Overview. by DTV Co., ITV had been. managed. matter is. changed. From January Standards as set out in ( 1H11 ) in 1H11. comparison

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1 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS OF OPERATIONS Overview We are a holding company with investments mainly in telecommunications, media and advertising. Our discrete business segments aree as follows: local wirelesss telecommunication managed by Advanced Info Service Plc ( AIS ); satellite and international businesses managed by Thaicom Plc ( THCOM ) and its i jointly- businesses managed by ITV Plc ( ITV ), Matchbox Co., Ltd. ( Matchbox ) and otherr businesses, primarily controlled entities that operate telecommunications services in Cambodiaa and Laos; media and advertising managed by DTV Co., Ltd. ( DTV ) and CS Loxinfo Plc ( CSL ). ITV had been operating a free-to-air television broadcasting station in Thailand until its license was revoked by the Prime Minister s Office on Marchh 7, 2007 and the company had to cease operations. As a result, there is currently no revenue from ITV, which is now included in the media m and advertising business. This matter is currently under arbitration and the outcome cannot be predicted. The details of this case have been included in the notes to the financial statement. On April 1, 2011, we notified the Stock Exchange of Thailand ( SET ) that the Company had changed its logo and securities trading name as it had expanded from a telecommunications service provider to an enterprise of diversity and the technology-centric parameters had gradually increased d to focus on customer satisfaction. The previous logo of more than 20 years was changed from SHIN to INTOUCH, which is derived from a smile and reflects the Company s friendly approach, sense of partnership and easy accessibility. The securitiess trading name was changed from SHIN to INTUCH, which was adopted by the e SET on April 7, On August 11, 2011, the board of directors of the Company passed a resolution to pay an interim dividend from the operational resultt for the periodd April 1 August 10, 2011 at Baht per share, totaling Baht 5,226 million. The Company scheduled s to pay this dividend on September 8, From January 1, 2011, consequent to the adoption of new andd revised Thai Financial Reporting Standards as set out in note 3 of the interim financial statements for the hree-month ( 2Q11 ) and six-month s ( 1H11 ) periods ended June 30, 2011; the Group s accounting policiess that used too prepare the financial statements for the year ended December 31, were changed. The impact on the consolidated and separated financial statements has been summarized below: : TAS 27 (revised 2009) ): Consolidated and Separate Financial Statementss became effective on January 1, 2011 and hass been appliedd prospectively. Accordingg to the former accounting standard, the Group did not allocate excess loss over equity of ITV to minority interests (non-controlling interests) in the financial statementss before January 1, However, started from the 1Q11 financial statements, thee Group has allocated the 2Q11 and 1H11 loss of ITV to non-controlling interests; subsequently, the profit attributable to owners of the Company in the consolidated statement of profit or loss increased byy approximately Baht 50 million m in 2Q11 and Baht 100 million in 1H11. TAS 19: Employee Benefits, the Group chose to adjust retrospectively the present value of defined benefit obligation when employees services ended. This resulted in a decrease in the consolidated and separated retained earnings e as at December 31, 2010 of Baht 232 million and Baht 40 million, respectively. Also, this reduced r the 2Q10 consolidated and separated statements of profit or loss (a comparison to 2Q11) by Baht 7 million and Baht 1 million, respectively. And for 1H10, the consolidated and separated statementss of profit or loss (a comparison to 1H11) was reduced by Baht 14 million and Baht 2 million, respectively. Our consolidated profit attributable to owners of the Company for 2Q11 was Baht 2,663 million and for 1H111 was Baht 5,,242 million, based on total consolidated revenue of Baht 5,015 million and Baht 9,675 million, respectively. Our consolidated net profitt depends primarily on the results of operations of AIS Group, our associated company and the primary focus of our wireless communications business. We account for AIS Group using the equity method. Our share of the e net profits from AIS Group, for 2Q11, was Baht 2,776 million, which contributed 55.3% of our total consolidated revenue and 104.2% of our consolidated net profit attributable to owners of the Company. For 1H11, the share was Baht 5,529 million, contributed 57.1% of our total consolidated revenue and contributed 105.5% of our consolidated nett profit attributable to owners of the Company. For a discussion and analysis of the results of AIS Group, please see the MD& &A for AIS below. Page 1 of 20

2 The Company s Operations (using the Cost Method) The following table provides the Company s statements of profit orr loss for the periods indicated. This table should be read in conjunction with the Company s financial statements. Threee months ended June 30, March 31, 2011 (in millions of Baht) Dividends income... Other income % 30.7% 4, % 0.2% Total revenues % 4, % Six months ended e June 30, 2010 (Restated) June 30, 2011 June 30, 2010 (Restated) (in millions off Baht) 10, % 4, % 10, % % % % 10, % 4, % 10, % Administrative expenses % % Management benefits % % Total expenses % % Profit (loss) before finance costs... Finance costs... Net Profit (loss) for the period... (25.3) (0.5) (25.8) 70.1% 1.4% 71.5% 4,905.1 (0.5) 4, % 0.0% 98.8% % % % % % % 10, % 4, % (0.5) 0.0% (1.0) 0.0% 10, % 4, % % % % 10, % (1.0) 0.0% 10, % The Company s Net Result 2Q11 compared to 1Q11 and 2Q10 In 2Q11, the Company s net loss was Baht 26 million, significantlyy decreased from profit of Baht 4,905 million in 1Q11 and Baht 10,486 million inn 2Q10. This was, mainly, from f a dividend received from AIS in 1Q11 and 2Q10. In addition, in 2Q10, AIS hadd a special dividend paid to shareholders.. 1H11 compared to 1H10 The Company s net profit decreased 53.2% from Baht 10,424 million in 1H10 too Baht 4,879 million, in 1H11, this was because of special dividend received from AIS during 1H10. Page 2 of 20

3 The following table provides the Company s statements of financial positionn for the periods indicated. This table should be read in conjunction with the Company s financial statements. Cash & cash equivalents and current investment... Other current assets... Investments in subsidiaries and associates Other non-current assets.... Total assets... June 30, 2011 (in millions of Baht) 1, , , % 0.1% 86.9% 0.4% 100.0% As at December 31, 2010 (Restated) (in millions of o Baht) 1, , , % 0.3% 86.6% 0.4% 100.0% Total liabilities % % Equity Share capital... Premium on share capital Subscription receivable... Legal reserve and others Retained earnings... Equity attributable to owners of the Company , , , % 71.0% 0.1% 3.5% 2.7% 99.5% 3, , , % 70.7% - 3.4% 2.8% 99.1% Total liabilities and equity , % 14, % The Company s Financial Position Total assets as at June 30, 2011 decreased slightly from December 31, Total liabilities decreased 46.1%, from a drop in accrued expenses. Equity attributable to owners of the Company was Baht 14,319 million, a slight increase from Baht 14,302 million in December 31, Page 3 of 20

