TelecomAsia Corporation Plc

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Analysts Meeting May 22, 2000
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TelecomASIA Today
Group Portfolio
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Major Achievements in 1999 and 1Q-2000

• Complete debt restructuring both TA and
  subsidiaries

• Harvested satisfactory operating and financial
  performance

• Surpassed TOTs market share in terms of BMA
  subscribers

• Launched PCT successfully, surpassing everyones
  expectation

• Advanced in developing innovative broadband
  services

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Eight Key Focuses for Y2000 ( 1 / 8 )
1. Customer Needs Service Quality 1.1 Leader
in Service Quality and Innovations 1.2
Integrated Service Provider for Home, Office,
Mobility 1.3 Customer Care 1.4 Understanding
Customer Needs
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Eight Key Focuses for Y2000 ( 2 / 8 )
2. Financial Performance and Strength 2.1
Strong Balance Sheet 2.2 Continuing Cost
Justification Practice 2.3 Prudent Financial
Planning 2.4 Risk Management (Currency)
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Eight Key Focuses for Y2000 ( 3 / 8 )
3. Technology 3.1 Broadband / High Speed
(ATM,ADSL,Cable Modem) 3.2 Wireless 3.3 IP
Technology 3.4 Subscriber Device (CPE)
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Eight Key Focuses for Y2000 ( 4 / 8 )
4. Core Asset Focus Utilization 4.1 Optic
Fiber Network 4.2 Customer Service System (
e.g. CRM, Billing, etc.) 4.3 Infrastructure
Play (Wholesales Opportunities)
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Eight Key Focuses for Y2000 ( 4 / 8 , Cont. )
Asset Profile

- 2.6M Lines - 1.45M Subscribers (As of End of
April 2000) - 20K Public Phone Boxes - 3,000
Major Corporate Data Circuit Links - ATM ADSL
Network Installing - 160,000 Core Fiber Kilometers
99.9
41.0
90.5
65.0
99.9
10.9

AM

• 330K
• Households
• 150K DSTV
• 150K CATV
• 60 Channels

• 1,000,000 Home
• Pass HFC Network
• (Nation-wide)
• Non-POTS License
• (Nation-wide)
• Cable Modem
• Under Trial

• 1,000 Corporate 20,000 individual customers
• Corporate Market emphasis -1,000 accounts
• 20,000 individual subscribers

• 240K Subscribers
• 106K Waiting List
• (64 Paid)
• 1,000K Capacity
• 700 Building with
• Indoor Cell Sites
• 40,000 Outdoor
• Cell Sites
• 64Kbps Data
• Transmission
• under
• implementation

• Global marine
• fiber optics
• cable
• NASDAQ
• Listed

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Eight Key Focuses for Y2000 ( 4 / 8 )
4. Core Asset Focus Utilization 4.1 Optic
Fiber Network 4.2 Customer Service System (
e.g. CRM, Billing, etc.) 4.3 Infrastructure
Play (Wholesales Opportunities)
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Eight Key Focuses for Y2000 ( 5 / 8 )
5. Internet, e-Commerce, and Content 5.1 Multi
Access Platform 5.2 e-Commerce
e-Entertainment 5.3 Partners Alliances
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Eight Key Focuses for Y2000 ( 6 / 8 )
6. Regulatory Liberalization Opportunity 6.1
Concession Conversion 6.2 Tariff
Structure 6.3 Privatization of State
Enterprises 6.4 Competition vs. Alliance
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Eight Key Focuses for Y2000 ( 7 / 8 )
7. People, System, Culture 7.1 Strategic
Integration 7.2 Management Development 7.3
Enhanced Management Customer Service
System 7.4 Customer is King Culture
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Eight Key Focuses for Y2000 ( 8 / 8 )
8. Enhanced Shareholder Value
8. Enhanced Shareholder Value
8. Enhanced Shareholder Value
8. Enhanced Shareholder Value
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Strategic Positioning 2000 Beyond
1. Be the Dominant Integrated Service Player in
BMA penetrating in Vertical-B2B and
Horizontal-Triple Play market 2. Implement
Nationwide Strategy focusing in Transmission
Backbone, Business Solutions, and Wireless 3.
Capture Internet e-Commerce Business
Opportunities 4. Positioned for Regional Player
and International Connectivity
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Todays Meeting
Outline
Operating Performance
1
Financial Performance
2
Positioning for the Future
3
What You Should Expect
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Operating Performance
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The Present
Customer / Revenue Base (through March 2000)
1Q-2000 / Dec 1999 Growth
1999 / 1998 Growth
March 2000

