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Edited Transcript of ADVANC.BK earnings conference call or presentation 5-Aug-19 11:00am GMT

Q2 2019 Advanced Info Service PCL Earnings Call

Phayathai Aug 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Advanced Info Service PCL earnings conference call or presentation Monday, August 5, 2019 at 11:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Nattiya Poapongsakorn

Advanced Info Service Public Company Limited - Head of IR & Compliance

* Siraphop Paphatthananan

Advanced Info Service Public Company Limited - IR Manager

* Somchai Lertsutiwong

Advanced Info Service Public Company Limited - CEO

* Tee Seeumpornroj

Advanced Info Service Public Company Limited - Chief Finance Officer

* Weng Cheong Hui

Advanced Info Service Public Company Limited - President, COO & Director

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Conference Call Participants

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* Arthur Pineda

Citigroup Inc, Research Division - Director and Head of Pan-Asian Telecommunications Research

* Colin McCallum

Crédit Suisse AG, Research Division - MD

* Pisut Ngamvijitvong

Kasikorn Securities Public Company Limited, Research Division - Analyst

* Piyush Choudhary

HSBC, Research Division - Telecoms Analyst, South East Asia

* Prem Jearajasingam

Macquarie Research - Analyst

* Thapana Phanich

Deutsche Bank AG, Research Division - Research Analyst

* Wasu Mattanapotchanart

CIMB Research - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Advanced Info Service Second Quarter 2019 Result Announcement Conference Call. (Operator Instructions) I must advise you that this conference is being recorded today, Monday, 5th of August 2019. I would now like to hand the conference over to the management team of Advanced Info Service. Thank you. Please go ahead.

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Siraphop Paphatthananan, Advanced Info Service Public Company Limited - IR Manager [2]

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Good evening, everyone. Thanks for joining the results announcement of Advanced Info Service for the second quarter of 2019. To begin with, I would like to introduce management joining with me today, starting from CEO, Khun Somchai Lertsutiwong; next one, President, Khun Hui Weng Cheong; and next one, Khun Tee Seeumpornroj, Chief Financial Officer; and Head of IR and Compliance, Nattiya; and myself, Siraphop, Investor Relations.

To start off, on mobile, basically, the highlights for the second quarter, we saw an improvement in price competition, in which the discontinuation of the fixed speed unlimited plans kept going, therefore, the ARPU on a blended basis has increased around 4% Q-on-Q and resulted in our mobile revenue strongly rising 5.3% year-on-year and 4.3% Q-on-Q.

In terms of subscribers, the postpaid continue with strong momentum in the sub acquisition, so we added 250,000, whereas prepaid subs dropped around 276,000, mainly from churns in onetime segmented SIMs. Following the tariff adjustment, the data consumption, which currently stood at 11.5 gigabytes per sub per month, has also been growing more reasonably, which is an improving sign of monetization. However, just to note that we continue to see competition in prepaid to be quite fluid, where cheap plans with as large as unlimited data allowance were launched, and thus, we have been monitoring closely and selectively responding to competition to ensure that we could preserve our quality subscribers.

Then on the spectrum, as you are aware, that we participated in the 700 megahertz allocation in June and have won 2x10 megahertz. We expect the 700 megahertz to support both upcoming 5G coverage and also 4G efficient investment. The license and the first payment for the spectrum will begin around October of next year. And consequently, the installments of the 900 megahertz is extended to the 2025, as shown on Page 6 of the MD&A.

And also, just to soften some of the concern in the market about our net network quality. In the second quarter, we continued to benchmark with the external speed tester, Ookla, which is widely known in Thailand, as well as our internal drive test in the customer perception survey. We continue to see the result of our maintenance of the leadership in terms of network quality.

Moving on to the fixed broadband. Mainly, we continued to deliver strong results. The revenue growth was 26% year-on-year and also 7% Q-o-Q. Our net sub gain remain at the 60,000 level, resulting in our current subscribers of 855,400 subscribers. We maintain our sub target of 1 million by the end of the year, and we'll continue to use the FMC strategy to uplift AIS customers revenue per household. Currently, we have seen ARPU from the FMC customers giving us around 20% higher than that of the blended basis.