4 The Group s Operations (using the Consolidation Method) The following tables provide a breakdown of our total consolidatedd revenue andd consolidatedd expenses by showing each item as a percentage of total consolidated revenue, for the periods indicated. This table should be read in conjunction with our consolidated financial statements. Three months ended Six months ended June 30, 2011 March 31, 2011 June 30, 2010 June 30, 2011 June 30, 2010 (Restated) (Restated) (in millions of Baht) (in millions of Baht) Revenue: Revenuee from sales and services: - Telephone networks in foreign entities (other than AIS)... - Satellite... - Media and advertising... - Others*... Total revenues from sales and services. Share of profits of associates: - AIS (local wireless telecommunication). - Others... Total share of profit of associates... Other incomes , , , , % 29.4% 5.3% 3.0% 42.8% 55.3% 0.9% 56.2% 1.0% , , , , % 24.8% 4.6% 2.3% 39.0% 59.1% 1.3% 60.4% 0.6% , , , , % 27.6% 6.6% 3.7% 46.8% 51.0% 0.9% 51.9% 1.3% , , , , % 27.2% 5.0% 2.7% 41.0% 57.1% 1.1% 58.2% 0.8% , , , , % 28.3% 5.6% 3.8% 47.4% 50.5% 0.9% 51.4% 1.2% Total revenue... 5, % 4, % 4, % 9, % 8, % Expenses: Costs of sales and services... Operating agreement fees... Selling expenses... Administrative expenses... Loss on provision for interest on unpaid operating agreement fee... Net foreign exchange loss... Management benefit expenses... Total expenses... Profit before finance costs and tax... Finance costs... Income tax... Profit before minority interests... Attributable to: Equity holders of the Company... Minority interests... Net profit for the period... 1, , ,740.7 (121.5) (17.3) 2, ,663.0 (61.1) 2, % 2.8% 1.1% 7.8% 2.2% 0.2% 0.5% 45.3% 54.7% (2.5)% 0.0% 52.2% 53.2% (1.0)% 52.2% 1, , ,549.0 (120.8) , ,579.5 (138.5) 2, % 1, % 2.9% % 0.8% % 8.1% % 2.3% % 0.4% % 0.7% % 45.3% 2, % 54.7% 1, % (2.6)% (131.8) (3.1)% 0.3% % 52.4% 1, % 55.4% 1, % (3.0)% (89.0) (2.1)% 52.4% 1, % 2, % 3, % % % % % % % % % % % % % 4, % 4, % 5, % 3, % (242.3) (2.5)% (258.1) (3.0)% (4.5) 0.1% % 5, % 3, % 5, % 3, % (199.5) (2.0)% (182.9) (2.2)% 5, % 3, % * Includes internet, direct satellite television,, information technology businesses and consolidation elimination Page 4 of 20

5 2Q11 compared to 1Q11 and 2Q10 Total revenue Total revenue increased 7.6% QoQ, from Baht 4,659 million in 1Q11 too Baht 5,015 million in 2Q11, mainly as a result off revenue fromm sales and services and increased 19.6% % YoY from Baht 4,194 million in 2Q10, mainly as a result of thee share of the net profit of AIS A Group. Revenue from sales and services increased 18.1% QoQ, from Baht 1,818 million in 1Q11 to Baht 2,148 million in 2Q11, mainly as a result of higher revenue from satellite business, media and advertising, and other revenues, but this was offset with lower revenue from telephone networks in foreign entities. When compared to the same period last year, the revenue rose 9..4%, from Baht 1,964 million in 2Q10, mainly as a result fromm satellite business; however, this was offset with the drop of telephone networks in foreign entities. Revenue from f telephone networks in foreign entities in Cambodia and Laos decreased 24.4% QoQ from Baht 339 million in 1Q11 to Baht 2562 million in 2Q11 and decreased 31.5% YoY from Baht 374 million in 2Q10. This was primarily due d to high competition in Laos and Cambodia. Also, the appreciation of thee baht against the kip and the US dollar, as Laos and Cambodia had reported their financial statementss in the mentioned currency, respectively. The decline was derived from the kip and the US dollar financial statement translation to the baht. In Laos the total number of telephone subscribers, bothh mobile and fixed-line, f decreased 3.7% from 1.63 million in 1Q11 to 1.57 millionn in 2Q11, mainly, from a decreased in mobile GSM prepaid subscriber due to the high competition. ARPU dropped QoQQ and YoY due to a change in customer behavior tending towards multiple m SIM ownerships. The ARPU of PSTN decreased slightly QoQQ and YoY as a result fromm a change in customer behavior. In Cambodia the total number of subscribers decreased 21.4% QoQ from f 0.70 million in 1Q11 and 16.7% YoYY from 0.66 million in 2Q10 to 0.55 million subscribers in 2Q11, primarily due to a decrease in the mobile prepaid subscribers, as a result from high competition, especially pricing.. The mobile ARPU increased slightly QoQ whereas decreased YoYY because of promotion campaign and the trend that customers hold multiple SIM ownership, which was also resulted to a drop in average minute m of usagee per subscriber. Satellite revenue increased 27.7% QoQ from Baht 1,157 millionn in 1Q11 to Baht 1,477 million in 2Q11 and increase 27.4% YoYY from Baht 1,159 million in 2Q10, mainly, from UT sales and bandwidth usage of IPSTAR, particularly in, Japan, Australia, New Zealand Malaysia and Myanmar. Besides, since April 2011, the bandwidth usage revenue had been recognized in full amount, while, previously, there was 50% discount for Japanese customer who paid one year inn advance. The revenue from Thaicom conventional satellite also increased as a result from the risee of transponder lease, particularly from satellite television t operators and telecommunication companies. In 2Q11, the number of satellite television channels was 3800 rose from 304 in 2Q10. Moreover, there was an increase in revenue from other additional services such as teleport services and providing equipment to install satellite network. Media and advertising revenues increased 25.5% QoQ Q from Baht 213 million in 1Q11 to Baht 268 million in 2Q11 due to the increase in marketing event, especially from AIS group, but decrease slightly YoY from Baht 278 million. Other revenues increased 35.8% QoQ from Bahtt 109 millionn in 1Q11 to Baht 148 million in 2Q11 but decreased slightly YoY from Baht 154 million in 2Q10. The QoQ increase was due to higher satellite dish and equipment sales by DTV, a subsidiary of THCOM. The YoYY revenue dropped from information technology business but this was offset with the increase in revenue from satellite dish and equipment sales, particularly, in Cambodia, even though the sale of satellitee dish and equipment in Thailand dropped. Share of profits of associatess was stable QoQ but increased 29.5% YoY from Baht 2,177 million in 2Q10 to Baht 2,819 million inn 2Q11, mainly contributed by AIS group. In 2Q11, the net profit of the standalone AIS Groupp (not including the adjustment to derivatives and intercompany gain made by the Company to its share of profits from AIS Group s results) was Baht 6,116 million, droppedd slightly QoQQ from Baht 6,2696 million. The normalized profit, after excluding goodwill impairment i onn Digital Phone Co., Ltd. ( DPC ), a subsidiary of AIS, was Page 5 of 20

6 Baht 6,502 million, a slight drop from 1Q11 normalized profit of Baht B 6,654 million. When compared to the same period last year, there wass an increase of 24.6% from normalized profit of Baht 5,220 million. The slight drop of QoQ normalized profit was mainly due to lower sales margin, higher network OPEX and marketing expenses. The lower sales margin was as a result from lower price of handset from stock clearing activities, together with the declinee of BlackBerry price, although the handset sold continued to grow. The higher of network operation expenses was derived from the t cost of electricity, following the increase of cell sites, an upgrade of HSPA, a cost of preventive maintenance programs and a network cost c for 3G preparations. The increase of o marketing expenses was, mainly, related to higher marketing activities. The rise of YoY normalized profit was mainly from the strong revenue growth, lower costs, but this was offset with higher selling and administrative expenses. The growth of revenue was mainly from both voice and non-voice services. The voice service revenue continued d to grow, especially in prepaid voice revenue that grew considerably 11%, due to a strongg net addition from increased quality prepaid subscribers and more successful price plan. The postpaid also grew from the same period last year due to the increase off quality subscribers. The increase of non-voice service revenue was mainly driven by mobile data as a result for thee trend of smartphone and aircard a adoption, together with social network. The lower costs were from amortization expenses as a result from fullyy amortized assets, even though AIS continues to invest in data network throughout this first half year. In addition, the maintenance costs droppedd as a result of network supplier negotiation on service fee. Although, these were offset with the increase in base rental and utility costs as a result from higher electricity cost and HSPA upgrade. In addition, the 2Q11 other service costs rose fromm 2Q10 due too the rise of call c center and network costs related to t 3G preparations as well as rising regulatory fee from higher international call revenue, apart from a Baht 360 million one-time reversal related to network that booked in 2Q10. The higher of selling and administrative expenses was mainly from staff costs, office maintenance and handset provision, while the bad debt provision improved due to an increase in quality postpaid subscribers. More details are provided in the MD& &A for AIS below. Expenses Total expenses increased 7.8% QoQ from Baht 2,110 million in 1Q11 to Baht 2,275 million in 2Q11, mainly, due to the cost c of sales and services, but relativelyy stable when n compared to the same period last year. Cost of sales and services increased 9.7% QoQ from Baht B 1,403 million in 1Q11 to Baht 1,539 million in 2Q11, primarily from satellite business and cost of DTV, following an increase in DTV sale revenue, but thiss was offset with the decline in cost of telephone networks in foreign entities. The rise of satellite business was, mainly, from cost of UT sale, following an increase off UT sale revenue, and gateway operation fee. Thee decline in cost of telephone networks in foreign entities was, mainly, from interconnects charge in Cambodia, but this was offset o with the increase in network depreciation arising from the expanded telephone networks, in Laos. However, when compared c YoY, cost of sales and services dropped slightly from Baht 1,610 million in 2Q10, as a result from a costt of telephonee networks in foreign entities and cost of satellite dish, following a decrease in satellite dish sale revenue, especially, from Thailand, although, this was offset with the increase in cost of satellite business. The cost from f telephone networks in i foreign entities decreased, of which, in Cambodia, there were lower electricity bills due to improved energy efficiency at the base station and a drop of interconnect charge. However,, in Laos, the cost of international roaming rose, together with an increase in network depreciation arising from the expanded telephone networks. Furthermore, the appreciation of thee baht that mentioned above resulted to the decrease in cost of sales s and services derived from the kip and a the US dollar financial statement translation to the baht. Thee increase in cost of satellite business was as a result from a rise of UT sale revenue of IPSTAR and gateway operation, although, this was offset with a drop of UT warranty from Australia. The cost of Thaicom conventional satellite decreased as a result from the drop of transponder rental, particularly from digital televisionn global operators. Page 6 of 20

