500 1,558 1,610 -3
.8 -6.8 Cost of sales 110 115 151 -3.6 -26.7 S
GA 928 1,103 953 -15.9 -2.6 Total operating
expenses 4,175 4,517 4,391 -7.6 -5.2 EBITDA 2,17
0 1,922 2,266 12.9 -4.2 Depreciation and
amortization (1,602) (1,640) (1,705)
-2.3 -6.1 EBIT 568 282 560 101.5
1.4 Interest expense - net (553) (578) (600) -
4.3 -7.9 Tax (106) - - NM NM Income
(loss) from ongoing operations (90) (296) (40)
69.4 -126.8 Share of results from
subsidiaries 356 (771) (411) NM NM Net income
(loss) from ongoing operations 266 (1,067) (451)
NM NM Non recurring items Minority interest
233 (1,651) 597 NM -61.0 Gain (loss) on
foreign exchange 214 164 137 30.0
55.6 Adjustment-International Call
- (442) 68 100.0 -100.0 Gain (loss) from
DPN buyback - - 370 NM -100.0 Loss on
impairment of network assets - (2,040) -
100.0 NM Gain (loss) from debt
restructuring - 801 - -100.0 NM Other
(expense) income 19 (135) 21 NM -9.0
Minority interest - - - NM NM Net profit
(loss) 498 (2,718) 146 NM 241.2 EBITDA
Margin 45.7 40.0 45.6 570 bps 12 bps
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Normalized Q1, 2006 Results (True Move Before
Eliminations)
1Q06 4Q05 1Q05 QoQ YoY FY05 FY04 FY0
3 Revenue 5,991 5,387 6,299 11.2 -4.9 21,775
15,957 11,600 Revenue from services 5,568 5,003 5
,387 11.3 3.4 19,594 13,133 10,166 Revenue
from product sales 422 384 911 9.9 -53.7 2,181
2,823 1,434 Cost of providing services 4,168 3,755
3,705 11.0 12.5 14,507 10,904 9,353 Revenue
sharing 1,916 1,641 1,919 16.8 -0.2 6,740 5,266
4,050 Network operating expense 1,280 1,127 824
13.7 55.4 3,857 2,371 2,384 Depreciation and
amortization 971 988 962 -1.7 1.0 3,911 3,268 2
,919 Cost of sales 356 331 790 7.5 -54.9 1,955
2,469 1,453 SGA 1,464 1,298 1,614 12.8 -9.2 5,
987 5,230 6,067 Total operating
expenses 5,988 5,384 6,108 11.2 -2.0 22,449 18,
603 16,874 EBITDA 1,407 1,447 1,611 -2.8 -12.6
5,095 2,351 (732) Depreciation and
Amortization (1,405) (1,445) (1,420)
-2.8 -1.1 (5,769) (4,998) 4,542 EBIT 2 2 191 -1
.7 -98.8 (674) (2,647) (5,274) Interest
expense - net (546) (536) (517) -1.9 -5.7 (2,051
) (1,753) (1,508) Tax - - - NM
NM - - - Income (loss) from ongoing
operations (544) (534) (326) -1.9 -66.8 (2,725)
(4,400) (6,783) Share of results from
subsidiaries - - - NM NM - - - Net income
(loss) from ongoing operations (544) (534) (326)
-1.9 -66.8 (2,725) (4,400) (6,783) Non
recurring items Minority interest
202 198 103 2.3 96.6 611 14 146 Gain
(loss) on foreign exchange 211 100 109 112.5
93.9 114 (53) (30) Adjustment-International
Call - - - NM NM - - - Capitalized interest
expense - 135 (22) -100.0 100.0 - - -
Impact from change in calculation method for
True Moves regulatory cost - - - NM
NM 493 - - Other (expense) income (9) (37) 16
75.2 NM 4 62 173 Minority interest
- - - NM NM - 5 3 Net profit
(loss) (342) (336) (223) -1.7
-53.0 (2,114) (4,385) (6,637) EBITDA
Margin 23.5 26.9 25.6 -338 bps -208
bps 23.4 14.7 -6.3
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Normalized Q1, 2006 Results (Wireline Group
Before eliminations)
1Q06 4Q05 1Q05 QoQ YoY Revenue
6,282 6,062 5,859 3.6 7.2 Revenue from
services 6,147 5,839 5,694 5.3 7.9 Revenue
from product sales 136 223 165 -39.2 -17.7 Cost
of providing services 4,065 4,278 4,029 -5.0 0.9
Revenue sharing 737 766 799
-3.7 -7.8 Network operating expense 1,359 1,337
1,104 1.7 23.1 Depreciation and
amortization 1,968 2,176 2,126 -9.6 -7.4 Cost
of sales 126 198 153 -36.3 -17.3 SGA 1,543 1,45
4 1,138 6.1 35.6 Total operating
expenses 5,734 5,931 5,320 -3.3 7.8 EBITDA 2,84
1 2,421 2,752 17.3 3.2 Depreciation and
amortization (2,293) (2,290) (2,213)
0.1 3.6 EBIT 548 131 539 318.3
1.6 Interest expense - net (797) (661) (667)
20.6 19.5 Tax (181) (34) (40) 435.8
351.3 Income (loss) from ongoing
operations (430) (564) (168) 23.7 -156.0 Shar
e of results from subsidiaries 70 (143) (49)
NM NM Net income (loss) from ongoing
operations (360) (706) (217) 49.0
-66.1 Non recurring items Minority interest
911 (1,616) 671 NM 35.9 Gain (loss) on
foreign exchange 809 88 137 820.4
492.0 Adjustment-International Call