Regarding the enterprise business, we have announced the repositioning of the CSL to align with a bigger focus on ICT, where we'd like to be the one-stop end-to-end service provider in the market. Overall, we remain to expect the total enterprise revenue to increase high single-digit this year.

Coming to the financial results. With the all abovementioned, for the second quarter, our core service revenue stood at THB 35.4 billion, growing 5.8% year-on-year and 4.2% Q-on-Q. Also in the quarter, we have booked a onetime expense for the legal severance compensation, which was stipulated to increase from 300 days to 400 days. The total amount of the expense was THB 636 million. THB 202 million of which was booked in the admin expense, while the rest of THB 34 million (sic) [THB 434 million] was in other cost of service for the call center staff.

The network OpEx, excluding the partnership with -- cost with TOT, rose 7.6% year-on-year and 4% Q-on-Q, while marketing expense was up 26% year-on-year and 5% Q-on-Q. Both were still in line with our expectation as we continue to expand the 4G broadband as well as the enterprise network, along with enhancing our brand leadership in the market.

And with that, excluding the onetime expense, our normalized EBITDA for the second quarter was THB 19.8 billion, up 4% year-on-year and 4.5% Q-on-Q, while our normalized NPAT was THB 8.2 billion, up 2.9% year-on-year and 8% Q-on-Q. The data of the normalization is on Page 4.

Lastly, on the guidance, we maintain all items. So in terms of the top line, the core service revenue in the first half, we grew 4.1% and the guidance was mid-single-digit for the full year. In terms of the EBITDA margin, first half was 43%, in line with our expectation to maintain the margin stable from last year. Budgeted CapEx is maintain THB 20 billion, THB 25 billion, while in the first half, we already invested around THB 13 billion. And lastly, we also announced an interim dividend for the first half performance. The amount is THB 3.78 per share, following our 70% payout ratio policy. The XD date is set on the 16th of August, while the payment date is on the 3rd of September.

And that was for the brief, and back to the operator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Pisut from Kasikorn Bank.

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Pisut Ngamvijitvong, Kasikorn Securities Public Company Limited, Research Division - Analyst [2]

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Yes. I have 3 questions. The first one for Khun Somchai. Please update your -- because on TOT on the asset rental contracts, you mentioned last time that you are in the good progress to make the deal done. What about that for now? And based on my calculations, your rental rate generally is more expensive than your competitors'. So should I expect better financial terms from ongoing negotiation, and how much better and when to materialize? That is my first question. My second question is on -- for your customers who are using the unlimited fixed speed packages. If that packages will expire sometimes in third quarter or fourth quarter this year, how can you might...

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Siraphop Paphatthananan, Advanced Info Service Public Company Limited - IR Manager [3]

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The line was cut.

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Operator [4]

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It seems he dropped off from the line. We'll move on to the next question from the line of Arthur from Citigroup.

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Arthur Pineda, Citigroup Inc, Research Division - Director and Head of Pan-Asian Telecommunications Research [5]

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Just several questions, please. Firstly, can you clarify on the manpower reduction charges? Is this the final charge for the year? And how will this reduce labor costs going forward?

Second question I had is with regard to the regulatory side. Are there any updates on NBTC stand to auction 5G spectrum this year? What's AIS's view on 5G in Thailand?

And just last question with regard to competition and the revenue guidance. I know you're keeping your guidance. Is there -- can you provide any color in terms of how competition has evolved going into the third quarter? Are you seeing those stable or are you seeing any escalation happening in the market?

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [6]

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Thank you. Arthur, your question around manpower, is that related to the onetime expense that we booked?

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Arthur Pineda, Citigroup Inc, Research Division - Director and Head of Pan-Asian Telecommunications Research [7]

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Yes. Is that all or is there more for the next quarter?

