JD Pres

1
Moving Forward Discussion with Analysts Bangkok 16
th November 2000
2
Third Quarter 2000 Results
Outline

• 2000YTD Achievements Supachai Chearavanont
• and 2001 Expectations
• Operating Performance Vichaow Rakpongpairoj
• Financial Strategic Update John Doherty

3
2000YTD Achievements
Highlights
?

• Strong financial and operating performance

?

• Investing in high-growth services Data and VAS

?

• Positioning for future with CRM system

?

• Passed TOT market share in BMA in 1Q2000

?

• Successful PCT launch, wireless positioning

?

• Moved to IAS improving transparency /
  comparability

?

• Reinventing internet business with .com

?

• Completed debt restructuring for TA and
  subsidiaries

4
2000 YTD Achievements
Strong Financial Performance
Revenue 2000YTD vs. 1999YTD (M)
Revenue 3Q2000 vs 3Q1999 (M)
37 Growth
51 Growth
EBITDA 2000YTD vs. 1999YTD (M)
EBITDA 3Q2000 vs 3Q1999 (M)
27 Growth
25 Growth
5
2000 YTD Achievements
Strong Customer Growth
Wireline Customers (000s)
PCT Customers
10 Growth
247 Growth
Data Network (Circuits)
Internet Customers
79 Growth
226 Growth
6
2001 Expectations
Strategic Positioning 2001 Beyond
Thai Telecoms Market Revenue
Baht million
Source PwC analysis
We estimate that TA will need to capture 20
market share of the total telecoms market revenue
in 2005.
7
2001 Expectations
Strategic Positioning 2001 Beyond

• Bangkok Metropolitan Area (BMA)
• Broadband backbone and corporate solutions
• Wireless
• Data, initially with PCT _at_ 32Kb/s point-to-point
• Internet / Applications / Content

Market Liberalization
8
2001 Expectations
Strategic Priority Checklist

• Strengthen financial position

• Sustain revenue growth at 20 and EBITDA growth
  at 25

• Strategic integration competency enhancement

• Market/Customer-driven / Business-focused

• Products services bundling and innovation

• Customer care leadership

• Trusted strong brand

• IT applications

• Enhance customer-focused rewarding innovation
  culture

• Manage through liberalization process that
  satisfies most stakeholders

• Pursue aggregate internet access,
  e-application, and content

9
Operating Highlights
10
Operating Performance
Overview
?

• Targeted marketing, promotional, and branding
  activities

?

• Segmentation, cherry-pick, and MSP

?

• Emphasized on high-bandwidth, high margin data
  services

?

• First-class customer services billing -- 4th
  phase

• Preventive network outage reduction program

?
?

• Engaged PwC to conduct strategic review
  integration

?

• Movement towards pay-for-performance

?

• Narrowband to broadband ADSL

11
Operating Performance
Customer / Revenue Base (thru September 2000)
12
Operating Performance
Wireline Sales Activity Core Growth
30
59
13
Operating Performance
Wireline Net Additions Core Growth
30
59
14
Operating Performance
Wireline - Cumulative Lines Billed

• TAs cumulative lines billed were 1,494 million
  in 3Q-2000
• As of March, TAs market share surpassed TOTs in
  BMA

E
Customers (000)
Sources TelecomASIA and Telephone Organization
of Thailand
15
Operating Performance
Wireline Average Revenue Per Line
16
Operating Performance
Wireline - Call Completion Rate (Originating)
Remark Month-end data
17
Operating Performance
Digital Data Network Cumulative Bandwidth

• 220 growth y-o-y
• 17 growth q-o-q

Significant growth in data
Thousand Kbps
18
Operating Performance
PCT - Customers

• 1999/98 growth over 80
• YTD customers increased 90 over Dec 99
• 2000EOY Target gt 400,000 customers

330
312
274
255
255
255
247
226
192
Thousand Customers
19
Operating Performance
Public Phone
Generating annual revenue of Bt1 billion with
solid margins
Million Baht
Month-end data
20
Operating Performance
Efficiency Measures
1996 1997 1998 1999 1Q-00 2Q-00 3Q-00 Staff 3,7
95 4,144 3,649 3,499 3,581 3,773 3,877 Lines /
Staff 229 356 389 399 401 401 385 Revenue
/ Staff / Year (mn) 1.9 2.5 2.8 3.2 3.4 3.4 3.4
(Post Revenue Sharing )
Lines Per Staff TelecomASIA 385 CW
HKT 337 Bell Atlantic 333 Telecom New
Zealand 278 British Telecom 271 TOT 112
Annualized figures
21
Financial and Strategic Update
22
Financial and Strategic Update
What We Told You Over A Year Ago
?

• Grow revenues by 20 to 25, EBITDA by 25 to 30

?

• Diversify mix / increase focus on corporate market

?

• Committed to wireless revenue growth

?

• Increase market share and customer share (ARPU)

?

• Leverage existing investment, Improve ROIC

?

• Building a sustainable platform for growth,
  Expenses

?

• Reduce F/X exposure, Improve financial integrity
  overall

?

