total access communication plc. total access communication plc. 333/3 moo 14 chai building vibhavadi rangsit road, chomphon, chatuchak, bangkok 10900 Tel: (662) 202 8000 Fax: (662) 202 8929 www.dtac.co.th annual report 2007 00 01 contents financial highlights part page 1 financial highlights 01 The Company, operating under “dtac” brand, was founded in August 1989 to provide wireless telecommunication service in 2 the history and evolution 02 the 800 Mhz and 1800 Mhz frequency bands in Thailand under a 27-year “Build-Transfer-Operate” concession granted by CAT Telecom Public Company Limited (formerly known as Communications Authority of Thailand-”CAT”). 3 the change 04 begin with...feeling goood 2003 2004 2005 2006 2007 and goood things will follow Operating Results (in million Baht) Service Revenues 30,521 37,841 41,979 47,013 64,491 4 feel goood is not just an emotion, - message from the chairman and CEO 08 Total Revenues 31,780 38,943 43,129 48,474 65,590 it’s a philosophy EBITDA 12,122 15,073 16,523 17,817 18,893 Operating Profit 6,186 8,838 9,610 10,324 10,613 5 have a goood team - board of directors 012 Net Profit 2,587 4,480 4,611 4,938 5,841 step by step, hand in hand - executive management 014 Balance Sheet (in million Baht) we strive for only the best Total Assets 82,859 84,122 87,219 95,116 100,875 Total Liabilities 53,578 50,371 50,700 53,660 49,009 6 business performance - business overview 020 Total Shareholders’ Equity 29,281 33,751 36,519 41,457 51,866 a goood start to any endeavor begins - prepaid 022 Ratio from within - post-paid 024 EBITDA Margin 37.9% 38.7% 38.1% 36.5% 28.6% - business customers & international roaming 026 Operating Profit Margin 19.5% 22.7% 22.3% 21.3% 16.2% - value added services (VAS) 028 Net Debt:EBITDA 3.6 2.5 2.2 2.0 1.5 - business outlook 029 Net Debt:Equity 1.5 1.1 1.0 0.9 0.5 - people 030 Shares No. of shares (million) 474 474 474 458 2,368 7 dtac and the community - dtac and the community 034 Earning per share (Bt) 5.45 9.44 9.72 10.54 2.50 dtac, helping to make a better world Book value per share (Bt) 61.77 71.20 77.04 88.58 22.20 Share price 8 operations - milestones 038 SET (Bt per share) n/a n/a n/a n/a 39.25 we never stop making things better for you - risk and mitigation 040 SGX-ST (USD per share) 1.80 3.55 3.25 4.30 1.15 - corporate governance 049 Note: On 17 May 2007, dtac reduced the par value of its ordinary shares from THB 10 to THB 2 per share. - interested person transactions 061 - shareholder structure 069 9 results - MD&A 074 Subscribers and Penetration rate ARPU (THB / month) Service Revenues (THB billion) 414 infinite goood feeling - director’s report 079 410 406 82% 374 64.5 356 - audit committee report 082 63% 47.0 - financial statement and notes of financial statement 084 42.0 48% 37.8 43% - glossary 129 35% 30.5 287 50.1 6.6 7.8 8.7 12.2 15.8 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 dtac Sub (in million) ARPU Service Revenues Penetration rate in Thailand ARPU Including IC Service Revenues Including IC Net Profit (THB billion) Subscribers and Revenues Market share Note: - Definition of prepaid sub was changed in 2007, 5.8 31.2% 30.6% from validity + 45 days to active within 90-day 29.8% 4.9 period. 4.6 4.5 28.7% 28.5% 30.4% 29.7% - Interconnection revenue was booked for the first 2.6 28.1% time in 2007, starting from 1 February. 26.3% - Based on old subscriber definition, market share 25.8% of subscriber at the end of 2007 was 31.4%. 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Rev Sub จำนวนผู�ใช�บริการ และจำนวนผู�ใช�บริการต�อประชากรรวม รายได�เฉลี่ยต�อเลขหมายต�อเดือน (บาทต�อเดือน) รายได�จากการให�บริการโทรศัพท�เคลื่อนที่ (พันล�านบาท) 410 414 406 82% 374 64.5 356 63% 47.0 42.0 48% 37.8 43% 35% 30.5 287 50.1 6.6 7.8 8.7 12.2 15.8 2546 2547 2548 2549 2550 2546 2547 2548 2549 2550 2546 2547 2548 2549 2550 จำนวนผู�ใช�บริการ จำนวนผู�ใช�บริการต�อประชากรรวม รายได�เฉลี่ยต�อเลขหมายต�อเดือน รายได�จากการให�บริการโทรศัพท�เคลื่อนที่ รายได�เฉลี่ยต�อเลขหมายต�อเดือน รวม IC รายได�จากการให�บริการโทรศัพท�เคลื่อนที่ รวม IC กำไรสุทธิ (พันล�านบาท) ส�วนแบ�งทางการตลาดของผู�ใช�บริการและรายได� 5.8 31.2% 30.6% 29.8% 4.9 4.6 30.4% 29.7% 4.5 28.7% 28.5% 2.6 28.1% 26.3% 25.8% 2546 2547 2548 2549 2550 2546 2547 2548 2549 2550 จำนวนผู�ใช�บริการ รายได� annual report 2007 08 09 message from the chairman and CEO Our passion for the business and commitment “to become the most admired wireless operator Dear Shareholders, in