6. Future Plan

1)

+-------------------+--------------------------------------------------+
| Project           | 3G                                               |
+-------------------+--------------------------------------------------+
| Project detail    | 3G or Third-Generation mobile telephony          |
|                   | technology is a worldwide standard which improve |
|                   | efficiency and performance for mobile wireless   |
|                   | network to provide greater capacity for voice    |
|                   | call and significantly higher data speed.        |
|                   | Technically, 3G is capable of a maximum speed of |
|                   | 384 kbps at all conditions and at a speed of 2   |
|                   | Mbps in low-mobility condition and in-door       |
|                   | space. The higher speed is 3 times higher than   |
|                   | 120kbps achieved under EDGE and 40kbps for 2.5G  |
|                   | currently offered by AIS. The company expects 3G |
|                   | to help enhance variety of services through      |
|                   | introduction of various applications such as     |
|                   | internet, email, multimedia, music/video         |
|                   | downloading, instant messaging, and other        |
|                   | capacity-demanding applications.                 |
|                   |                                                  |
|                   | Thai industry has had very strong growth on the  |
|                   | data subscribers as well as data usage in the    |
|                   | past few years. In 2007, percentage of data      |
|                   | revenues to service revenues was approximately   |
|                   | 11%. AIS targets to increase the percentage of   |
|                   | data usage from a current 11% to 20% within the  |
|                   | next 3-5 years.                                  |
|                   |                                                  |
|                   | AIS is considering applying for a 3G license     |
|                   | once the National Telecommunications Commission  |
|                   | (NTC) finalizes and issues the 3G licensing      |
|                   | framework and criteria. The total investment     |
|                   | expenditure for 3G network is estimated at Baht  |
|                   | 20-23 billion per annum for the first 2-3 years, |
|                   | with primary interest in WCDMA technology using  |
|                   | 2.1GHz radio spectrum. In the initial phase, the |
|                   | network rollout could potentially start from     |
|                   | Bangkok Metropolitan Area and other big cities.  |
|                   |                                                  |
|                   | AIS is pending on the estimate of expected       |
|                   | return on investment due to uncertainty on 3G    |
|                   | license terms and conditions as well as          |
|                   | potential license fee.                           |
+-------------------+--------------------------------------------------+
| Risk factors      | a) There is a risk of 3G frequency allocation to |
|                   | be delayed as the formation of the National      |
|                   | Broadcasting Commission (NBC) has not yet        |
|                   | materialized. Under the Frequency Allocation Act |
|                   | 2000, new frequency allocation must be approved  |
|                   | by a Joint Allocation Commission comprising      |
|                   | members from both the National Broadcasting      |
|                   | Commission (NBC) and the National                |
|                   | Telecommunications Commission (NTC). Without     |
|                   | NBC, the Joint Allocation Commission could not   |
|                   | be formed.                                       |
|                   |                                                  |
|                   | On 21 December 2007, The National Legislative    |
|                   | Assembly (NLA) passed the Broadcasting Act,      |
|                   | which gave the power to NTC to regulate the      |
|                   | industry. Under the Broadcasting Act, there      |
|                   | would be one commission called the National      |
|                   | Broadcasting and Telecoms Commission (NBTC)      |
|                   | regulating both telecom and broadcasting         |
|                   | industries. Until the NBTC to be formed,         |
|                   | expecting around 180 days after the Broadcasting |
|                   | Act is published on the Royal Gazette (around    |
|                   | 3Q08), NTC has a power and responsibility to     |
|                   | regulate both the telecom and broadcasting       |
|                   | industries. This empowers NTC and gives them     |
|                   | more confidence to issue 3G spectrum. In         |
|                   | addition, NTC last year asked the Council of     |
|                   | State, the government legal consultant, whether  |
|                   | it alone could issue 3G license and spectrum;    |
|                   | opinion was that NTC could do unless contradicts |
|                   | with International Telecoms Union (ITU)          |
|                   | standard. Since 3G WCDMA spectrum had been       |
|                   | classified globally as telecoms spectrum by the  |
|                   | ITU, NTC could issue the spectrum on its own,    |
|                   | without waiting for the formation of the NBC or  |
|                   | the resulting of the Joint Allocation            |
|                   | Commission. We believe, NTC, if feels comfort to |
|                   | have a support from government, will move on     |
|                   | with this issue.                                 |
|                   |                                                  |
|                   | b) Key barriers to consumers’ adoption of 3G     |
|                   | will depend upon 3G handset prices and           |
|                   | attractive user applications. The current 2.5G   |
|                   | and EDGE technology has served as a transition   |
|                   | path for consumers to evolve into higher data    |
|                   | consumption environment. During the past few     |
|                   | years, AIS has been working closely with content |
|                   | providers in developing new service applications |
|                   | to suit different needs of each customer         |
|                   | segments. This could help attract consumers to   |
|                   | choose to buy 3G enable handsets. 3G handsets    |
|                   | have been sold in Thailand in the last few       |
|                   | years. Consumers have been purchasing the        |
|                   | handsets due to their attractive features of the |
|                   | handsets. In addition, 3G handset average        |
|                   | selling prices is likely to continue its decline |
|                   | trend in the coming years, which will help       |
|                   | support the 3G subscriber’s growth.              |
+-------------------+--------------------------------------------------+