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [8]

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Yes, that actually follow the legal requirements that changed for the staff that will retire. Previously, I have to reserve about 300 days of pay. That is changed to 400 days. And that applies, of course, to all the companies in Thailand. So we made that onetime adjustment. So that's why we do the normalized EBITDA and NPAT.

5G spectrum and our view?

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Somchai Lertsutiwong, Advanced Info Service Public Company Limited - CEO [9]

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I think we will follow up for the NBTC guidance. They already gave the interview that they really need to have the auction as soon as possible. However, the frequency 2.6 and 3.5 still belong to MCOT and Thaicom. It's not easy to take it immediately. Even they have some auction in advance and let them use the frequency when it's available. That term payment will not affect our financial forecast. The thing that we -- think we still follow on the news, and the reality happen what it will come out, when it come up, every opportunity to have the frequency in our business we consider based on, at that period, what condition what price and also the demand that we need to use it or not will depend on the consultant that we will hire them to evaluate at that time.

However, on my view of the 5G, the real use case in Thailand, even government tried to push it hurry for the Thailand 4.0 image. I think in reality all operators even have the auction in advance, the investment will not be there in the heavy investment. Just do spot by spot or the trial for interim for branding for the perception use because when we have to implement, we have to have the business use case for sure. I think the real 5G should be another 2 to 3 years -- now commercial in another 2, 3 year time, not in the next year.

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [10]

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Just to add also that the fact that the NBTC is looking at the low, mid and high band auction at the same time, actually positive for the industry. As always, know that for 5G, they require both low, mid as well as the high band. The fact that they're looking at 700, 2.6 GHz and [26 GHz] actually spells positive news for the industry.

As all of us know, I mean we're always asking for the NBTC on their long-term road map regime. The fact that they are putting all together is actually positive. Otherwise, there has been individual auction of the other bands, which actually does not allow us to look too much the future on how we should be positioning the auction. So in fact, we think that's positive news. The 2 band, the 3 band, so therefore, a similar option.

Regards to the competition itself, yes, I think for the second quarter, the whole industry, in fact, benefited from the correction of the plan. Withdrawal, discontinuation of unlimited has actually positive results on all 3 of them. And we hope that this will continue into the second half. But we also do see that in the June, July and now August itself, there are some operators who have been looking at giving very high quota, which actually is synonymous with unlimited. We think that this will be -- we hope that this will be really a short-term move. That is somewhat our current thinking. But in the long run, all operators will see that there is actually benefits, analyzing the tariff and continuing with the adjustment. Earlier, there was earlier that question regarding what happens for our postpaid when the unlimited plans expire. So currently, for our postpaid unlimited plans, when they expire, we will try and move some of them -- depending on their profile, to move them into the higher priced plan or to move them into plans with the fixed quota. It's all being looked at on a case by case basis. For users with very, very high usage, which is above the normal usage, then we'll try and move them into the quota plan. For some others, we will do it on a case by case basis.

For prepaid, we have stopped the unlimited on top and we -- for those existing players, we have actually increased the price of the unlimited on top for existing players. So for them, we plan to complete or finish this unlimited plans in the fourth quarter this year.

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Arthur Pineda, Citigroup Inc, Research Division - Director and Head of Pan-Asian Telecommunications Research [11]

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Sorry, can I just clarify with regard to the new generous prepaid plans with big bundles? How do these -- how does the pricing compare versus the prior unlimited plans?

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [12]

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It depends on the individual usage. Of those -- even for us, we're able to compete enough to reduce the value gap. It's still too early because, for example, THB 200 for 200 gig, ultimately, you also will be looking at how much each of the individuals are using or are these just more of a branding image. But exactly how customers use is still uncertain at this point. Because this plan has just started, we are continuing to monitor those.

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Operator [13]

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Your next question comes from Pisut from Kasikorn Bank.

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Pisut Ngamvijitvong, Kasikorn Securities Public Company Limited, Research Division - Analyst [14]

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I'm not sure whether you have answered my first 2 questions or not. So I'll...