- (442) 68 100.0 -100.0 Gain (loss) from
DPN buyback - - 370 NM -100.0 Loss on
impairment of network assets - (2,040) -
100.0 NM Gain (loss) from debt
restructuring - 801 - -100.0 NM Others
(expense) income 119 (2) 93 NM 27.6 Minority
interest (16) (21) 2 22.5 NM Net profit
(loss) 551 (2,322) 454 NM 21.4 EBITDA
Margin 45.2 39.9 47.0 528 bps -175 bps
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Normalized Q1, 2006 Results (UBC Before
Eliminations)
1Q06 4Q05 1Q05 QoQ YoY Revenue
2,025 2,116 1,916 -4.3 5.7 Revenue from
services 2,016 2,092 1,905 -3.6 5.8 Revenue
from product sales 9 25 11 -62.4 -14.4 Cost of
providing services 1,310 1,467 1,265 -10.7 3.6
Revenue sharing 115 115 108 - 6.5 Network
operating expense 1,092 1,217 1,028 -10.3 6.2
Depreciation and amortization 103
135 129 -23.7 -20.2 Cost of sales 3 15 5 -80.3
-44.8 SGA 361 364 457 -0.8 -21.0 Total
operating expenses 1,674 1,846 1,727 -9.3 -3.1 E
BITDA 535 467 397 14.4 34.7 Depreciation and
Amortization (183) (197) (209) -7.1 -12.2 EBIT 3
51 270 188 30.1 86.8 Interest expense -
net (118) (53) (66) 122.6 78.8 Tax (78) (49)
- 57.8 NM Income (loss) from ongoing
operations 233 168 122 38.7 91.5 Share of
results from subsidiaries - - - NM NM Net income
(loss) from ongoing operations 233
168 122 38.7 91.5 Non recurring items
Minority interest (19) (276) 25 -93.1 NM
Gain (loss) on foreign exchange (30) - - NM NM Ot
her (expense) income 19 (271) 28 NM -33.9
Minority interest (7) (5) (3) -36.9 -97.7 Net
profit (loss) 214 (108) 146 NM 46.4 EBITDA
Margin 26.4 22.1 20.7 431.5 bps 568.1 bps
Remark Q106 includes adjustments to be in line
with True Groups accounting policies. The impact
is minimal, thus no retroactive adjustment for
previous quarters.
32
Normalized Q1, 2006 Results (All Businesses)
Pay TV Wireless Wireline Elimination Cons
olidate Revenue 2,025 5,991 6,282 (902) 13,397
Revenue from services 2,016 5,568 6,147 (807) 12,9
24 Revenue from product sales 9 422 136 (95) 473
Cost of providing services 1,310 4,168 4,065 (679
) 8,863 Revenue sharing 115 1,916 737 - 2,769 Ne
twork operating expense 1,092 1,280 1,359 (653) 3,
079 Depreciation and amortization 103 971 1,968 (
26) 3,015 Cost of sales 3 356 126 (54) 431 SGA 36
1 1,464 1,543 (54) 3,315 Total operating
expenses 1,674 5,988 5,734 (788) 12,609 EBITDA 535
1,407 2,841 (13) 4,770 Depreciation and
Amortization (183) (1,405) (2,293) (101) (3,982) E
BIT 351 2 548 114 788 Interest expense -
net (118) (546) (797) - (1,384) Tax (78) - (181)
- (259) Income (loss) from ongoing
operations 233 (544) (430) (114) (855) Share of
results from subsidiaries - - 70 (80) (10) Net
income (loss) from ongoing operations 233 (544) (3
60) (194) (865) Non recurring items Minority
interest 19 202 911 269 1,363 Gain (loss)
on foreign exchange (30) 211 809 273 1,263 Other
(expense) income 19 (9) 119 (4) 125 Minority
interest (7) - (16) (1) (24) Net profit
(loss) 214 (342) 551 75 498 EBITDA
Margin 26.4 23.5 45.2 35.6
33
Normalized consolidated revenue (After
Eliminations)
34
Normalized consolidated revenue (Before
Eliminations)
35
Normalized consolidated operating expenses
36
Balance sheets
37
Cash flow statement
38
Fixed line business

• Q1 fixed line revenue down 2.1 Q-on-Q with ARPU
  decline (4.3)
• Subscriber loss fell
• Maintains market leadership in BMA

Revenue ARPU Basic Fixed Line
Fixed Line Subscribers
(7)
(0.3)
51
5
(11)
Remark 1Q05 3Q05 Basic fixed line revenue were
retroactively adjusted to reflect a normalize
over accrued international call revenue
39
WE PCT

• Service revenue increased 2.6 Q-on-Q on ARPU
  rise (1.9)
• Subscriber base declined slightly at 468,314 due
  to price competition within mobile business

Service Revenue ARPU WE PCT
WE PCT Subscribers
(1)
(12)
16
(5)
(3)
40
DDN services

• 1Q06 revenue increased 9.6 Q-on-Q
• Circuits additions of 119 circuits, a decline
  from Q405 due mainly to most new subscribers
  subscribed to high bandwidth circuits
• ARPU up 12 Y-on-Y and 2 Q-on-Q to Bt 11,097

DDN Circuits
Revenue ARPU DDN
146
267
532
270
119