7 Operating agreement fees from the satellite business and telephone networks in i foreign entities increased slightly QoQ and 17.9% YoY. These were mainly m as a result of an increase in revenue from IPSTAR bandwidth, although this was offset by a decrease in revenue from telephone networks in Cambodia. Administrative expenses increased slightly QoQ from Baht 379 million in 1Q11 to Baht 393 million in 2Q11 and increased 26.7% YoY from Baht 310 million in 2Q10, primarily from the satellite business. The QoQ increased from provision for obsolete stock and professional fee of satellite business and telephone networks business in Cambodia. However, this was offset with the drop in bad- from debt provision and staff costs c of satellite business, together with the decrease of staff costs telephone networks business in Laos. The YoY increased from staff costs and d provision forr obsolete stock of satellite business. Net foreign exchange loss wass Baht 9 million in 2Q11, Baht B 14 million in 1Q11 and Baht 22 million in 2Q10 as a result from the depreciation of the US dollar. This was primarily resulted from the translationn of assets in foreign f subsidiaries. Profit beforee finance costs and tax As a result of the foregoing items, the profit before finance costs and tax increased 7.5% QoQ from Baht 2,549 million in 1Q11 to Baht 2,741 million in 2Q11 and a increased 41.7% YoY from f Baht 1,935 million in 2Q10. Finance costs The finance costs were, mainly, from satellite business. The T finance costs of 2Q11 remained the same when compared to last quarter but decreasedd YoY from Baht B 132 million in 2Q10 to Baht 121 million in 2Q11. Income tax There was an income tax of Baht 17 million in 2Q11, following f the operating profit in the satellite business, while there were tax surplus of Baht 13 million inn 1Q11 and Baht 36 million in 2Q10 resulted from the operating loss in the satellite business. Net results attributable to non-controlling interests The losses from subsidiaries shared to non-controlling interests in the amount off Baht 61 million in 2Q11, Baht 138 million in 1Q11 and Baht 89 million in i 2Q10, following the consolidated loss in the telephone networks in foreign entities. In addition, the loss of ITV approximately Baht 50 million was allocated to non-controllingg interest in each of the quarter, according to revised TAS that effective on January 1, Profit attributable to owners of the Company As a result of the foregoing items, our net results improved from Baht t 2,579 million in 1Q11 to Baht 2,663 million in 2Q11 and increased considerably from Baht 1,928 million in 2Q10. 1H11 compared to 1H10 Total revenue Total revenue increased 15.6% % from Baht 8,372 millionn in 1H10 to Baht 9,675 million in 1H11. Revenue from sales and services of 1H11 was stable. However, there was an offset between the increase of revenue from satellite business that rose 11.2% from Baht 2,370 million in 1H10 to Baht 2,634 million in 1H11, and the decrease of revenue from telephone networks in foreign entities that dropped 27.0% from Baht 815 million in 1H10 to Baht 595 million m in 1H11, together with other revenue that dropped 18.9% %. Revenue from f telephone networks in foreign entities in Cambodia and Laos decreased 27..0% from Baht 815 millionn in 1H10 to Baht 595 million in 1H11. This was primarily due to high competition in both Laos and Cambodia and the appreciation of the baht t against the kip and the US dollar, as Laos and Cambodia had reported their financial statements in the kip and the US dollar, Page 7 of 20

8 respectively. The decline was derived from the kip and the US dollar financial statement translation to the baht. In Laos the total number of telephone subscribers, bothh mobile and fixed-line, f increased 12.1% from f 1.40 million in 1H10 to 1.57 million in 1H11, due to a growth in the mobile GSM prepaid subscribers. However, the prepaid mobile m ARPU decreased duee to a high competition and a change in customer behavior tending towards multiple SIM ownership. The ARPU of PSTN decreased slightly from the same period last l year as a result from a change in customer behavior. In Cambodia the total number of subscribers decreased 16.7% from f 0.66 million in 1H10 to t 0.55 million in 1H11, primarily due to a decreasee in the mobile prepaid subscriber. This was due to the high competition, especially pricing. The mobile ARPU decreased as a result from promotion campaign and the trend that customer hold multiple SIM ownership, which was resulted to a drop in average minutee of usage perr subscriber. Satellite revenue increased 11.2% from Baht 2,370 million inn 1H10 to Baht 2,634 million in 1H11, primarily from the revenue from IPSTAR bandwidth usage,, particularly in, India, Japan, Australia, Malaysia, Myanmar, Cambodia and New Zealand. In addition, as a resultt from the bandwidth usage revenue from f Japanesee customer that had been recognized in full amount, rather than 50% as mentioned above. While Thaicom s conventional satellite remained stable. Media and advertising revenues increased slightlyy from Baht 466 million in 1H10 to Baht 481 million in 1H11, primarily fromm an increasee in customers advertising expenditure, especially from AIS group. Other revenues decreased due to lower satellite dish and equipment sales by DTV. By the end of 2Q11, DTV s accumulated a sales volume was 1.07 million sets. However, this was offset with the increase in satellite dish sale in Cambodia. Share of profits of associates increased 30.8% from Baht 4,307 millionn in 1H10 to Baht 5,632 million in 1H11, mainly contributed by AIS group. In 1H11, the net profit of the standalone AIS Group was Baht 12,385 million, an increase of 17.1% from Baht 9,834 million in 1H100 (not including the adjustment to derivatives and intercompany gain made by the Company to its share of profits from AIS Group s results). Inn 1H11, the normalized profit, after excluding goodwill impairment on DPC, was Baht 13,157 million, an increase of 24.4% from the normalized profit of Baht 10,574 million in 1H10. The increase in normalized profit of 1H11 was mainly due to the strong growth of voice and non-voice revenue, stablee cost of services although these were w offset by higher selling and administrative expenses. In 1H11, the solid growth in non-voice revenue was from the mobile data, driven by both strong usage and data subscriber growth. In addition, voice revenue increased mostly from the prepaid service while and thee postpaid service stable. The T strong growth of voicee services were mainly from higher usage of calling minutes. Furthermore, inn 1H11, sales margin fell from 1H10, mainly due to the change of RIM s BlackBerry distribution policy. The cost of services was relatively stable with the drop off amortizationn as the fully amortized portion of 1H10 assets was larger than they were in 1H11. However, the base rental and utility costs, maintenance expense and other costs rose, according to 3G preparation costs and increased regulatory r fee. The key increase in selling and administrative expenses was from higher staff costs, office maintenance and handset provision. However, the bad debt provision improved due to quality postpaid subscribers. More details are provided in the MD&A for AIS below. Expenses Total expenses decreased 4.4% %, from Baht 4,586 millionn in 1H10 to Baht 4,385 million in 1H11. Cost of sales and services decreasedd 8.7% from Baht B 3,224 million in 1H10 to Baht 2,942 million in 1H11, primarily duee to lower costs in the satellite s business after thee drop of transponder rental, particularly from digital television global operators. Costs related to satellite dish dropped following the sales revenue, while cost of telephone networks in foreign entities decreased Page 8 of 20