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [15]

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No, not -- I think Khun Hui just answered your second question on the fixed unlimited plan. We have not yet answered your first question around negotiation with TOT. And I believe you do have a third question.

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Pisut Ngamvijitvong, Kasikorn Securities Public Company Limited, Research Division - Analyst [16]

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Okay. My third question is that, assuming I'm paying you at THB 199 for 4 megabit per sec cap speed unlimited package, what will be your offering to me when my promotions go expire? That's my third question.

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [17]

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Let me answer the third question first. We will look at your profile. First of all, usage pattern, right? Then we will decide whether we move you onto quota plan or maybe extend you for -- on the unlimited. So this will be all on the case-by-case basis. This are for existing customers where we need to take care of them and we have to look at the usage pattern.

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Somchai Lertsutiwong, Advanced Info Service Public Company Limited - CEO [18]

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On the first question, my answer is still the same as last time, the thing's still on the process and have good positive sign. We work very close with TOT. TOT has also worked closely with all their internal board, all the thing.. Let's see the real result happen and I'll announce to all of you.

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Tee Seeumpornroj, Advanced Info Service Public Company Limited - Chief Finance Officer [19]

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And you asked whether the benchmark price of our competitors could be used as a kind of anchoring point. I would say that for those views that there may be CAT [somehow], it's a deal that they also do settle -- do some settlement on other disputes that they have. So I'll say that, sometimes, it's very hard to compare because it's not apple to apple. So I think we'll let you know once when we're able to negotiate and have finalized the terms on this issue.

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Pisut Ngamvijitvong, Kasikorn Securities Public Company Limited, Research Division - Analyst [20]

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If I may have a follow-up question. From my understanding that NBTC is working to refresh the MVNO, mobile virtual network operators, make collections to make it more easy for the MVNO to enter the Thai market. I'm not sure whether you are studying on this one or not, but what happen in our neighboring countries, that is quite unfavorable to the incumbent. Do you think this one could be the potential threat for you to increase the ARPU as you [run the half] in the near future?

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [21]

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If I may comment my personal view, NBTC, in fact, has licensed a few MVNOs. The fact that -- personally, I think the fact that MVNOs are not able to flourish is because of the tariff structure. Before there were unlimited price plans, fixed price, there's hardly any avenue for MVNO to compete with an MNO. So unless there's a structural change in the way that tariff are structured in the industry, then it's quite difficult for MVNO to flourish in this market. Just my personal opinion.

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Operator [22]

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Your next question comes from the line of Colin from Crédit Suisse.

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Colin McCallum, Crédit Suisse AG, Research Division - MD [23]

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A couple of questions. First of all, just for Nattiya. Just to be quite clear on the one-off item. So are you saying it's just a provision? Basically, it's a larger provision that need to be made and not actually a reduction in staff? So if I can just clarify that. And then second question...

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [24]

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Right.

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Colin McCallum, Crédit Suisse AG, Research Division - MD [25]

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Right, Nattiya. I thought so. And then the second one is just on fixed broadband. Your ARPU has actually held up fairly well. But now that price competition has started in the fixed broadband space, is that a concern? And how are you going to control the price competition in fixed broadband given that, obviously, there's very heavy costs for rolling out fixed broadband? And I guess it would be very bad news if ARPU levels fell a long way from the THB 558 level. So how -- what is your strategy for having seen competition start in fixed broadband? How do you make sure it doesn't get out of control?

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [26]

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For our fixed broadband, yes, the market has been very competitive to the point I would say it's aggressive that the operators are offering even 50% price plan. For us, our strategy is still the same. We are focusing on our Fixed-Mobile Convergence that we are targeting our existing mobile customers and also offering them with content, such as HBO and currently now we are on a promotion to do Netflix even for both mobile as well as for fixed broadband.

