Sustainable Intelligence to Complete Your Digital Lifestyle, for a Better World Together
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ANNUAL REPORT 2019 SUSTAINABLE INTELLIGENCE TO COMPLETE YOUR DIGITAL LIFESTYLE, FOR A BETTER WORLD TOGETHER True Corporation Public Company Limited 18 True Tower, Ratchadaphisek Road, Huai Khwang, Bangkok 10310, Thailand Tel. +66 (0) 2859-1111 Fax. +66 (0) 2859-9134 www.truecorp.co.th ANNUAL REPORT 2019 CONTENT 1 203 GLOSSARY AND ACRONYMS INTERNAL CONTROLS AND RISK MANAGEMENT 5 209 COMPANY BACKGROUND CONNECTED TRANSACTIONS AND BUSINESS OVERVIEW 226 21 SIGNIFICANT FINANCIAL INFORMATION NATURE OF BUSINESS 231 36 MANAGEMENT’S DISCUSSION AND ANALYSIS THE THREE-YEAR BUSINESS GOALS 244 38 REPORT OF THE AUDIT COMMITTEE RISK FACTORS FOR THE YEAR 2019 55 247 CORPORATE AND OTHER REPORT OF THE COMPENSATION AND SIGNIFICANT INFORMATION NOMINATING COMMITTEE FOR THE YEAR 2019 89 248 SHAREHOLDERS REPORT OF THE CORPORATE GOVERNANCE COMMITTEE FOR THE YEAR 2019 90 DIVIDEND POLICY 249 REPORT OF THE FINANCE COMMITTEE 91 FOR THE YEAR 2019 MANAGEMENT STRUCTURE 250 156 REPORT OF THE BOARD OF DIRECTORS’ CORPORATE GOVERNANCE RESPONSIBILITIES FOR FINANCIAL STATEMENTS FOR THE YEAR 2019 195 SUSTAINABILITY AND 251 CORPORATE SOCIAL RESPONSIBILITIES FINANCIAL STATEMENTS “Investors can find more information of True Corporation Public Company Limited from the Annual Registration Statements (Report 56-1) posted on the Securities and Exchange Commission’s website at www.sec.or.th or on the Company’s website at www.truecorp.co.th” ANNUAL REPORT 2019 GLOSSARY AND ACRONYMS GLOSSARY AND ACRONYMS The Company or TRUE True Corporation Public Company Limited Agreement for Joint Venture Agreement for Joint Venture in the Membership Television between MCOT (the Mass Communications Organization of Thailand, at that time) and TrueVisions Cable (Thai Cable Vision Plc., at that time) dated June 6, 1994, with subsequent additions and/or amendments AP&J AP&J Production Co., Ltd. AWC Asia Wireless Communication Co., Ltd. BFKT BFKT (Thailand) Limited BITCO Bangkok Inter Teletech Public Company Limited BMA Bangkok Metropolitan Area CAT or CAT Telecom CAT Telecom Public Company Limited China Mobile China Mobile International Holdings Limited CNP Cineplex Co., Ltd. CRAVE Crave Interactive Limited CRAVE <B.V.> Crave Interactive B.V. CRAVE <Inc.> Crave Interactive Inc. DIF Digital Telecommunications Infrastructure Fund Golden Light Golden Light Company Limited (Registered in foreign country) Goldsky Goldsky Company Limited (Registered in foreign country) GPI <BVI> Gold Palace Investments Limited (Registered in foreign country) HCWML Hutchison CAT Wireless MultiMedia Ltd. HMSTL Hutchison MultiMedia Services (Thailand) Limited 1 ANNUAL REPORT 2019 HSPA High Speed Packet Access HSPA wholesale agreement A wholesale agreement for HSPA mobile services between CAT Telecom as a wholesale operator and Real Move as a reseller, dated 27 January 2011 with subsequent additions and/or amendments HTTCL Hutchison Telecommunications (Thailand) Co., Ltd. HWMH Hutchison Wireless MultiMedia Holdings Limited IC Interconnection IKSC Internet Knowledge Service Center Co., Ltd. K.I.N. <BVI> K.I.N. (Thailand) Company Limited (Registered in foreign country) KSC KSC Commercial Internet Co., Ltd. MCOT MCOT Public Company Limited MKSC MKSC World Dot Com Co., Ltd. MVNO Mobile Virtual Network Operator NBTC National Broadcasting and Telecommunications Commission Prospect Gain Prospect Gain Limited (Registered in foreign country) PTE Panther Entertainment Co., Ltd. Queue Q Queue Q (Thailand) Company Limited Rosy Legend Rosy Legend Limited (Registered in foreign country) SD Song Dao Company Limited SM Samut Pakan Media Corporation Co., Ltd. SMT SM True Co., Ltd. SSV Satellite Service Company Limited TAI True Axion Interactive Ltd. TAM Telecom Asset Management Co., Ltd. TCJ True CJ Creations Co., Ltd. 2 ANNUAL REPORT 2019 TDG True Digital Group Co., Ltd. (Formerly : True Digital & Media Platform Co., Ltd.) TDI PT True Digital Indonesia TDPH True Digital Philippines Inc. TDPK True Digital Park Co., Ltd. TDS True Distribution & Sales Co., Ltd. TE Tele Engineering & Services Co., Ltd. TEL True E-Logistics Co., Ltd. TFF Transformation Films Company Limited TGS True GS Co., Ltd. TH Telecom Holding Co., Ltd. TIC True International Communication Co., Ltd. TICC True Internet Corporation Company Limited TICT True Icontent Co., Ltd. TIG True International Gateway Co., Ltd. TIS True Internet Technology (Shanghai) Company Limited (Registered in foreign country) TKSC Telecom K S C Co., Ltd. TLP True Life Plus Co., Ltd. TM True Multimedia Co., Ltd. TMD True Media Solutions Co., Ltd. TMV True Move Company Limited TNN Thai News Network (TNN) Co., Ltd. TOT TOT Public Company Limited True Group or the Group True Corporation Public Company Limited and