dtac second quarter 2009...investor relations: e-mail: [email protected] tel: 662 202 8882 8 410 382 398...

dtac

second quarter 2009

22 July 2009

Investor Relations: www.dtac.co.th

E-mail: [email protected]

Tel: 662 202 8882

2

Disclaimer

Certain forward looking statements may be made in the course of the presentation.

These forward- looking statements generally can be identified by use of

statements that include words or phrases such as DTAC or its management

“believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words

or phrases of similar import. Similarly, statements that describe DTAC’s objectives,

plans or goals also are forward-looking statements. All such forward-looking

statements are subject to certain risks and uncertainties that could cause actual

results to differ materially from those contemplated by the relevant forward-

looking statement. The forward-looking statements contained in the slides are not

and should not be constructed as representations of the future performance of

DTAC and that such statements are an expression of the Company’s reviews based

on its current view and certain assumptions including, but not limited to, prevailing

economic and market conditions and currently available information.



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3

summary of second quarter

• The market was under pressure from the weak economy, domestic political

uncertainty, as well as the recent outbreak of the type-A (H1N1) flu.

• Subscriber growth further slowed down.

• Excluding international business and IC, service revenues held up quite well

despite second quarter being seasonally low.

• Despite cost improvements, EBITDA declined modestly as a result of the sharp

decline in revenues from international business and worsening IC balance.



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4

operational highlights



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5

sub base continued to expand but at a slower rate

866

681616

350 389

221

18

119

-126

96

34

164

263

777

469

780

255

884

Q108 Q208 Q308 Q408 Q109 Q209

Postpaid

Prepaid

Total

• Subscriber base continued to grow

amid weak economic condition.

• But the growth slowed down due to

shift of focus from acquisition to

retention.

• Total sub base at end of Q209:

19.2 million.

– Postpaid 2.4 million subs

– Prepaid 16.8 million subs

net adds (000 subs)



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6

IC ratio unchanged

67% 68% 69% 69% 71% 71%

33% 32% 31% 31% 29% 29%

Q108 Q208 Q308 Q408 Q109 Q209

on-net off-net

outgoing on:off-net traffic off-net incoming:outgoing traffic

55% 55% 55% 53% 53% 53%

45% 45% 45% 47% 47% 47%

Q108 Q208 Q308 Q408 Q109 Q209

incoming outgoing



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240 232 219 220 215

8376 68 62 59 56

262

344317 300 281 279 271

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

260 253 250 249 240

8376 68 61 58 54

284

367336 320 311 307 294

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

MOU and ARPU dropped from seasonality

• Higher average tariff partly offset the impact of slightly lower MOU on ARPU.

• Decline in blended ARPU mainly driven by prepaid segment.

• Incoming traffic from AIS and True Move continued to decline.

blended MOU

-12.4 %-4.1 %

blended ARPU

-14.6 %-3.0 %



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8

410 382 398 423 418

147141 125 107 105 106

470

616552

507 506 528 524

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

postpaid – ARPU slightly up

net adds (000 subs) MOU (mins/month/sub) ARPU (bt/month/sub)

• Owing to seasonality MOU declined modestly but ARPU slightly up from higher monthly fees.

• Lower net adds reflect increased focus on subscriber quality.

-4.9 %-0.8 %

-11.2 %+ 0.9 %

596 558 511 543 548

146143

127109 107 108

669

656650620

685739815

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

3418

96

164

119

-126

Q108 Q208 Q308 Q408 Q109 Q209



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240 235 230 226 217

7468 60 55 51 47

259

333 308 295 284 277 264

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

-4.5 %

193 187 178 176 172

74 68 60 56 52 49

207

281 261 248 234 228 221

Q108 Q208 Q308 Q408 Q109 Q209

outgoing incoming

prepaid – slow down in net adds

net adds (000 subs) MOU (mins/month/sub) ARPU (bt/month/sub)

• Net adds slowed down due to shift focus from acquisition to retention.