For the -- maintaining ARPU itself, we are -- we know that the market has been quite aggressive in the giving higher speeds and maintaining the same price plan. In this respect, we are also offering the same, giving our existing customers same price but with a higher upload speed. For example, currently, when they were 100/50, 100 down and 50 up, we were offering them 100 down and 100 up, giving them better value for the existing price that they are paying.

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Tee Seeumpornroj, Advanced Info Service Public Company Limited - Chief Finance Officer [27]

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Maybe if I could just add. On the price competition, if you look at -- basically, I think there's one on the privilege program that they -- sometimes, they offer big discount when people move operator to operator, but that should be limited to a certain portion of the whole portfolio.

Second one is basically an upgrade on the speed. I think a lot of operators now offer higher speed but based on the same price plan. I think that, to the operator, it's a positive sign in the sense that we can still maintain the ARPU. But we just offer a higher speed which, in a way, in the case of many operators, we still have capacity to offer that. And it's unlimited -- the total package is unlimited anyway, so it's -- based on the higher speed.

And I think lastly, if you maybe -- I'm not sure that you mentioned because the latest promotion from one of our big competitor in terms of the high-end package which they offer 1 gigabit promotion at a less than THB 1,000 price plan. On that front, I think not many people or not a big portion of portfolio subscribe to that high-end packages. So I would say that it will not impact the average ARPU of the whole industry. In certain ways, it could be a way to actually drive up the ARPU of certain segment. But on average, I think the ARPU for industry is roughly about THB 550, THB 600 around that. So to up the spending to THB 900 then it could be a boon to certain segment.

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Operator [28]

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Your next question comes from the line of Wasu from CIMB.

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Wasu Mattanapotchanart, CIMB Research - Analyst [29]

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I have 4 questions. The first question is about the prepaid segment, because in the presentation, you mentioned that there were like prepaid seasonal churns of onetime segmented SIM cards. What are exactly the onetime segmented SIM cards in the prepaid segment? That's number one.

Number two, I think you mentioned during the presentation that competition in the prepaid segment is still fluid. When the competition flares up, is it region-specific or nationwide? And is it in term of the price plans or handset subsidies? So that's question number two.

Number three, what was the normalized EBITDA margin when you exclude the provision for employees and also the rental income from TOT? That's number three.

My last question is on the rumor about the Jasmine acquisition, whether you have any comment on that.

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [30]

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Let me take the first 2 questions. Well, the seasonal churn that we mentioned are all onetime SIMs. And this largely refers to the international travelers SIM. So we have both travel SIM coming into Thailand and as well as SIM2Fly that we sell both to our local customers as well as international customers from overseas countries. So most of them, they are all just prepaid SIMs. So when they buy, they're usually one-off. So because of the high season in the first quarter, you see the churn coming in, in the second quarter.

For the competition in prepaid, actually it happens both nationwide as well as region. For nationwide, there are some price plan which are nationwide. For certain regions, there are also price plan which are targeted into the specific provinces even to the ampers. And this is also where we are also competing. In certain ampers where we are weak or in certain provinces where we are strong, we also need to compete to have a local tariff especially targeted at these segments.

For -- just regarding the price, for handsets, the handset bundling still continues with our competition. We are having some handset bundling as well, but the way we offer is a bit different from the competition.

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [31]

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Yes. Your third question on the normalized EBITDA margin, excluding the TOT deal and also excluding the onetime severance provision, that will be around 46% EBITDA margin. And last question around JAS, we shall not comment on any rumors of that.

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Operator [32]

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Your next question comes from the line of Prem from Macquarie.

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Prem Jearajasingam, Macquarie Research - Analyst [33]

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two questions from me, please. I recall you made a comment around CSL being repositioned. First of all, are things at CSL going as planned, or do you feel that this is taking a bit longer than you had initially anticipated? One.

And two, given the right conditions, how significant should CSL be to AIS over a 3- to 5-year period? My second question is essentially around your cash position. Given the deferment of the 900 megahertz spectrum payment and assuming that the cost per spectrum in Thailand is potentially found in lower level going forward, don't you think there's room for you to not build up as much cash on the balance sheet, i.e., could you -- would the board be willing to look at returning excess cash to shareholders? How -- what's your view around the net debt-to-EBITDA in the long run?