9 from lower electricity bills due to improved energy efficiency at the base station and a drop of interconnect charge in Cambodia. But this was offset with the rise of international roaming costs, together with an increase in network depreciation arising from the expanded telephone networks in Laos. Furthermore, the appreciation of the baht resulted to the decrease in cost of sales and services, as Laos and Cambodia had reported their financial statements in the kip and the US dollar, respectively. The decline was derived from the kip and the US dollar financial statement translation to the baht. Operating agreement fees from the satellite business and telephone networks in i foreign entities increased by 12.4% from 1H10, mainly as a result of ann increase in revenue from IPSTAR bandwidth, although this was offset by a decrease in revenue from telephone t networks in Cambodia. Administrative expenses increased 15.0% from Baht 671 million in 1H10 to Baht 772 million in 1H11, primarily from the satellite business due to an increase in staff costs and provision for obsolete stock. Net foreign exchange loss wass Baht 23 million in 1H11 compared c to Baht 51 million in 1H10 as the depreciation of thee US dollar. This was a result from the t translation of assets in i foreign subsidiaries. Profit before finance costs andd tax As a result of thee foregoing items, the profit before finance costs and tax increased 39.7% from Baht 3,786 million in 1H10 to Baht 5,290 million in 1H11. Finance costs The finance costss decreased slightly from Baht 258 million in 1H10 to Baht 242 million in 1H11. Income tax There was an income tax expense of Baht 4 million in 1H11, followingg the operating profit in the satellite business. However, in IH10, there was an income tax benefit b of Baht 62 million as a a result from operating loss of the satellite s business. Net results attributable to non-controlling interestss The losses from subsidiaries s contributable to non-controlling interests in the amount of Baht 199 million and Baht 183 million in 1H11 and 1H10, respectively, following the consolidated loss in the telephonee networks in foreign entities. In addition, the 1H11 loss l of ITV approximately Baht 100 million was allocated to non-controllingg interest, according to revised TAS that effective on January J 1, Profit attributable to owners of the Company As a result of thee foregoing items, our net results improved considerably from Baht 3,773 million in 1H10 to Baht 5,242 million inn 1H11. Page 9 of 20

10 Consolidated Financial Position The following table provides the consolidated financial position for f the periods indicated. This table should be read in conjunction with the t consolidated financial statements. Cash & cash equivalents and current investment... 4,995.4 Other current assets... 1,949.0 Investments in associatess... 18,722.9 Property and equipment, net.. 5,969.5 Property and equipment under operatingg agreements, net 13,508.2 Other non-current assets.... 3,199.7 As at June 30, 2011 December 31, 2010 (Restate) (in millions of Baht) B (inn millions of Baht) 10.3% 4, % 9 4.0% 2, % % 18, % 12.4% 5, % 28.0% 14, % 6.6% 3, % 6 Total assets... 48, % 1 47, % Total current liabilities... Long-term borrowing... Other liabilities... Total liabilities... Equity attributable to owners of the Company..... Non-controlling interests..... Total equity , , , , , , % 8, % 15.3% 7, % 1.0% 35.7% , % % 46.8% 22, % 17.5% 8, % 64.3% 30, % Total liabilities and equity , % 1 47, % Assets As at June 30, 2011, the cash & cash equivalents and current investment totaled d Baht 4,995 million, an increase of 15.2% from December 31, 2010, mainly due to 1H11 operational gains, even though there was some cash invested in property and equipment. The investments in associates increased from 1H11 share of profit, but this was offset with thee dividend that was paid from associates. The net consolidated property and equipment increased 12.3% as there was an additional investment in assets under construction, but net with the depreciation. The net consolidatedd property and equipment under operating agreements dropped slightly due to amortization in the telecommunications in foreign entities and the satellite businesses. Liabilities As at June 30, 2011, the consolidated liabilities had risen slightly, mainly m due to o a short-term loan from financial institutions for the satellitee business. Equity The consolidated equity increased fromm December 31, 2010, primary due too operational results of 1H11, but this was offset with the dividend paid of Baht 4,899 million. Page 10 of 20

11 Consolidatedd Cash Flow* The following table summarizes our consolidated cash flow for the periods indicated: For F the six-month ended Junee 30, (Restated) (in millions m of Baht) (in millions of o Baht) Net cash provided by operating activities... Net cash used in investing activities... Net cash used in financing activities... Net increase in cash & cash equivalents and current investment... Cash & cash equivalents and current investment at beginning of period... Effects of exchange rate changes on balances held in foreign currencies... Cash & cash equivalents and current investment at endd of period... 6,450.7 (987.1) (4,804.7) , , , (344.4) (10,799.7) , , *Cash flow comprises cash & cash equivalents and current investment. As at June 30, 2011, consolidated cash & cash equivalents and current investment totaled Baht 4,995 million, an increase of Baht 659 million (excluding the effects of exchange rate changes on balances held in foreign currencies) from the end of 2010, while the consolidated cash & cashh equivalents and current investment as at June 30, 2010 had increased by Baht 650 million since the end of Net cash flows provided by operating activities The consolidated cash flow provided by operating activities was Baht 6,451 million, a decrease of 45.3% from 1H10, mainly due to a decrease of dividendd received from AIS. In 1H10, there was a special dividend paid from AIS. Net cash flows used in investing activitiess In 1H11, net cash used in investing activitiess was Baht 987 million, an increase of 186.6% when compared to 1H10, as a result from a higher investment in property and equipment. Net cash flows used in financing activitiess The consolidated cash flows used in financing activities amounted to Baht B 4,805 million, a decrease from 1H10, mainly from lower dividendd payment than what was paid in 1H10, which included a speciall dividend payment. Disclaimer This document contains certain forward-looking statements which refer to future events and the future financial performance of the companies in Shin Group. Forward-looking statements can generally be identified by the use of forward-looking terminology such as may, will, expect, intend, estimate, anticipate, believe or continue.although the companies in Shin Group believe that the expectations reflected in such forward-looking statements s are reasonablee at this time, it can give no assurance that such expectations will prove to be correct.given these t uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Page 11 of 20

