Part 1

Executive Summary

Business Overview

Advanced Info Service Public Company Limited (“The Company” or “ADVANC”
or AIS) is a publicly listed company in the Stock Exchange of Thailand
since November 5, 1991 to operate a cellular mobile telephone network
under a 25-year-build-transfer-operate (BTO) contract granted by TOT
Corporation Public Company Limited (TOT), started from 1990 to 2015. AIS
provides cellular mobile telephone network in the 900 MHz frequency
under the digital GSM technology. The Company’s services include
postpaid under “GSM advance” brand name and prepaid under “One-2-Call!”
brand name. AIS also operates 1800 MHz GSM network through its
subsidiary, Digital Phone Co., Ltd. (DPC). DPC operates under a 16-year
BTO contract from CAT Telecom Public Company Limited (CAT), started from
1997 to 2013.

In addition to the mobile telephone network service, the Company
currently invests in 12 subsidiaries as follows:

1.  Digital Phone Co., Ltd. (DPC) is a service provider of digital GSM
    network in the 1800 MHz.

2.  Advanced Data Network Communications Co., Ltd. (ADC) provides
    voice/data communications service via telephone and broadband in
    Bangkok and metropolitan areas.

3.  Data Network Solutions Co., Ltd. (DNS) provides voice/data
    communications service via telephone lines in provincial areas.

4.  Advanced Contact Center Co., Ltd. (ACC) operates call center
    service.

5.  Advanced MPAY Co., Ltd. (AMP) provides payment business via mobile
    phone.

6.  Advanced Magic Card Co., Ltd. (AMC) operates distribution of cash
    card business.

7.  AIN GlobalComm Co., Ltd. (AIN) is a service provider of
    international telephone and gateway.

8.  Super Broadband Network Co., Ltd. (SBN) is a service provider of
    internet (ISP), internet gateway and broadband, voice over IP, and
    IP television.

9.  Wireless Device Supply Co., Ltd. (WDS) imports and distributes
    cellular phones and related accessories.

10. Advanced Wireless Network Co., Ltd. (AWN) currently not in
    operation.

11. Mobile from Advance Co., Ltd. (MFA) currently not in operation.

12. Data Line Thai Co., Ltd. (DLT) is an internet service provider,
    currently under the process of closing its operations.

Risk factors

The key risk factors involving the Company’s business operation as
identified in detail under the “Risk factors” section in this report
includes regulations and government policy risks, market and competition
risks, operational risk, technology risk, financial risk, challenge of
developing human resources risks. Risk if we are deemed to be a
“foreigner” under the Foreign Business Act, Risk on litigation to which
we are not a direct party, and Risk of not getting contract extended for
operating cellular service ending in 2015.

Financial and operational results

In 2007, AIS has booked an interconnection (IC) revenue (from incoming
minutes) of Bt16,530 million, and IC cost (from outgoing minutes) of
Bt14,054 million, representing a net IC revenue of Bt2.48 billion before
revenue share. The amount was in accordance with the interconnection
agreements with Total Access Communication Plc (TAC) and True Move Co.,
Ltd. (True Move), on which traffic settlement started from Feb-07 with
TAC and Apr-07 with True Move.

For FY07, service revenue excluding interconnection revenue grew 2.9%
y-o-y to Bt78,280 million from Bt76,053 million in FY06 driven primarily
by prepaid revenue growth and higher international call (IDD) revenue.
Prepaid growth was driven by the strong and good-quality net additions
while pricing for new subscription was also improved. The growth of IDD
was contributed by the launch of AIN GlobalComm Co., Ltd, a wholly owned
subsidiary of AIS, offering the international call service through its
own 005 dialing prefix.

Net profit was Bt16,290 million in FY07, compared to Bt16,256 million in
FY06. Excluding IC impact, net profit was Bt14,879 million in FY07,
declined 8.5% y-o-y due to higher network amortization, SGA and interest
expense.

Capital structure was strong with low financial leverage, which
supported company’s ability to continue high dividend payout. In FY07,
total liabilities to equity improved to 71%, from 73% in FY06 due to a
partially repayment of debentures. Shareholders’ equity was Bt75,461
million in FY07, dropped 2.8% y-o-y from Bt77,599 million in FY06 as
company paid dividend over 100% of its net income. In FY07, the Company
paid a cash dividend of total Bt18,658 million, implying a dividend per
share of Bt6.30. The unappropriated retained earnings at the ending
period were Bt49,999 million.

Cash flow position remained strong to support capex and dividend
payment. For FY07, AIS generated cash flow from operations (after
interest and tax) of Bt36,235 million and had net increase in total
borrowing of Bt8,501 million. Of this amount, the group spent Bt17,105
million on capital expenditures, repaid Bt11,523 million of debts, and
paid Bt18,658 million in dividend. As a result, AIS had net decrease in
cash of Bt4,254 million for the period.