Thailand are driving us to be more innovative and customer-oriented. In 2007 we managed to gain another record high of 3.9 million net additional customers, beating the previous record of Sigve Brekke ” Chief Executive Officer 3.5 million set just one year ago. At the end of 2007, our total customer base was 15.8 million, up from 11.9 million last year. We continued to contribute to the development of the Thai telecom market and bring mobile telephone services to more Thai people through our network expansion and innovative product and service offerings, particularly to those living in remote areas. Our service revenues and net profit grew by 6.6 percent and 18.3 percent respectively in 2007, and our market and financial position continued to improve over the past year. We firmly believe in being a There were 4 main highlights for dtac in 2007: (1) the introduction of interconnection billing, (2) the listing of dtac’s shares on “good corporate citizen and it the Stock Exchange of Thailand (SET), (3) the rebranding campaign, and (4) other regulatory developments. is part of our promise to integrate social contribution into our business practices. The introduction of Interconnection (IC) billing among telecom operators early in 2007 has had a profound impact on the Thai telecom industry. It has opened a new chapter and brought us one step closer to a level playing field. Throughout 2007, the Boonchai Bencharongkul ” Chairman of the Board market has been adjusting to the new IC regime, and we have seen some positive developments. There was a shift from focus on of Directors tariffs to competitive strengths, such as network coverage and technology, service offerings, and the customers’ experience. We reached another milestone in our history by successfully listing our shares on the SET and becoming the first dual-listed Thai company with shares quoted on both the SET and the Singapore Stock Exchange (SGX-ST). We would like to take this opportunity to thank our shareholders for their support and confidence during this process. The listing on the SET has provided our customers the opportunity to share our success and strengthened our corporate image in Thailand. Furthermore, upon the completion of the listing on the SET in 2007, we received a 5 percent reduction in corporate income tax for a period of 3 years, staring from the fiscal year 2008. The Thai market is now approaching saturation and, as a company, we need to reposition and prepare ourselves to enter into this new era. In the last quarter of 2007, the “feel goood” marketing campaign was launched with the objective to further strengthen the dtac brand and enhance the customer experience. On the regulatory front, apart from the start of IC billing as mentioned above, there have been several other positive developments throughout 2007. Several rulings from both the Administrative Court and the NTC supported our view regarding the IC regime. These steps contribute to making the Thai telecom industry move towards a more level playing field and improve the regulatory environment in which we are operating. Our success has primarily been driven by our people, who are encouraged to be involved in our marketing activities and go out to meet the real customers. We are not a technological or a marketing company. We are in fact a people company serving our customers with wireless communication services. Our passion for the business and commitment to become the most admired wireless operator in Thailand are driving us to be more innovative and customer-oriented. We firmly believe in being a good corporate citizen and it is part of our promise to integrate social contribution into our business practices with the hope that we, as a public company, can help contribute to the economic and social development of the country in the long run. Finally, we would like to close this letter by thanking our shareholders for their trust and confidence in our company. We continue to be passionate about driving our business forward and delivering on our promises. annual report 2007 012 013 Mr. Chulchit Bunyaketu Mr. Knut Borgen board of directors 4 Director 8 Director Academic background Academic background Master degree Master of Arts in Political Science, Kent State University, USA Master degree Master of Business Administration, University of Michigan, USA Bachelor’s degree Bachelor of Law, Chulalongkorn University Bachelor’s degree B.A.