ANNUAL REPORT 2019 Advanced Info Service Public Company Limited 5G Capacity 26 Ghz 1200 Mhz
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ANNUAL REPORT 2019 Advanced Info Service Public Company Limited 5G Capacity 26 GHz 1200 MHz 5G 2600 MHz mmW Including 100 MHz 4G DENSE URBAN 5G BRING FUTURE TODAY 700 MHz 30 MHz Mid Band METRO BESTINCLASS Low Band C 5G SPECTRUM ove NATIONWIDE rage CEO Message Key Highlights Our Business Corporate Governance Board and Management Risk & Internal Control Financial Report Company Overview Our Business Corporate Governance Financial Report Message from Chairman Policy and Business Overview Profile of the directors Board of Directors’ responsibility for 005 of the Board of Directors and CEO 017 046 and management 124 financial reporting 021 ADVANC and shareholders details 007 Operational Highlight 054 Directors and management’s 125 Report of the independent certified 023 Business Structure of AIS Group Shareholding in AIS public accountants Financial Highlight and Subsidiaries as of 2019 009 Structure of INTUCH Group Financial statements Key Development Towards 024 130 011 Message from the Chairman Message from Chairman Sustainable Growth 025 055 of Nomination Management discussion of Executive Committee 192 and analysis Awards and Recognition for 2019 and Governance Committee 014 Revenue Structure 026 & Products and Services Message from Chairman 056 of Leadership Development Industry competition 2019 and Compensation Committee 033 & Outlook 2020 Management structure Three-year Business Direction 057 036 Corporate governance Risk Factors 073 Additional Information 039 087 Relationship with investors 088 Audit and risk Committee report 2019 General information 207 and other significant information Risk management, 092 internal control & internal audit Message from Sustainable 105 Development Committee Further information of the Company could be found Business sustainability in the Annual Report 2019 (Form 56-2) posted on 106 www.sec.or.th and www.ais.co.th 107 Related transactions Annual Report 2019 | Advanced Info Service Public Company Limited COMPANY OVERVIEW 3 Annual Report 2019 | Advanced Info Service Public Company Limited CEO Message Key Highlights Our Business Corporate Governance Board and Management Risk & Internal Control Financial Report VISION To Become The Most-Admired Digital Life Service Provider In Thailand. MISSION To enhance people’s lives through Digital Services. • Deliver Superior Products and Services to Enrich People’s Daily Lives and to Improve Enterprise Capabilities and Efficiency. • Enhance Customer Intimacy Through The Best Customer Experience. • Drive Intrapreneurship and Employees’ Professionalism, and Promote a Positive, Lively and Agile Work Culture. • Build Win-Win Growth to All Stakeholders. 4 Annual Report 2019 | Advanced Info Service Public Company Limited Message from Chairman of the Board of Directors and CEO Dear Shareholders, Greater Quality Strengthen all Businesses Units and Bolster Digital Platforms 2019 was a good year for AIS in spite of the AIS, as a major telecommunications service country’s lackluster economic performance with a provider, maintains a strategy of building upon GDP of 2.4 percent, coupled with heavy competition its mobile customer base of over 42 million in both mobile and fixed broadband businesses. people to increase revenue. Towards this, AIS maintained its leadership position in mobile we have continually invested in platforms to business with a revenue market share of more enhance our digital service. In 2019, our video than 48 percent, highest in the industry. In the platform, AIS PLAY, has continued to grow with meantime, AIS Fixed broadband business or AIS 2 million active viewers based on both mobile Fibre, started 5 years ago, saw higher growth and home broadband platforms. Additionally, we in revenue and subscribers among operators, also expanded digital platform to serve online exceeding the target of 1 million in 2019. Not only insurance service in cooperation with insurance did AIS Fibre’s market share rose to 10 percent companies as business partner. We also expanded in 2019, its net profit also turned positive for the into the eSports realm to support the gaming first time. For enterprise business, acquiring CSL market. All of the aforementioned progresses are had strengthen AIS with comprehensive products crucial for AIS in moving towards being a digital and service portfolio. With our aim to lead one- life service provider. stop ICT solutions, we have reorganized to better service enterprise customers and hence were able to stimulate solid growth in enterprise segment. 