• Total Connected Lines 1,436,000 35,000
  107,000
• Consumer 1.06 million
• Business 0.37 million
• Data Circuits 2,936 12 37
• Payphones 20,000 19 52
• Internet Customers 20,100 100 150
• Wireless (PCT) 255,036 62,596 82
• CATV Customers 333,395 8,858 8

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Key Operating Statistics
Wireline - Sales Activity
26 Increase
1Q 2000 54,000 1999 Quarterly Average
42,750 1998 Quarterly Average 23,500
82 Increase
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Key Operating Statistics
Wireline - Net Lines Connected
1Q 2000 38,000 1999 Quarterly Average
26,211 1998 Quarterly Average 9,993
45 Increase
162 Increase
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Key Operating Statistics
Wireline - Cumulative Lines Billed

• TAs cumulative lines billed were 1.436 million
  in 1Q-2000
• As of March, TAs market share surpassed TOTs in
  BMA

Sources TelecomASIA and Telephone Organization
of Thailand
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Key Operating Statistics
Wireline - Average Revenue Per Line

• 11 growth y-o-y
• 0.5 growth q-o-q

• RPL dropped in 1998 due to the economic crisis
• Bottom in 1Q-1999

Remark Month-end data
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Key Operating Statistics
Wireline - Call Completion Rate (Originating)

• Major factors for uncompleted calls
• Unanswered call 18.3
• Subscriber busy 16.4

Remark Month-end data
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Key Operating Statistics
Digital Data Network - Cumulative Bandwidth

• 238 growth y-o-y
• 72 growth q-o-q

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Key Operating Statistics
PCT - Subscribers

• 1999/98 growth over 80
• 1Q-2000 subscribers increased 33 over December
  1999
• Currently there are 105,000 subs in waiting lists

255
247
226
192
105
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Key Operating Statistics
Public Phone

• Generating annual revenue of Bt1 billion with
  considerable margins

Month-end data
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Key Operating Statistics
Operating Efficiency
1996 1997 1998 1999 1Q-00 Staff 3,795 4,144 3,649
3,499 3,581 Lines / Staff 229 356 389 399 401 Rev
enue / Staff / Year (mn) 1.9 2.5 2.8 3.2 3.4 Op
Ex / Staff / Year (mn) 0.97 1.04 0.96 1.60 1.50
Revenue / Line / Year (000) 8.6 8.8 7.5 8.0 8.5
OpEx / Line / Year (000) 2.3 3.6 2.7 3.7 3.8

Lines Per Staff TelecomASIA 401 CW
HKT 337 Bell Atlantic 333 Telecom New
Zealand 278 British Telecom 271 TOT 95
Annualized figures
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Financial Performance
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Financial Performance
Consolidated Revenue
33 y-o-y
1Q 2000 Revenue 3,940 1999 Revenue
12,964 1998 Revenue 11,744
10 y-o-y
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Financial Performance
Consolidated Operating Cash Expenses