2)

+-------------------+--------------------------------------------------+
| Project           | Network upgrade to HSPA                          |
+-------------------+--------------------------------------------------+
| Project detail    | The technology advancement currently supports    |
|                   | the use of 900MHz for upgrading to HSPA (High    |
|                   | Speed Packet Access) from the 2G GSM technology, |
|                   | which will allow higher data speed comparable to |
|                   | 3G. This development is considered under the     |
|                   | existing BTO contract that AIS has with TOT. The |
|                   | initial investment cost is estimated around 5-7  |
|                   | billion Baht. However, this budget is subjected  |
|                   | to uncertainty such as demand forecast,          |
|                   | bandwidth allocation and planning to support     |
|                   | data usage, terms and agreement with TOT, etc.   |
|                   | Therefore, AIS is pending on the estimate of     |
|                   | expected return on investment of this project.   |
+-------------------+--------------------------------------------------+
| Risk factors      | a) User terminals that will support HSPA on      |
|                   | 900MHz spectrum are currently limited in numbers |
|                   | and lack of variety. Going forward, if equipment |
|                   | vendors have limited supply of such type of      |
|                   | terminals, implication is that retail price      |
|                   | could be more expensive.                         |
|                   |                                                  |
|                   | b) Using the existing 900MHz, which is currently |
|                   | served as 2G, to run HSPA will require careful   |
|                   | network design and planning.                     |
+-------------------+--------------------------------------------------+

3)