5 Annual Report 2019 | Advanced Info Service Public Company Limited Building Strengths as AIS Moving into the 5G era, AIS will be able to offer brand- shareholders for their commitment. We, the executives Enters its Third Decade new and distinct customer experiences, opening up to and staff of AIS, promise to work to our utmost capability new business opportunities from emerging businesses towards the goals we have set and, most importantly, to Over the past 29 years, AIS has maintained its number and services. Over the past 1-2 years, AIS has tested 5G care and reward all of our shareholders and stakeholders one status by given precedence to customers, partners, spectrum in preparation of bringing 5G technology to the to the best of our ability, including being a part in our home and employees. We place customers at the heart of all Thai people. We placed our focus on developing digital and nation developments. our operations, delivering them only the best possible technological infrastructure as well as skilled resources technology and responding to their needs. We believe to enhance business capabilities of various sectors and that our future growth is based in cooperation with industries in Thailand. partners, especially in the coming 5G era, and we will need to collaborate with variety of industries to achieve Building Sustainable Growth progress. AIS also devotes great importance to its and Playing a Role in National employees, supporting them to acquire new abilities in Development step with customer demands and to adapt to rapidly changing technologies. AIS was selected for listing among the Dow Jones Sustainability Indices (DJSI) in 2019, both on the World Our goals for the coming 3-5 years, even as the number Market and Emerging Market indices, reflecting our one company in mobile service industry, is to transition vision and policies for sustainable business. By operating from being solely a telecom provider to a digital life service with mindfulness towards the economy, society and the provider. This is because customers have access to all environment, AIS has been able to perform with excellence kinds of services online and we believe that they seek for as well as transparency. We have prioritized our customer services beyond just connectivity. data privacy, promoted E-waste management projects in Warm regards, the interest of the environment and supported the Digital The first ring of the AIS business strategy is strengthening Intelligence Quotient (DQ) of the Thai people while using our core business, that is mobiles business. The second our technologies to build a safe digital Thailand. ring is to create a new revenue engine through fixed broadband business and enterprise business. The third We thank all of our customers for their trust in our (Kan Trakulhoon) (Somchai Lertsutiwong) ring are digital platforms, which will serve as a foundation products and services, our partners for their resolute Chairman of the Board Chief Executive to expand into other industries in the future. collaboration in response to our users’ needs and our of Directors Officer - - 6 Annual Report 2019 | Advanced Info Service Public Company Limited CEO Message Key Highlights Our Business Corporate Governance Board and Management Risk & Internal Control Financial Report Operational Highlight MOBILE AIS AS A DIGITAL LIFE SERVICE PROVIDER GROWING through mobile, broadband and digital services OPERATOR FIXED BROADBAND LEADER FIRST TO COMPLETE CUSTOMER BASE with a trusted brand Best 4G Network Quality NATIONWIDE and quality network ‘Thailand Fastest SPEEDTEST AWARDS Network’ for by ookla 2015 - 2019 5G speed test 5 CONSECUTIVE THAILAND’S FASTEST 10% YEARS MOBILE expanding subscribers market share Operator 1 NETWORK 29% by Ookla 48% 57 CITIES #1 Customer Choice COVERAGE Operator 2 Rated 35% 23% ‘THAILAND’S MOST increasing share of net additional subscribers ADMIRED BRAND 100% LARGEST & COMPANY’ fully fiber connection mobile operator with by BrandAge 42 MILLIONS Top of Mind SUBSCRIBERS Service Excellence Rated MORE THAN ‘CUSTOMER 86% 48% RELATIONSHIP EXCELLENCE’ 1 MILLION of AIS fibre subscribers revenue market share by APCSC (Asia Pacific Customer Service Consortium) AIS FIBRE SUBSCRIBERS are also mobile subscribers 7 Annual Report 2019 | Advanced Info Service Public Company Limited CEO Message Key Highlights Our Business Corporate Governance Board and Management Risk & Internal Control Financial Report Growing Digital Service Awards and Recognition User Base for Long Term Profitability AIS has been selected as a member of DJSI family for 2019 Enterprise Internet of BOTH WORLD INDEX AND EMERGING MARKET INDEX In the telecommunication services sector, Cloud Things (IoT) receiving SAM Bronze Class Sustainability Award. AIS and CSL combined AIS jointly developed to offer one-stop ICT NB-IoT innovations services addressing nationwide connecting Selected as a constituent of enterprise customers over 750,000 devices. needs. the FTSE4Good Index Series FOR 5 CONSECUTIVE YEARS From demonstrating strong