12 ADVANCED INFO SERVICE PLC. 2Q11 Management discussion and analysis OVERVIEW In 2Q11, service revenue overcame industry low seasonality with stronger than expected voice revenue and fast growing non-voice revenue. Benign market competition and positive consumer sentiment led to strong voice revenue growth, 8.2% YoY and 0.6% QoQ. During the past three years, Q2 compared to Q1 voice revenue decreased between 0.7% and 1.7%, claimed as a seasonality effect. Prepaid voice revenue continued to grow due to regional market growth and more successful price plans while postpaid voice revenue was stable. Subscriber quality was enhanced by streamlined acquisition policy, focusing on customer retention rather than acquisition. Non-voice revenue, contributed 19.6% to service revenue, grew 29% YoY and continued to grow due to higher smartphone sales, socialnetworks popularity and strong internet demand. Because of the growing popularity in smart devices, sales revenue increased substantially 79% YoY, resulting in 17% YoY total revenue growth. In 1H11, service revenue, excluding IC, grew 11% primarily from voice services, followed by nonvoice services. As a result, AIS has been revised service revenue target, excluding IC, up to high single-digit growth and expects full year sales revenue to grow 50%. Rational competition is expected in rising data market. In 2H11, 3G services are expected to be launched by various mobile operators. However, we believe the data pricing competition would be rational and the fair usage policy tends to be applied. On the other sides, operators are likely to focus on 3G coverage expansion and quality of services. By launching 3G service on 900MHz, AIS emphasizes our commitments to deliver Quality DNAs philosophy. AIS customers can experience seamless connection through integrated quality network which includes 3G, EDGE+ and WiFi. The higher speed and capacity of 3G technology allow us to enhance the richer contents and various applications e.g. AIS Bookstore, AIS Music Store, AIS App Store. As demand for mobile internet enlarges, we expect the mobile data revenue continuing to be a key driver of revenue after its significant growth of 64% YoY in 1H11. 1H11 EBITDA increased 11% from strong revenue growth offset by higher cash OPEX from 3G-900MHz preparation. The cost efficiency was still maintained. Excluding extra item, percentage of cash OPEX to service revenue, excluding IC, was 18.4% and remained the same to 1H10. Consolidated EBITDA margin decreased due to larger contribution from sales which have lower margin than services. However, excluding extra item, service EBITDA margin improved from 49.1% in 1H10 to 49.7% in 1H11. For FY11, we remained EBITDA margin guidance at 45%. In 2H11, positive momentum is expected to continue. Service revenue is expected to grow from prepaid voice service and non-voice service, especially after 3G-900MHz network and new applications launched. Smart device popularity has continued to drive sales revenue. EBITDA figure will grow but margin is expected to decrease due to the low margin handset sales, data capacity expansion and marketing campaigns, all related to the 3G-900MHz. CAPEX guidance remains at Bt10bn and expected to ramp up in 2H11. OPERATIONAL HIGHLIGHTS Prepaid In 2Q11, prepaid subscribers increased to 29.3mn, an increase of 8.6% YoY and 1.7% QoQ, representing 495k net addition from 1Q11. The increased subscribers largely came from regional markets and internet SIM. The prepaid ARPU was Bt200, representing an increase of 5.3% YoY but a decrease of 1.5% QoQ. The YoY increase was due to higher usages and non-voice growth while QoQ ARPU improved from a normal decrease of 3%-6% during the past three years. The prepaid MOU was 299 minutes, representing an increase of 9.5% YoY but a slight decrease of 0.7% QoQ. The YoY increase was due to tariff plans encouraging higher usage. Prepaid RPM was Bt0.65, representing a decrease of 3.8% YoY and a slight decline of 0.4% QoQ. The YoY decrease was due to the buffet-styled tariff plans, stimulating usage during off-peak hours. Prepaid churn was 4.7% compared to 4.7% in 2Q10 and 4.4% in 1Q11. Postpaid Postpaid subscribers slightly increased from 3.10mn in 1Q11 to 3.14mn in 2Q11, an increase of 5.6% YoY and 1.3% QoQ. The net addition was 39k, compared to 51k last quarter. Though lower net addition, the postpaid ARPU was Bt617, an increase of 2% YoY and 0.2% QoQ, due to strong non-voice demand and increased quality subscribers. The postpaid MOU was 529 minutes, an increase of 4.1% YoY and 0.6% QoQ. Both increments were due to the buffet tariff plans. As a result, postpaid RPM was stable at 1.24 but dropped from 1.27 in 2Q10. The YoY decrease was due to the buffet tariff plans as well. Postpaid churn was 1.7%, stable to 1.6% in 1Q11 but improved from 2.2% in 2Q10 due to increased quality subscribers. SIGNIFICANT EVENTS Impairment loss from DPC goodwill of Bt386m recognized in 2Q11 - In 2Q11, the AIS Group recorded in the income statement for the period a Bt386m impairment loss of goodwill on DPC, a subsidiary operating mobile service on GSM 1800MHz. Such item is not tax deductible, unrecoverable and is non-cash expense. The effect on the AIS Group s consolidated financial statements ending 30 June 2011 as following: Recognized impairment loss on DPC goodwill of Bt386mn on the income statement, by discounting expected future cash flow method and compared with its carrying value of Bt1,156mn. Outstanding DPC goodwill booked under intangible asset as of 30 June 2011 was Bt770mn. Advanced Info Service Investor Relations Tel investor@ais.co.th Page 12 of 20

13 ADVANCED INFO SERVICE PLC. 2Q11 Management discussion and analysis FINANCIAL RESULT Table 1 Revenue (Bt million) / (% to total service revenue excluded IC) 2Q10 1Q11 2Q11 YoY QoQ Voice revenue 16, % 17, % 17, % 8.2% 0.6% Postpaid (voice) 4, % 4, % 4, % 0.5% 1.2% Prepaid (voice) 11, % 13, % 13, % 11.0% 0.4% Non-voice revenue 3, % 4, % 4, % 28.8% 4.0% International roaming % % % 25.3% -11.8% Others (IDD, other fees) % 1, % 1, % 17.3% -6.9% Total service revenue excl. IC 21, % 23, % 23, % 12.5% 0.5% Table 2 Sales (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Sales revenue 1, % 3, % 3, % 79.3% -3.7% Cost of sales 1, % 3, % 3, % 91.1% -1.8% Net sales % % % 21.5% -16.0% Sales Margin (%) 17.0% 13.2% 11.5% Table 3 Interconnection (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Interconnection revenue 3, % 3, % 3, % 11.9% -0.7% Interconnection cost 3, % 3, % 3, % 8.8% 0.4% Net interconnection 8 0.0% % % % -27.0%. Table 4 Cost of services ex IC and sales (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Network amortization 4, % 4, % 4, % -6.8% -1.0% Base station rental & utility % % % 11.9% 9.8% Maintenance % % % -2.9% 10.6% Other cost of services % % % 166.3% 5.2% Total cost of services ex IC 6, % 6, % 6, % 5.5% 1.7% Revenue sharing expense 5, % 5, % 5, % 12.0% 1.6% Table 5 SG&A (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Marketing expense % % % 1.1% 23.7% General administrative & staff cost 1, % 1, % 1, % 10.1% -1.1% Bad debt provision % % % -20.8% 7.7% Depreciation % % % -6.6% -3.4% Total SG&A 2, % 2, % 2, % 5.3% 4.3% % Bad debt to postpaid revenue 3.2% 2.2% 2.3% Table 6 EBITDA (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Operating Profit 7, % 9, % 9, % 22.2% -3.1% Depreciation of PPE % % % -11.5% -14.1% Amortization 4, % 3, % 3, % -5.8% 1.5% (Gain)/Loss on disposal of PPE % 0 0.0% % 46.8% N/A Management Benefit % % % 16.2% 50.3% Other financial cost % % % -19.8% 33.1% EBITDA 12, % 14, % 13, % 11.3% -2.5% Table 7 Financial cost (Bt million) / (% to total revenue) 2Q10 1Q11 2Q11 YoY QoQ Total financial cost % % % 0.9% 2.9% Advanced Info Service Investor Relations Tel investor@ais.co.th Page 13 of 20