• Spending SGA to support TAs revenue growth
  initiatives
• SGA 39.5 of revenue

Excluding non-recurring items
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Financial Performance
Consolidated EBITDA
Excluding non-recurring items
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Consolidated Debt
Debt Profile
843 Million
45.5 Billion
24.4 Billion
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TelecomASIA
Debt Profile
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Telecom Holding / Subsidiaries
Debt Profile
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Coverage Ratios
EBITDA / Interest Expenses
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Positioning for the Future
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TelecomASIA Today
Re-Positioned
An Emerging Integrated Carrier Prepared for
Market Liberalization!!
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Integrated Provider Vision
To be a leader in providing innovative packages
of voice, video, data and web-based applications
over a converged, multi-technology platform to
individuals wherever they are
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Revenue Diversification
Consolidated Revenue
1999/1998 Growth 10.4
2000E/1999A Growth 20-25
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Positioning for the Future
An Integrated Provider Focus
Key Theme Leverage revenue cost synergies
across TelecomAsia
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TelecomASIA Today
Leveraging TAs Integrated Provider Platform
Access Gateway Service Layer
TA Network (Simplified)
Fiber or Copper
RCU
xDSL
HFC Network
Coax
Cable Modem
Fiber Node
Cell Site

• Wireless
• PHS
• GSM

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Strategic Growth Initiatives
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Positioning for the Future - Internet
Web-Centric Philosophy
TAs Business Model is Changing!!
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Positioning for the Future - Internet
Internet Opportunity - Evolution in Asia
Australia
Singapore
Japan
India
High awareness, Low adoption
High awareness, High adoption
Hong Kong
China
Thailand
Malaysia
Taiwan
Philippines
South Korea
Indonesia
Low awareness, Low adoption
Low awareness, High adoption
Data Source Goldman Sachs, July 1999
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Positioning for the Future - Internet
Market Situation in Thailand - Future
Internet Forecast
1999 YE

• Thai Internet market consists of
• 250,000 Internet subscribers representing less
  than 1 of population, and
• Approximately 800,000 users
• Industry Analysts forecasts that the number of
  Internet customers is expected to grow at a CAGR
  between 50 to 63
• The Thailand Internet industry is poised for
  significant growth

127K
5.0M
63 CAGR
Source WDR, 28th January 2000
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Positioning for the Future - Internet
Internet Objectives
To rapidly and systematically position
TelecomASIA as the 1 player in the Thai Internet
market in the following areas
Step 1
Step 2
Step 3
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Positioning for the Future - Internet
Access / Portal Strategy
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Positioning for the Future - Internet
CP / Bell Atlantic Support
GENUiTY
CP and Bell Atlantic can provide considerable
support to TAs internet strategy
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Positioning for the Future - Internet
Internet Value Chain for TelecomASIA
The Internet will be a crucial revenue driver for
TelecomASIA
ISP Path
Telco Path
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Positioning for the Future - Corporate
Corporate Market
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Positioning for the Future - Consumer Internet
Consumer Internet Paradigm
TelecomASIA is intent on being the leader in the
consumer internet space
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Positioning for the Future - Internet
Internet Summary

• Reinventing our business model / processes
• Moving to secure a leadership position as an ISP
  / Portal
• Improving Our Transport / Backbone Capabilities
• ATM / IP Platform
• Data Off-Load
• Broadband Access
• High Speed Private Lines
• xDSL
• Cable Modems
• Commerce enabler for others
• B2B
• B2C
• C2C

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Positioning for the Future - Wireless
PCT - A Growth Platform
Planning

• Free Internet access
• Charge at normal PCT rates - time metered
• 32 Kbps data transmission

• Promoting Value Added Services through PCT

• Over 1,000 cell sites installed in high
  population density areas

• Sky Train stations, Toll Way and Express Way
• Another 100 prime building locations

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Positioning for the Future - Wireless
PCT - A Growth Platform
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Positioning for the Future - Wireless
Benefits for TelecomASIA

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Positioning for the Future
FLAG Telecom IPO

• Partial IPO of about 20 of FLAG 31,680,000
  shares
• Shares priced at 24 (Gross), 22.80 (Net)
• Pre-IPO TelecomAsia (TH level) owned 18.1million
  shares (17.1)
• Sold 3.5 million shares
• 84 million realized in gross proceeds, 79.8m in
  net proceeds
• Ownership reduced to 11 or 14.6 million shares
• A natural hedge against dollar debt
• TA/TH remaining FLAG stake valued at
• 14.6 million shares x 14 share 204 million
  (200m - 600m)
• Approximate value of THs Outstanding Debt 395
  million