• ARPU declined at a slower rate than MOU as calling rate inched up slightly

-14.0 % -15.6 %-3.5 %866

681616

350 389

221

Q108 Q208 Q308 Q408 Q109 Q209



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financial highlights



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11

service revenues down 2.6% QoQ,

mainly from a sharp reduction in IR and IDD

13,470 12,746 12,786 12,720 12,981 12,674

3,9583,886 3,629 3,405 3,266 3,149

17,42816,632 16,415 16,125 16,247 15,823

Q108 Q208 Q308 Q408 Q109 Q209

Service revenue IC revenue

13.0%

3.4% 4.4%

20.1%

14.4%

44.6%

23.4%10.5%

3.3% 4.5%

14.0%

44.2%

13.4%2.6%3.9%

19.9%

14.3%

46.0%

service revenues (THB million)

-4.9 %

-2.6 %

Postpaid airtime

Prepaid airtime

InterconnectionVASInternational

Roaming (IR)Others

Q209Q109 Q208



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QoQ Revenue change illustrated

16,501

16,029

Q109 Lower Inbound

Roaming / IDD

Lower Domestic

revenues

Lower IC Higher outbound

roaming

Higher Other Q209



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3,551

3,396 3,404

3,481

3,619

3,404

Q108 Q208 Q308 Q408 Q109 Q209

… resulted in lower regulatory cost

+0.2 %-5.9 %

revenue share & numbering fee (THB million)

• Regulatory cost declined QoQ due to

lower service revenues and one-time

adjustment on provision for numbering

fee dispute with CAT in Q109.

• Excluding the one-time provision in

Q109, regulatory cost declined 1.3%.

Note: Comprise revenue share to CAT and numbering fee to NTC



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1,798 1,7411,922 1,922

1,795 1,735

Q108 Q208 Q308 Q408 Q109 Q209

Network OPEX Others

declining prepaid voucher cost and network OPEX

network OPEX and other cost of services

Note: Other CoS consists mainly of prepaid voucher, roaming & IDD

charges, and others.

-0.3 %

-3.3 %

9,017

549

Q208 Q109 Q209

No. of new sites 128 42

Total sites on air 9,829 9,871

• Network OPEX slightly increased YoY due to

higher no. of cell sites, but declined

moderately QoQ.

• Other CoS declined from lower prepaid

voucher cost, and lower roaming and IDD

charges.



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2,549 2,509 2,554

2,8212,705 2,649

14.4% 14.9% 15.3%17.2% 16.4% 16.5%

Q108 Q208 Q308 Q408 Q109 Q209

SG&A SG&A of total rev

reduction in selling & marketing was offset by rental increase

SG&A excl. A&D (THB million)

+ 5.6 %

SG&A excl. A&D as % of total revenues

4.5%5.3%

4.5%

5.7%5.1%

4.7%

9.9%9.5%

9.9%

11.3% 11.3%12.0%

5.3%5.9%

5.1%4.5%

5.8%

3.9%

Q108 Q208 Q308 Q408 Q109 Q209

S&M of total rev. Prov for doubtful account

Admin excl A&D of total rev

-2.1 %

Note : SG&A include impairment of goodwill & intangible asset. Note : Provision for doubtful account is in percentage to postpaid

revenue.



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16

2,149 2,1702,335

2,476 2,4102,571

Q108 Q208 Q308 Q408 Q109 Q209

A&D - cost of service A&D - SG&A

increase A&D (SG&A) from HQ renovation & IT system

A&D - deferred right, PPE, and SG&A

+18.5 %

+6.7 % • A&D – cost of service slightly up.

• A&D – SG&A increased from relocation

to new HQ and investment in IT system.



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4,7724,8204,465

5,130

7,879

5,7205,458

Q108 Q208 Q308 Q408 Q109 Q209

EBITDA EBITDA ex DPC EBITDA margin ex DPC

30.3%

27.0%29.1%

32.1%32.2%

29.6%

EBITDA margin improved QoQ

EBITDA (THB million)

-12.6 % (excl DPC )

- 1.0 %

net profit (THB million)

1,3641,4701,2391,836

3,905

2,346 2,053

Q108 Q208 Q308 Q408 Q109 Q209

Net Profit Net Profit ex DPC

-7.2 %-33.6 % (excl. DPC )



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QoQ EBITDA change illustrated

4,820 4,772

Q109 Lower

IR/IDD

Lower

domestic &

other

revenues

Higher net

IC cost

Increase

admin

Lower COS Lower S&M Lower Prov

bad debt

Numbering

fee effect

Other items Q209



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19

healthy operating free cash flow

• Slightly higher CAPEX compared to last

quarter.