14 ADVANCED D INFO SERVICE PLC. 2Q11 Management discussion and analysis Revenue Service revenue excluding IC was Bt23,910mn, an increase of 12.5% YoY and 0.5% QoQ. The increasee was due to the growth in both voice and non-voice services. Voice-data cannibalization was not evident as voice usage continued to grow, especially in prepaid p and regional markets. International roaming revenue recovered YoY (afterr the political unrest in 2Q10) but was pressured by b discounting from foreign operators and low seasonality in QoQ. The IDD service grew YoY due to successful marketing campaigns but decreased d QoQ due to seasonality. Voice revenue was Bt17,567mn in 2Q11 which epresents an increase of 8.2% YoY and 0.6% QoQ. The YoY growth was due to a stable economic climate, positive consumer sentiment and mild competition. The QoQ growth,, overcoming Q1-Q2 seasonal effects, was due to growth from both prepaid and postpaid segments. Prepaid voice revenue stood at Bt13,181mn, which grew considerably by 11% YoY and 0.4% QoQ due to a strong net addition from increased quality prepaid subscribers, regional market growth and more successful price plans. Postpaid voice revenue was Bt4,386mn, which rose slightly 0.5% YoY and 1.2% QoQ due to the increase of quality q subscribers. In 1H11, voice revenue jumped considerably by 7.5% YoY, largely from a 10% YoY increase in prepaid voice and stable postpaid voice revenues. The strong growth of voice service was driven by higher usage of calling minutes while dataa usage is also gaining g momentum. Non-voice revenue was Bt4,694mn, representingg an increase of 29% YoY and 4% QoQ. Both increasess were mainly driven by mobilee data which significantly grew 71% YoY and 18% QoQ. Smartphonee and aircard adoption coupled with social networkingg trend continued to drive demand for mobile internet. The demand also expanded to lower end users as feature phones were replaced by b more affordable smartphones. Apart from metropolitan area, smartphone and aircard users continued to increase their usage in regionall areas due to limited coverage of fixed-line at 27% YoY, representing 19.3% to service revenue, excluding IC,, compared to 16.8% last year. Non-messagingg service contributed 13. 5% to service revenue, excluding IC, from 10.7% 1 in 1H10.. The internet. In 1H11, non-voice posted a strong growth revenue streams were mainly driven by mobile data which posted d 64% YoY, driven by both strong usage and data subscriber growth. Data subscribers reached 7.7m, an increase of 38% YoYY whereas usage per subscriber grew significantly by 89% YoY. For full year, AIS expects non-voice revenue to grow 25-30% %. International roaming was Bt633mn and increased 25% YoYY but decreased 12% QoQ. In 2Q11, tourist arrivals jumped noticeably 52% YoY after the political unrest last year. QoQ, thee drop in IR revenue was due to low tourist season. In 1H11, roamingg revenue grew 14% YoY driven by healthy global economy. Moving into 2H11, while tourist arrivals are expected to improve YoY, price pressure remains prevalent as well as the availability of substitute products e.g. VOIP, chat, and use of local prepaid SIM when roaming. However, international data roaming usage is expected to increase as AIS promotes more attractive data roaming packages. Other service revenues, mainly comprised of international call,, was Bt1,017mn, representing an increase of 17% YoY but a decrease of 6.9% QoQ. The YoY growth was from rising subscriber for international call services due to successful marketing campaign in early QoQ, revenues dropped because of seasonality impacts for international call services. In 1H11, other service revenue expanded 10% YoY. Sales revenue stood at Bt3,429m, rose considerably 79% YoY, but dropped 3.7% QoQ. Q The YoY increase was underpinned by strong demand for smartphone i.e. BlackBerry, iphone4, Andriod based phones and aircards as well as higher penetration of low-end device market. In particular, customer r demand for both high-end and low- the end devices continued to rise not only in Bangkok but also upcountry market. Although unit of sales continued to grow QoQ, the revenue was offset by lower price of low-end handset from stock clearing activities a coupledd with decliningg price of BlackBerry handset. In 1H11, sales revenue rose by 86% from f rising consumer trend in using smartphones and aircards. Sales margin in 2Q11 declined to 11.5% from 17% % in 2Q10, andd 13.2% in previous quarter due to lower margin of BlackBerry and stock clearing. In 1H11, sales margin fell to 12.4% from 16.7% last year mainly due to the change off RIM s BlackBerry distributionn policy in 2H10. Net IC receipts were Bt112mn, a significant rise compared to Bt8mn in 2Q10 but declined d from Bt153m in 1Q11. YoY, the substantial growth was due to recording thee interim rate of IC between AIS and HUTCH-CAT at Bt0.50 perr minute since 3Q10. However, QoQ, the downtrendd of net IC receipts was a result of lower net IC receipts r from HUTCH-CAT. Also, outgoing traffic increased whilee incoming traffic declined as a result of popular all network promotion. For 1H11,, Net IC receipts stood at Bt265mn, increased from Bt66mn last year due to IC receipt from Hutch-CAT. Cost of Service and Sales Revenue sharing expense was Bt5,888mn, an increase of 12% YoY and 1.6% % QoQ, in line with service revenue r growth. AIS revenue share is 30% on postpaid and 20% on prepaid while revenue share for DPC will risee from 25% to 30% in September this year. We expect this to have minimal impact. Network amortization was Bt4,314mn, a decrease of 6.8% YoY and 1% QoQ. Though AIS continues to invest in data network throughout this year, the fully amortized portion of previous assets remains larger than amortization of new assets. For FY11, network amortization is likely to declinee by 5%. Base rental and utility cost stood at Bt759mn, an increase of 12% YoY and 9.8% QoQ which resulted from higher electricity cost and HSPA upgrade. In 2Q11, number of cell sites reached 16.2k, comparing to 15.9k 1 in 1Q11 and 15.5k in 2Q10. 2 In 1H11, base rental and utilityy cost grew 5.8% % YoY. Maintenance expense e was Bt358mn, representing a decrease of 2.9% YoY but an increase of 10.6% QoQ. The YoY decrease was due to network supplier negotiation on service fee. The QoQ increase was due d to planned preventive maintenance. In 1H11, maintenance expense increasedd to Bt681mn from Bt675mn due to preventive maintenance programs. Other cost of services was Bt922mn, an increase of 166% YoYY and 5.2% QoQ. YoY, the considerable increase was caused by a one- one-time reversal item, other service costs grew 31% YoY resulted from call centerr and network cost related to 3G preparation as well time reversal related to network of Bt360mn in 2Q10. Excluding as rising regulatory fee from higher international call revenue. The 5.2% QoQ increase was due to network cost for 3G preparation. For 1H11, excluding one-time reversal item, other cost of services grew 18% YoY according to 3G preparation cost andd increased regulatory fee. Advanced Info Service Investor Relations Tel investor@ais.co.th is.co.th Page 14 of 20