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [34]

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All right. Let me take the first question regarding CS Lox. As you know, the current -- the rebranding that we did was more to focus CSL with a new brand. The old brand has been in existence for more than 10 years and it doesn't rhyme with the current environment. So we took the opportunity to rebrand it, to give it a more up-to-date, a more modern feeling. But the business is still the same. It's focusing on the ICT business, the data center, cloud as well as cybersecurity.

On whether the acquisition and the benefits to begin is taking longer than expected. We have gotten quite a lot of synergies not only in terms of the cost synergy as well as some of the synergy regarding to revenue. But in our acquisition of CS Lox, there wasn't -- actually, there was an agreement that we will not do anything to restructure of CS Lox within a 1-year period, which expires in actually July of this year. So currently, we are looking at how we would actually combine the 2 companies to have a better focus of targeting at the right customer segment and positioning the products into the relevant technical areas, so that we can actually have a much stronger company going forward.

As to how significant CS Lox will be over 3 to 5 years, we are looking at the enterprise business, that's combined between AIS and CS Lox. So our plan for the 3 to 5 years is looking at it from a single entity, looking at the EDS services, cybersecurity as well as to manage the resources and [property] that I mentioned earlier. So it's a combined view over the next 3 to 5 years rather than as a CS Lox and AIS as separate companies.

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Prem Jearajasingam, Macquarie Research - Analyst [35]

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So how significant do you think enterprise revenues should be to AIS in the long run then?

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [36]

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For us, our Ex Com and our board expect a very significant growth for enterprises. At this point in time, we are not at liberty to disclose what that will be. But bearing in mind that we want to grow the CS Lox as well as the enterprise business moving forward, including things like even the IoT, which IoT is more targeted at the enterprises. So all this will be looked at by the combined enterprise business of AIS and CS Lox.

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Tee Seeumpornroj, Advanced Info Service Public Company Limited - Chief Finance Officer [37]

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I think the third one is around, I would say, the dividend policy; given the deferment of the big payment of 900, I will say that we will look at the overall cash outflow over the next several years. Even though we have a big deferment next year but, as you know, we need to acquire 700, which will cost THB 17 billion more. And if NBTC holds true to their announcement on the 2.6 and 3.5, then possibly there could be more auction coming up for us to bid next year. So all in all, I would say that we'll look at what's the cash inflow that we make and cash outflow that we'll have to make or to make a few years, plus investment on 5G. Then would it mean what should be the appropriate level on dividend. But as of now, I think we'll hold to the minimum of 70% as we said. But if you notice from the amount dividend that we pay, it could be a little bit higher just because we want to make sure that the dividend amount that we pay this round also comparable to what we paid last year. So I would say, that... yes, we'll keep that fluid until we know a bit clearer in terms of the future investment.

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Prem Jearajasingam, Macquarie Research - Analyst [38]

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Sorry. Just as a follow-up. Given the long payment period even for the 700, would you not expect the 5G spectrum also to have a similar drawn out payment process which would help your cash flows? Or do you think there's still a chance that they come in and try to get to you for a big lump sum upfront?

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Tee Seeumpornroj, Advanced Info Service Public Company Limited - Chief Finance Officer [39]

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I think we'll -- because we don't really know what the final condition would be. So if it comes out that way, then we'll look at what we can do. And as we mentioned, you asked us what would be the net debt-to-EBITDA longer term, right now, we just add in the payable for [700] (corrected by company after the call). Overall net debt to EBITDA is a bit over I think 2x. And we don't know how the competition will flare up in terms of next round of the competition -- of the auction. We still don't know what's the rule going to be, so that's why we kind of reserve the policy for now.