• Target free cash flow of THB 12 billion is

maintained.

Operating free cash flow (THB billion)

5.7

7.9

5.1

4.54.8 4.8

2.22.6 2.6

1.51.3

3.93.5

5.3

1.9

3.5 3.3

1.3

Q108 Q208 Q308 Q408 Q109 Q209

EBITDA Capex Operating FCF



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ample liquidity for repayment & 3G auction

54.6

63.172.8 67.8 67.7

61.6

11.112.712.7

12.211.59.6

0.60.70.90.60.81.2

0.20.30.40.20.30.4

Q108 Q208 Q308 Q408 Q109 Q209

FFO to Total Debt (%)

Interest Coverage

Ratio

Net debt to EBITDA

Net debt to Equity

interest-bearing debt (THB billion) financial ratios

debt maturity profile (THB billion)

• Cash on hand of THB 15.2 billion (incl

short-term investment).

• Undrawn committed facilities of

THB 6.0 billion.

35.9 35.1

28.9 28.1 27.4 26.5

Q108 Q208 Q308 Q408 Q109 Q209

3.7

5.87.2

6.5

3.3

Q309 Q409 2010 2011 2012-2015



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regulatory updates & other issues



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• HQ relocation completed.

• Non-commercial trial of 3G on 850 MHz to be launched in

Q309.others

• On Access Charge case, we have not been served with TOT’s

plaint of the Admin Court.

• IC rate recommendation by DRC has not been endorsed by NTC.

• We are in the process of filing disputes on IC agreement with

True and TT&T before NTC.

• NTC intends plans 3G auction by the end of 2009.

• NTC targets to publish the MNP regulation in Q309.

regulatory

regulatory updates & other issues



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outlook



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24

business direction 2009

• Focus on retention & quality of new subs by using

segmentation approach.

retention &

usage stimulation

• CAPEX significantly lower than in 2008.

• Cost efficiency programs – target THB 2 billion OPEX

reduction by year end 2010.

cost control

preparation for

3G

• Prepare for 3G auction, which is expected to take place by

year end 2009.

• Revise dividend policy when financial implications from 3G are

available.



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25

outlook for 2009

• 3 – 4 million net adds for the industry.

• dtac expects to maintain market share.

• Approximately THB 12 billion.operating free cash flow

net adds



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appendix



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income statement

-65.1%3,905-7.2%1,4701,364Net profit

-33.6%2,053-7.2%1,4701,364Net profit ex. DPC

-64.1%1,322-8.9%521474Income tax

-61.1%5,751-7.2%2,4112,238EBIT

-23.8%

-16.7pp

-2.5pp

-39.4%

+5.2%

-7.1%

-5.0%

-0.6%

-19.0%

YoYQ209 Q109 QoQ Q208

Service revenues (w/o IC)

IC revenues

12,674

3,149

12,981

3,266

-2.4%

-3.6%

12,746

3,886

Total revenues 16,029 16,501 -2.9% 16,880

Operating Costs (w/o IC)

IC Costs

10,416

3,469

10,618

3,538

-1.9%

-1.9%

9,957

3,734

EBITDA 4,772 4,820 -1.0% 7,879

EBITDA margin

EBITDA margin (excl. DPC)

29.6% 29.1% +0.5pp 46.3%

32.1%

Financial Costs 399 421 -5.2% 523

THB million



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28

registered vs active subs (in million)

18.119.2

20.220.9 21.1 21.5

16.7 17.4 18.2 18.7 18.9 19.2

Q108 Q208 Q308 Q408 Q109 Q209

registered subs active subs

dtac second quarter 2009...investor relations: e-mail: [email protected] tel: 662 202 8882 8 410 382 398...

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