+-------------------+--------------------------------------------------+
| Project           | WiMAX                                            |
+-------------------+--------------------------------------------------+
| Project detail    | The Company is also interested in applying for a |
|                   | license to operate WiMAX. WiMAX or “worldwide    |
|                   | interoperability for microwave access            |
|                   | technology” enables wireless broadband           |
|                   | connectivity over wireless metropolitan area     |
|                   | network. The technology is expected to           |
|                   | complement to the Company’s existing broadband   |
|                   | business as well as mobile communications. WiMAX |
|                   | will allow the Company to tap into residential   |
|                   | broadband market without laying expensive and    |
|                   | time-consuming physical connections to houses.   |
|                   | It will also allow flexibility in expansion of   |
|                   | cellular network in some areas.                  |
|                   |                                                  |
|                   | Until there are certainties on technology        |
|                   | standardization, spectrum band,                  |
|                   | commercialization, and specific regulation by    |
|                   | NTC, AIS is pending on development of detailed   |
|                   | business plan including estimated total          |
|                   | investment and expected return for the project.  |
|                   |                                                  |
|                   | In November 2007, AIS received a WiMAX trial     |
|                   | license from NTC. Trial license has a period of  |
|                   | 90 days and can be done in specific areas.       |
+-------------------+--------------------------------------------------+
| Risk factors      | a) There is a risk toward technology             |
|                   | standardization whereas the availability of      |
|                   | spectrum is the biggest impediment to WiMAX      |
|                   | deployment. Spectrum bands that can be used for  |
|                   | WiMAX are widely ranged from 2.3 GHz to 5.8 GHz. |
|                   | In general, the 2.3 GHz and 2.5 GHz spectrums    |
|                   | are used to deploy mobile WiMAX and 3.5 GHz are  |
|                   | used for fixed WiMAX. The business model for     |
|                   | WiMAX and its success significantly depends on   |
|                   | the frequency at which it is deployed. Economy   |
|                   | of scale significantly relies on the             |
|                   | standardization of technology which helps        |
|                   | driving down equipment costs and encouraging     |
|                   | innovation, as well as allowing consumers to     |
|                   | roam globally.                                   |
|                   |                                                  |
|                   | b) There is a risk on regulatory uncertainties   |
|                   | e.g. frequency allocation, licensing fee, and    |
|                   | the obligations on the operator that contained   |
|                   | within it. Therefore, the Company would require  |
|                   | a thorough study on regulatory requirement for   |
|                   | WiMAX license as well as a consumer demand       |
|                   | before making investment decision.               |
+-------------------+--------------------------------------------------+

4)

+-------------------+--------------------------------------------------+
| Project           | Radio-Frequency Identification (RFID)            |
+-------------------+--------------------------------------------------+
| Project detail    | Radio-frequency identification (RFID) is an      |
|                   | automatic wireless identification method,        |
|                   | relying on storing and remotely retrieving data  |
|                   | using devices called RFID tags or transponders.  |
|                   | RFID technology was firstly introduced in        |
|                   | logistics and supply chain systems. In recent    |
|                   | years, chip and antenna (tag) prices have been   |
|                   | falling and therefore makes RFID technology      |
|                   | becomes increasing popular in many industries,   |
|                   | including telecom, which its application is for  |
|                   | mobile payment service. In country such as       |
|                   | Japan, RFID technology is widely used in mobile  |
|                   | payment service. Customers use their mobile      |
|                   | phones to pay for subway and purchase goods and  |
|                   | services.                                        |
|                   |                                                  |
|                   | In Thailand, AIS expects that this technology    |
|                   | will help promotes a Mobile-Commerce business in |
|                   | which AIS foresees as another key growth area.   |
|                   | This will help the Company promotes its          |
|                   | subscribers to utilize mPAY service as well as   |
|                   | to encourage the non-mPAY users to try the       |
|                   | service. As at December 2007, AIS had mPAY       |
|                   | subscribers of 450,000 with only 15% was active  |
|                   | customer. The Company targets to increase the    |
|                   | percentage of active customer to 40-45% in 2008. |
|                   |                                                  |
|                   | Until there are certainties on technology        |
|                   | standardization, commercialization and specific  |
|                   | regulation by NTC, AIS is pending on development |
|                   | of detailed business plan including estimated    |
|                   | total investment and expected return for the     |
|                   | project.                                         |
+-------------------+--------------------------------------------------+
| Risk factors      | Key barriers to consumers’ adoption of RFID      |
|                   | technology will depend upon the RFID enabled     |
|                   | phone. Nokia introduced its first RFID phone     |
|                   | since 2004 and currently there are several       |
|                   | mobile manufactures launching RFID phones such   |
|                   | as Motorola, Samsung, BenQ, Philips and Sony. In |
|                   | addition, the price for RFID phone is in a       |
|                   | medium range. For example, Nokia 3220 and Nokia  |
|                   | 5140, the prices are approximately USD 100 -150. |
+-------------------+--------------------------------------------------+