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [40]

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Just also to note that 5G is actually different from the 3G and 4G. 3G and 4G is more utility and telecoms coupled to normal usage, whereas 5G is more application-oriented. So like the autonomous car, all those, those I think long time to actually grow. And currently, most of these applications are still in the infancy or even in the R&D phases. So hopefully, the NBTC will take note of this so that the payment structure that the plan could take all this into consideration.

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Operator [41]

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Your next question comes from the line of Thapana from DB TISCO.

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Thapana Phanich, Deutsche Bank AG, Research Division - Research Analyst [42]

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A lot of my answers have been -- or questions have been answered. But I do have 2 questions. So the first one is about your prepaid sub, just going back to that again. So I think you mentioned that a lot of the decrease, 276,000 decrease was from the onetime churn of the segmented SIMs. If you kind of extract that portion out, how much of that is coming from the postpaid conversion and how much of that is coming from losses to other operators? Or is it fair to say that, actually, you haven't -- you didn't really see a lot of prepaid subscriber loss to the other camps at all? That's my first question.

The second question pertains the future 5G investment. I'm just curious whether you have considered the possibility of potentially finding a partner to help invest in the 5G work in the future, be it the spectrum sharing or be it the actual infrastructure itself? Or is that just not part of AIS' policy at all for these kind of things?

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Tee Seeumpornroj, Advanced Info Service Public Company Limited - Chief Finance Officer [43]

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I think on your first question, we -- I don't think we have observed any significant churn to other operators than we normally do. It's -- we also convert a lot of our own operator cost, so I don't think that we noticed that there is any big outflow to any of the operator. And a lot of times, what happen in the market now is the operator have given a lot of subsidies or a very good kind of price plan in the market. So sometimes, it's going to create extra demand in the market, so the numbers can fluctuate I think for this quarter. So we'll say that the fundamental doesn't shift that much for us.

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Somchai Lertsutiwong, Advanced Info Service Public Company Limited - CEO [44]

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On the 5G, I think it's still early to forecast everything because we have to waiting for the condition of the frequency auction to happen in next year. And also, the regulation can share the resources or the frequency or not. And another thing that I really focus on the business use case, on the business use case, that even we get the frequency, when we will invest to monetize that kind of 5G service. I think it is too early to comment on this thing. However, every opportunity that we can do based on the regulation and can save our costs, we will do for sure.

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Operator [45]

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Your next question comes from the line of Piyush from HSBC.

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Piyush Choudhary, HSBC, Research Division - Telecoms Analyst, South East Asia [46]

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Yes. Congratulations on the good set of numbers. Two questions from my side. Firstly, if you can highlight how many subscribers are still on fixed speed unlimited data plans separately in prepaid and postpaid segment?

And second question is, can you update us on the time line for 2G network shutdown?

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [47]

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So on both postpaid and prepaid, the unlimited is around 30% of the base for both. Time line of 2G shutdown... sorry?

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Piyush Choudhary, HSBC, Research Division - Telecoms Analyst, South East Asia [48]

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This is as of second quarter, I mean? 30%?

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Nattiya Poapongsakorn, Advanced Info Service Public Company Limited - Head of IR & Compliance [49]

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As of second quarter.

Time line of 2G shutdown. Previously, NBTC can technically talk about October. It's still pending at the NBTC Board to make the official announcement. So we're still looking towards that time line.

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Operator [50]

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(Operator Instructions) There are no further questions at this time. Presenters, please continue.

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Siraphop Paphatthananan, Advanced Info Service Public Company Limited - IR Manager [51]

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Okay. So thank you very much, everyone, for joining. Just as a reminder, on the 8th of August, we will hold the analyst briefing for the whole Intouch group. For those of you who might not be able to come, we will upload the videos on our website on the later date. So thank you very much, and see you again later next quarter. Goodbye.

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Somchai Lertsutiwong, Advanced Info Service Public Company Limited - CEO [52]

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Bye.

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Weng Cheong Hui, Advanced Info Service Public Company Limited - President, COO & Director [53]

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Bye.

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Operator [54]

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Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.