15 ADVANCED D INFO SERVICE PLC. 2Q11 Management discussion and analysis Expense Marketing expense was Bt630mn, an increase of 1.1% YoY and d 24% QoQ. The QoQ increase was related to seasonal activities. For 1H11, marketing spending was 1.8% of total revenue compared c to 1.7% in 1H10. For full year, AIS expects to spend in a range of 2.5-3% off total revenue. General administrative and staff expensess were Bt1,808mn, representing an increase of 10% YoY but a decrease of 1.1% QoQ. The YoY increase was due to higher staff cost, office maintenancee and handset provision. The QoQ decrease was due to lower staff cost and lower handset provision offset by higher office IT maintenance expenses. Bad debt provision was Bt142mn, representingg a decrease of 21% YoY but an increase of 7.7% QoQ. The YoY decrease was duee to a healthy increase in quality postpaid subscribers and further positive improvement in consumer sentiment. The QoQ increase was due to higher usage and subscribers base. The ratio of bad debt expense to postpaid revenue was 2.3%, improving from 3.2% in 2Q10, and stable compared to 2.2% in 1Q11. In 1H11, bad debt provision decreased 19% YoY due to quality of subscribers and continuing positive consumer sentiment. Foreign exchangee gained Bt11mn compared to Bt10mn loss in 2Q10 and Bt18mn gain in 1Q11. AIS manages to minimize its exposure to the foreign exchange by using financial instruments such as forward contracts. Finance cost was Bt444mn, a slight increase of 0.9% 0 YoY and 2.9% QoQ while debt level declined. For 1H11, the finance cost was Bt875mn and stable -0.2% YoY due to the lower debt d level. Goodwill impairment was Bt386mn. After impairment of DPC goodwill in 2Q11,, the remaining DPC goodwill on balance sheet is Bt770mn. The DPC goodwill is subjected to an impairment test at the end of each reporting period. The DPC impairment was due too the shorter remaining time of the BTO contract of DPC. Profit EBITDA was Bt13,975mn, B representing an increase of 11.3% YoY but a reductionn of 2.5% QoQ. The YoY growth resulted from healthy revenue growth, partially offset byy one-time network related item, higher staff cost and electricity cost. QoQ, EBITDA fell due to higher h marketing spending, electricity e cost and administrative expenses. In 1H11, EBITDA was Bt28,311, an increase of 11..3% YoY due to strong revenue growth offset by higher cash OPEX. EBITDA margin was 44.9% compared to 47.3% in 2Q10, resulted from lower sales margin and larger sales contribution, as well as one-time network related item. QoQ, EBITDA margin decreased from 46% in 1Q11 mainly due to higher marketing spending and lower handset sales margin. In 1H11, EBITDA margin fell to 45.5% from 47.5% last year due to dilution from handset business margin and one-time networkk related item.. Excluding handset business and one-time extra item in 2Q10, EBITDA margin from service business was 49.7% improved from 49.1% in 1H10. For FY11, EBITDAA margin target remains at 45% Other operating income, which mainly came from interest income, was Bt215mn and a increased 54% YoY and 40% QoQ. The interest income increased due to a higher cash level andd higher interest rate. Net income was Bt6,116mn and increased 26% 2 YoY due to the strong revenue growth and lower amortization expenses offset by higher cash OPEX. Net Income dropped 2.4% QoQ due to lower sales margin, higher networkk OPEX and marketing expenses. Excluding the DPC D goodwill impairment, normalized net profit was Bt6,502mn andd rose 25% YoYY but dropped 2.3% 2 QoQ. In 1H11, normalized net income increased 24% YoY from strong revenue growth and stable cost of services offset by higher SG&A expenses. Table 8 Consolidated (Bt million) Wheree 2Q10 1Q11 2Q11 YoY QoQQ Net income 4,870 6,269 6, % 2.4%% Add:Impairment of DPC goodwill Impairment loss Normalized net income 5,220 6,654 6, % 2.3%% FINANCIAL POSITION Total Asset was Bt103,431mn and decreased from Bt107,985mnn in 1Q11 largely due to the network amortization and the Bt11,666mn cash dividend payment in 2Q11. The fixed assett was Bt49,168mn and decreased from Bt51,957mn in 1Q11 as new n CAPEX was smaller than network amortization. Cash was Bt27,925mn and dropped from Bt29,930mn in 1Q11 because the Company paid the cash dividend but compensated by Bt25,989mn cash generated from operation. Liquidity in term of current ratio improved from 0.83 in 1Q111 to 1.02 in 2Q11 because the cash level increased andd dividend payable items was paid in 2Q11. Inventories was Bt1,162mn and decreased from Bt1,264mn in 1Q11 mainly due to handset stock clearance. Inventory turnover t was 2.5, a slight decrease from 2.8 in 1Q11 but an improvement from 1.88 in 2Q10 due to smartphone popularity. Interest bearing debt d was Bt34,954mn, declining from the level at the end of 1Q111 due to the repayment of Bt247 during 2Q11. Average cost of debt stayed at 4.8%. In 2H11, a debenture, d amounted Bt4bn, will mature in 3Q11 and a syndicated loan, amounted Bt9,731mn, will mature m in 4Q11. Equities was Bt42,150mn and rose from Bt35,931mn in 1Q11 due to higher retained earnings. Unappropriated retainedd earnings increased from Bt9,693bn inn 1Q11 to Bt15,810bn in 2Q11. Capital structures remained healthy. Net debt to equity was 0.17 and net debt to EBITDA was The gearing ratio r decreased from 1Q11 due to the higher h cash level. In 1H11, return on equity (ROE) stood at 67% and improved from 31% in 1H10 due d to the higher net income and thinner retained earnings after the capital management in 1H10. Advanced Info Service Investor Relations Tel investor@ais.co.th is.co.th Page 15 of 20

16 ADVANCED D INFO SERVICE PLC. 2Q11 Management discussion and analysis Table 9 Financial Position Cash (Bt Million) / (%( to total asset) ) 1Q11 2Q11 29, % 27, % % Table 10 Key Financial Ratio Debt ratio 2Q Q11 2Q ST investment % % % Net debt to equity Trade receivable 6, % 6, % % Net debt to EBITDAA Inventories Others Current Asset Networks and PPE 1,264 4,194 41,758 51, % 3.9% 38.7% 1,162 4,522 40, % % 4.4% % 39.3% % 48.1% 49, % % Total liabilities to equity Current ratio Interest coverage DSCR ROE (%) % % 66.6% Goodwill 1, % % % Intangible asset Defer tax asset Others Total Assets Trade accounts payable 2,646 9, ,985 2, % 9.0% 0.6% 100.0% 2,523 9, , % % 9.3% % 0.7% % 100.0% % 2.4% 2, % % Table 11 Debt Repayment Schedule 1Q11 2Q11 3Q11 4Q11 (Bt Million) Debenture Long term loan , ,731 CP of LT loans 15, % 16, % % , Accrued R/S expense Others Current Liabilities 5,510 26,496 50, % 7, % % 24.5% 13, % % 46.6% 39, % % , ,500 2, Tota al interest-bearing debt 35, % 34, % % Total Liabilities 72, % 61, % % Unappropriated retained earning 9, % 15, % % Total Equity 35, % 42, % % C ASH FLOW Free cash flow (EBITDA-CAPEX) was Bt26,294mn and increased 12.6% YoYY for 1H11. The growth was underpinned by the strong revenue growth and low CAPEX. 1H11 CAPEX was Bt2..0bn and below 1H10 CAPEX by 3.7%. However, CAPEX will climb up to the t Bt10bn full year guidance as the Company plans to enhance data capacity through upgrade the network to HSPA and EDGE+ technologies. Table 12 Source and use of fund : 1H11 (Bt. Million) Source of Fund Use of Fund Operating CF before change in working capital Interest received Sale of property and equipment Share capital and share premium Net change in current investment Total 28, ,600 32,869 CAPEX & Fixed assets Finance cost paid Change in working capital Payment of finance f lease Debt repayment Dividend payment Cash increase Total 2,, ,, ,,666 15,,240 32,,869 Advanced Info Service Investor Relations Tel investor@ais.co.th s.co.th Page 16 of 20

17 ADVANCE ED INFO SERVICE PLC. 2Q11 Management discussion and analysis FY Y2011 MANAGEMENT OUTLOOK & STRATEGY (REVISED) FY2011 Revised Guidance Service revenuee excluding IC Data revenue EBITDA margin Capex Service revenue growth, excluding IC, guidance was revised to high single-digit due to a stronger than expectedd first half financial result. In 1H11, service revenue grew 11% and significantly outperformed previous guidance of 4% growth. This was due to a substantial increasee in voice revenue (rather thann remaining constant as previously predicted) while non-voice revenue grew in line with 25-30% growth guidance. The new growth figure was underpinned by growing voice revenues, largely from the prepaidd segment growth in regional markets and successful price plans, whilee non-voice revenue growth remained solid at 25-30%. Handset business continued to be a key tool in shaping the data market. Full year sales revenue is expected to grow by 50% but with lower marginss as more affordable smartphones continue to be launched in 2H11. Data revenue continues to achieve a strong growth at 25-30% in FY11. With limited access of fixed-line internet, mobile data momentum will be encouraged through more affordable smart devices, expansion of lower-end data users, and social networks. n In 2H11, mobile operators are expected to deliver experience of 3G services to their customers. A shoot up dataa speed of 3G, richer content and various applications would enhance customer to spend more time on mobile internet. AIS continued to focus on growing data market by implementing Quality DNAs, quality in all dimensions of services including device, network, application, and services. More smart devices will be delivered to customers in all segments with exclusive packages from AIS. Apart from quality network, AIS also provides seamless connection with 3G, EDGE+, and WiFi. Various type of applications will be developed, in cooperation with strategic partners, to suit the customers lifestyle while support multi-operating systems such as ios, Blackberry, Android. Also, qualityy of service will be ensured by mobile internet consultant to help smart devices users together with 24hrs call center and service centers nationwide. The EBITDA margin target was 45% comparedd to 46.8% last year. The decline caused by dilution effect and larger sales s contribution as High single-digit 25-30% YoY 45% % Bt10bn cash capex (revised up from 4%) (maintained) (maintained) (maintained) well as spending related to 3G-900MHz. in higher proportion of revenue r from handset business. This will w cause lowerr consolidated EBITDA margin as A rising smartphone and aircard adoption resulted handset business generates lower margin thann mobile service. In addition, sales margin has been on a declining trend due to higher competition in handset market. Byy launching 3G in-band coupled with high season of marketing activities in Q4, marketing spending tends to accelerate in 2H and a will reach the expected range of 2.5% to 3% of total revenue. Nett Interconnectionn revenue is revised up in a range of Bt m due to recording IC agreement withh HUTCH. However, the company does not expect the net IC gain to bee sustainable. CAPEX guidance remains at Bt10bn. In 1H11, AIS spent Bt2bn for network capacity expansion and technology upgrade u such as 3G- 900 MHz and EDGE+. The capexx is expected to ramp up in 2H11 to meet the full year guidance off Bt10bn. AIS launched the 3Gdata 900MHz service as an interim solution in July 2011 to cater demand and enhance network capacity in Bangkok and other seven key provinces. In other areas, AIS has continuedd to deploy EDGE+ and expects to cover nationwide by year end. With these investments, AIS network expects to supportt the strong data demand both in metropolitan and provincial areas until 2.1GHz license released. Network amortization is expectedd to decrease byy 5% because some assets were fully amortized. a Company aims to pay dividend at least 100% of net profit. Historically, the company has been paying over 100% during the past four years. The company also aims to pay dividend twice a year, an interim dividend distributed d fromm the first half operating o results, and annual dividend distributed d fromm the second half operating results. Such dividend payment may not t exceed the retained earnings in the Company Financial Statement. The special dividend paid during 2010 was due to the excess level of cashh which preserved for 3G licenses on 2. 1GHz auction. For 2011, thee company continued to maintain flexibility to preserve long-term growth potential. Disclaimer Some statements made in this material are forward-looking statements with thee relevant assumptions, which are subject to various riskss and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, intend, estimate, continue plan or other similarr words. The statements are based on our management s assumptions and beliefs in lightt of the information currently availablee to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements. Advanced Info Service Investor Relations Tel investor@ais.co.th is.co.th Page 17 of 20