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Positioning for the Future
Market Liberalization
The Near Future
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What You Should Expect
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What You Should Expect
With the debt restructuring behind us, we will
accelerate our business expansion, meet the
markets challenges, and yield even better
performance this year than we have in the past.
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What You Should Expect
TA Has Tremendous Growth Opportunities
Current
NearTerm
LongTerm

Broadband Access
Nationwide Broadband Backbone Network
Data / Internet
PSTN
VAS
Wireless
Long Distance
TelecomASIA is well-positioned to be an
Integrated Provider
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Financial and Operating Performance
2000 Targets
1999 Growth
2000 Growth
Excluding non-recurring Items
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Analysts Meeting May 22, 2000
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END
Please put all OUT pages behind this page
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Positioning for the Future - Corporate / Data
Corporate / Data Potential
Business includes business access, webhosting,
applications hosting, VPN services
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Positioning for the Future - Wholesale Access
An Enabler Role
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Positioning for the Future - Broadband
Broadband Objectives
To leverage existing HFC network in penetrating
the growing Internet business
UBC subscribers and Internet users in Thailand
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Positioning for the Future - Wireless
One Number Concept - Ability to offer bundled
telecom services
Bundled Telecom Services
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Positioning for the Future - Wireless
PHS in Japan - A Comparison to TelecomASIAs PCT

• Wireless alternative
• Cheap cellular
• One number one handset

• Wireline enhancement
• One Number concept
• Multiple handsets

• 3 PHS providers
• 4 cellular operators

• 1 PCT provider
• Not positioned directly against cellular

• 2 out of 3 are cellular operators
• No fixed line

• Independent from cellular
• Fixed line

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Positioning for the Future - Wireless
Tariff Comparison - Fixed Line, PCT, and Mobile
3,350 3,000 100 3 Baht/Call 3, 6, 9, 12, 15,
18 CATs Rate
800 --- 200 3 Baht First 2 minutes 1.5 Baht
per add. min 3, 8, 12 CATs Rate
1,000 3,000 500 3 Baht/Minute 3, 8, 12 CATs
Rate
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Positioning for the Future - Wireless
Benefits for TelecomASIA
Wireline Enhancement
Wireless Exposure
Returns on Investment

• Leverage TAs fixed line network
• Increase POTS sell-in rate
• Improve call completion
• Lower capital cost of distribution network

• Expose to wireless market for both voice and data
  services
• New Era Wireless
• Right to use radio frequency ranging from
  1895-1918.1 MHz
• Platform for wireless growth

• Existing 255,036 subscribers
• Upside from waiting list of 100,000 and new
  demand
• Access charges from TOTs customers

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Six Key Objectives for Year 2000
1. Improve TAs financial results and enhance
value for our shareholders
2. Strengthen our competitive position ahead of
Thai telecom market liberalization and concession
conversion
3. Aggressively pursue growth and leadership
opportunities related to data, Internet, and
e-commerce
4. Increase market share and usage by developing
product packages that are responsive to our
customers need
5. Leverage cooperation between the existing
assets within the TA Group as well as through
external alliances
6. Enhance operational efficiency and service
quality by benchmarking against world-class
standards
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Corporate Goals
World Class
Liberalization Readiness
Financial

• Customer Services
• Technology Application
• Quality, Efficiency, and Systems

• Service Differentiation
• Customer-Oriented
• Employee Organization Development
• Customers Loyalty
• Market Leader

• Revenue Enhancement
• POTS, VAS, Data, E-Commerce, PCT
• Expense Monitoring
• Cost Justification
• Inventory System
• International Accounting Standard

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Going Forward
Subscribers
TA Net adds
PCT subscribers
Internet users
Revenue
Voice
Wireless
VAS
Data
Operating Expenses

• Continued cost cutting programs
• Continued selling and promotion programs
• Satisfactory EBITDA margins

Expansion
Flexibility in investment in capital expenditure
to support long-term strategy