• Strategic focus on corporate, broadband data

23
Financial and Strategic Update
Financial Summary - YoY Growth (Consolidated)
24
Financial and Strategic Update
Revenue Diversification (Consolidated Total
Revenue)
1998
1999
9M 2000
Wireless
VAS Other
Wireless
VAS Other
6
BB, Data Internet
10
16
BB, Data Internet
VAS Other
9
11
9
9
Voice
68
7
BB, Data Internet
1999/1998 Growth 10.4
2000/1999E Growth Over 30
Baht 14.3 Billion
25
Financial and Strategic Update
Revenue Diversification (Consolidated Total
Revenue)
9M2000 9M1999 Change Wireline-Voice 9,661 8,372
15 Wireless (PCT) 2,284 1 2,283 BB,
Internet 728 725 - Data 244 139 76 VAS 1,201 768 5
6 Other 194 424 -
26
Financial and Strategic Update
1998
1999
3Q2000
Business
Business
Business
Consumer
Consumer
47
46
51
Consumer
27
Financial and Strategic Update
ROIC / ARPU Wireline PCT

• ARPU up 37 since 1Q1999
• Minimal investment
• ROIC improvement of 464

Baht / Customer / Month

• ARPU dropped in 1998 due to the economic crisis
• Low point in 1Q-1999

• 7 growth y-o-y
• 3 growth q-o-q

Remark Month-end data
28
Financial and Strategic Update
Operating Expenses - YoY Growth (Consolidated)
9M99 9M00 Diff Change As Reported 9,500 12,875
3,375 36 Less Revenue Sharing 1,513 2,133 620 4
1 Less Depreciation 4,487 5,580 1,093 24
Less Cost of Sales 123 891 768 624 Core
Operating Expenses 3,377 4,271 894 26 Personn
el Expenses 715 969 254 36 Network
Expenses 1,414 1,709 451 21 Remaining Operating
Expenses 1,248 1,593 345 28
Cost Control Remains a Priority
29
Financial and Strategic Update
EBITDA / EBITDA Margin
9M99 9M00 Diff Change Revenue 10,429 14,312 3,8
83 37 EBITDA 5,659 7,158 1,499 26 EBITDA Margin
() 54.3 50.0 (430bp) - EBITDA Margin Pressure
(Approximate Basis Points) Cost of Sales (PCT
handsets) 1000bp Revenue Share (16.3 to
17.2) 100bp Core OpEx (growth at 20 vs.
26) 150bp - Personnel Expenses
(Flat) 170bp - Network Expenses (Flat) 200bp
Growth with disciplined expense control
30
Financial and Strategic Update
Financial Plan
31
Financial and Strategic Update
Balance Sheet Improving
EBITDA/Interest Coverage
Million Baht
EBITDA Growth results in

• Interest coverage improves to 1.72x
• Over Bt 3 billion in cash reserves
• Improving Debt/EBITDA, still high
• Local debt market opportunity
• Work-In-Progress

Debt/EBITDA
Million Baht
32
Financial and Strategic Update
Consolidated Debt Profile - Financial
Considerations
801
X
841 Million
45.8 Billion
24.3 Billion
US
Baht
(250500 Million) Libor100 to 175bp
Add 10 20 Billion 100 bp reduction
33
Financial and Strategic Update
Monetization - 1.5 M FLAG Shares
Pledges 1.5 M. FLAG share
September 2000
KIN
CSFBI
Total proceeds Over 17 million 1.5m shares
11.55 (avg. price
Net Proceeds 81.6 of (Avg. Trade Price) x (
of Shares), interest plus fees
Deliver Cash Settlement
October 2003
Yes
Exercise Cash Settlement
KIN
CSFBI
No
Deliver 1.5 Million FLAG
If KIN exercise cash settlement
Pledge Release
Telecom Holdings(K.I.N.) retains right to 100 of
120 appreciation and 16.67 thereafter
34
Financial and Strategic Update - Internet
Internet Value Chain for TA Bricks Clicks
The Internet will be a crucial revenue driver for
TelecomAsia
ISP Revenue Sources
ISP Path
TA Revenue Sources
Telco Path
Wholesale / Transport
Hosting / ASP
Access BB / NB
35
Financial and Strategic Update - Internet
Objectives

• Make the Internet more available to Thai Business
  and Consumer markets change the model
• Grow the market Added over 25,000 customers in
  6 weeks
• Create immediate access and transport revenue for
  TA
• Use as a platform to leverage broader Internet /
  Web opportunities
• Commerce
• Advertising
• Hosting
• Develop our customer relationships further

36
Financial and Strategic Update - Data / Internet
Broadband Access
37
Financial and Strategic Update Data / Internet
Broadband Access

• DSL will cover 40 of Corporate 20 of consumer
  footprint by 2000YE
• Monthly Pricing
• Corporate 5,000 - 15,000 Baht
• Consumer 500 - 1,000 Baht
• 80 of addressable market by 1H2001
• Vendors are
• NorTel
• Nokia
• ECI
• Cable Modems available by 1Q2000
• Over 2 million homes passed in Bangkok

38
Financial and Strategic Update Corporate Data
Corporate Market
39
Financial and Strategic Update Corporate Data
Corporate Market

• Core revenue growth from
• Increased usage
• Second line penetration
• Data transport services
• Data Centers TA well suited
• 24-hour security
• Air conditioning
• Maintenance and restoration
• Uninterrupted power
• Disaster protection and fire proofing
• Broadband backbone connections
• Data and Internet site performance monitoring
• Internet hotels profitable at 35
• TA in strong competitive position

Data Center
Internet
Core Business Value Growth 30
Enhancements Around Core
40
Moving Forward Discussion with Analysts Bangkok 16
th November 2000