18 ADVANCED D INFO SERVICE PLC Management discussion and analysis O OPERATIONAL DATA Subscribers GSM Advance GSM 1800 Postpaid Prepaid Total subscribers Nett additions Postpaid Prepaid Total net additions Churn rate (%) Postpaid Prepaid Blended 2Q09 2,672,200 78,300 2,750,500 25,151,500 27,902,000 87, ,900 3Q099 2,755, ,0000 2,834, ,447, ,282, , ,2000 4Q09 2,835,800 78,900 2,914,700 25,858,200 28,772,900 80, , , % 4.9% 4.7% 380, % 5.0% 4.8% 490, % 5.2% 4.9% 1Q10 2,878,500 78,300 2,956,800 26,552,400 29,509,200 42, , , % 4.7% 4.4% 2Q10 2,898,800 78,400 2,977,200 27,030,500 30,007,700 20, , , % 4.7% 4.5% 3Q10 2,928,100 76,400 3,004,500 27,497,600 30,502,100 27, , , % 4.3% 4.1% 4Q10 2,976,500 76,100 3,052,600 28,148,100 31,200,700 48, , , % 4.4% 4.2% 1Q11 2Q11 3,027,500 3,,056,200 76,100 86,500 3,103,600 3,,142,700 28,847,700 29,,342,300 31,951,300 32,,485,000 51,000 39, , , , , % 1.7% 4.4% 4.7% 4.1% 4.4% Subscriber market share Postpaid Prepaid Total ARPU excl. IC (Bt( 41% 42% 42% 43% 43% 43% 43% 43% N/A N/A N/A GSM Advance GSM 1800 Postpaid Prepaid Blended ARPU incl. net IC (Bt) GSM Advance GSM 1800 Postpaid Prepaid Blended MOU (minutes: billable outgoing only) GSM Advance GSM 1800 Postpaid Prepaid Blended Traffic % outgoing to total minute % on-net to total outgoing minute 48% 48% 49% 78% 79% 79% 48% 80% 47% 80% 49% 82% 49% 82% N/A N/A N/A N/A Advanced Info Service Investor Relations Tel investor@ais.co.th is.co.th Page 18 of 20

19 ADVANCED D INFO SERVICE PLC Management discussion and analysis A ARPU DEFINITION In accordance with international practice, we have adjusted ARPU disclosure to better reflect all revenues generated from the mobile network. We believe the new definition should provide a more transparent representationn of our reported service s revenues and maintain the conservative approachh of recognizing revenue on a net basis. The revenue items included in the calculation of ARPU figures are based on consolidated revenue, according to the Thai accounting standard. The ARPU definition is outlined accordingly. ARPU excludee IC ARPU include IC Definition Consolidated service revenue excludes international call revenues from AIN and interconnection revenues dividedd by an average of subscribers at the beginning and ending period. = Service revenue - AIN revenue - Gross IC revenue (beg.sub + end.sub) / 2 Consolidated service revenue excludes international call revenues from AIN divided by average of subscribers at the beginning and ending period. = Service revenue - AIN revenue - Gross IC revenue + Net IC revenue (beg.sub + end.sub) / 2 Revenue composition Voice Value-added service (call management, SMS, MMS, data) ) International roaming International call via CAT, TOT Others Net interconnectionn revenue International call via AIN (AIS subsidiary) Alll categories are net of third-party sharing and commission Voice Value-added service (call management,, SMS, MMS, data) International roaming International call viaa CAT, TOT Others Net interconnection revenue International call viaa AIN (AIS subsidiary) All categories are net of third-party sharingg and commission From 1Q08 onward, disclosure of ARPU is based on new definition (net all-in) only. Disclosure of ARPU net voice + value-added service is discontinued G GLOSSARY OF TERMS AND DEFINITIONS Operational data Subscriber Postpaid churn Prepaid churn Nett additions ARPU excl. IC ARPU incl. IC MOU Churn rate Voice International roaming IDDD Non-voice (data) Financial data EBITDA margin Interest Coverage DSCR Nett Debt / EBITDA Nett Debt / Equity Interest-bearing Debtt to Equity Total Liabilities to Equity Debt Ratio Free cash flow to EV Free cash flow (FCF) Network OPEX Cash OPEX ROE (%) Number of registered SIM at ending period whose status is not defined as churn Subscribers whose payment status is overdue more than 45 days from due date Subscribers who doo not make a refill within 37 days afterr validity expires Change of number of subscribers and ending period from the beginning period Consolidated service revenue excludess international call revenues r from AIN divided by averagee of subscribers at the beginning and ending period. It includes voice revenue, value-added services, international roaming, international calls and other revenues such as national roaming, broadband b and transmission Including net interconnection (IC revenue IC cost) Number of billed outgoing o minutes generated from voice calls, including international call usage and SMS dividedd by the number of average subscribers Number of subscriber disconnections in the period divided by the sum of gross new subscribers s in the period and the subscribers at the beginning period Any domestic and international voice usage generated by postpaid, prepaid and a corporate subscribers Inbound roaming revenue only (revenue generated by foreign roamers using the AIS network). International call (IDD) and other telecommunication services under subsidiaries. Includes all non-voice services e.g. SMS, MMS, GPRS, ring-back r tone, infotainment and data transmission; excluding call management services e.g. call forward, conference call, call divert Operating profit before depreciation, amortization, and allowance for impairment as a percentage to total revenue Operating profit for the period dividedd by Interest expenses for the period Debt service coverage ratio calculatedd from EBITDA after tax divided by repayment of short-term and current portion of long-term borrowing, debentures and interest paid for the period Short-term and long-term interest-bearing debts minus cash divided by EBITDA Short-term and long-term interest-bearing debts minus cash divided by total shareholder s equity at ending period Short-term and long-term interest-bearing debts divided by total shareholder s equity at ending period Total liabilities at ending e period divided by total shareholder s equity at ending period Total liabilities at ending e period divided by total assets att ending period (EBITDA capex tax) / (market capitalization + book value of net debt) Up to 2009 FCF = Operating Cash Flow after Working Capital CAPEX; From 2010 onward, FCF = EBITDA CAPEX Cost of services excluding amortization & depreciation & IC Network OPEX + SG&A S excluding amortization & depreciation Return to Equity: Annualized net income divided by average equity Advanced Info Service Investor Relations Tel investor@ais.co.th is.co.th Page 19 of 20