its subsidiaries 3 ANNUAL REPORT 2019 True Incube True Incube Co., Ltd. True-Kona True-Kona Cayman GP True Music True Music Co., Ltd. True Trademark True Trademark Holdings Company Limited True4U True4U Station Co., Ltd. TT True Touch Company Limited TUC True Move H Universal Communication Co., Ltd. TUFC True United Football Club Co., Ltd. TV True Voice Company Limited TVC True Visions Cable Public Company Limited TVG or True Visions Group True Visions Group Co., Ltd. TVS True Visions Public Company Limited VoIP Voice over Internet Protocol 4 ANNUAL REPORT 2019 COMPANY BACKGROUND AND BUSINESS OVERVIEW TRUE GROUP’S VISION, OBJECTIVE AND LONG TERM GOAL True Group is Thailand’s fully-integrated telecommunications and digital services provider offering mobile, broadband internet, television, content as well as digital platform and offerings. The Group’s key competitive strengths are its convergence propositions which combine a variety of quality products and an unparalleled selection of communication services utilizing advanced technologies, innovative solutions and a comprehensive range of digital media and content. Its vision is to be the leading digital infrastructure provider that fully connects people, organizations, economies, and societies together to create sustainable value for life. True Group’s core businesses are: TrueMove H, which operates cellular business with excellent network quality and coverage through a comprehensive spectrum portfolio. TrueMove H delivers optimum mobile experience on all platforms with networks covering 98% of the Thai population nationwide moving ahead to provide 5G services for both consumer and corporate segments as well as Narrowband IoT (“NB-IoT”) network covering all administrative districts in all 77 provinces. TrueMove H outperformed the industry both in terms of revenue and subscriber growth. Its service revenue growth exceeded the industry for 7 consecutive years, adding 1.4 million net subscribers in 2019 and expanding its subscriber base to 30.6 million. TrueOnline, the leading broadband internet provider through high-quality fiber network encompassing over 15 million homes nationwide. Its fiber broadband propositions with downloading speeds of as high as 1,000 Mbps or 1 Gbps, matching consumers’ rising demand for fiber services, have received strong market response. This drove TrueOnline’s above-industry broadband net adds of 320k during the year and grew its subscriber base to 3.8 million. TrueVisions, the pay TV, digital TV and content provider offering a wide range of quality international and local content. TrueVisions ended the year with the total customer base of approximately 4.0 million, of which 2.3 million were paying subscriber base (premium and standard customers) while the rest were FreeView and Free-to-air customers; and True Digital Group offers a portfolio of digital services for consumer, merchant, and enterprise markets. Key businesses include Digital Media, O2O and Privilege, Data Analytics, IoT and Digital Solutions, as well as True Digital Academy. The Group’s flagship digital media platform “TrueID” has received a positive response from the market and became the most downloaded application in its category, accelerating its monthly active users (MAU) to 24.6 million by the end of 2019. True Group seeks to escalate Thailand’s telecommunications infrastructure and digital services to be at the forefront of the international community with concentrated efforts in providing superior products and services to consumers while increasing opportunities and channels for Thai people throughout the country to easily access news and information, and to bridge the digital divide. The Group’s ongoing commitment is to provide high-quality offerings to consumers by focusing on developing wired and wireless networks utilizing advanced technologies, service excellence, innovation, digital offerings and solutions, quality international and local content and an ideal combination of its various products through convergence propositions. These fulfill customers’ needs and enhance their engagement, well positioning True Group to accelerate growth alongside consumers’ growing demands for telecommunications and digital services. True Group strives to develop its business towards sustainability by conducting its business transparently and engaging with all stakeholder groups accordingly, demonstrating economic, social, and environmental responsibility at the national, community and corporate levels continuously. As a result, True has received prestigious international 5 ANNUAL REPORT 2019 recognitions in sustainable development particularly earning the highest rating in the world in the telecommunications industry for Dow Jones Sustainability Index for two years in a row. Additionally, it was the only company in the Thai telecommunications