TRIS Rating Co., Ltd. has affirmed the ratings of Advanced Info Service PLC (ADVANC) and its senior debentures (AIS073A, AIS07OA, AIS093A, AIS093B, AIS099A, AIS119A, AIS139A) at “AA” with “stable” outlook. The ratings are based on ADVANC’s dominant market position as Thailand’s leading mobile phone operator with an extensive subscriber base and well-recognized brand name. The ratings also take into consideration ADVANC’s capable and professional management team, its strong financial profile, and strong cash generating capability. However, these strengths are partially constrained by the continuation of intense competition among the three major mobile operators, inherent technological risk, and uncertainties related to telecom regulations.
The “stable” rating outlook is based on the expectation that ADVANC will sustain its strong operating performance and continue to pursue a conservative financial policy. In addition, any regulatory policy changes are not expected to adversely impact the company’s competitive advantages and financial performance.
TRIS Rating reported that the number of mobile phone subscribers in Thailand expanded rapidly at an average growth rate of 60% per annum during 1999-2004. The growth rate slowed in 2005 to 12% as mobile penetration rate reached 49% of the total population. However, heavy competitive environment in 2006, including free SIM-cards and price undercutting campaigns, propelled subscriber growth to nearly 30%. The total number of new subscribers was almost twice that of 2005. In 2006, the penetration rate increased to over 60%. The solid subscriber growth was mainly driven by a number of mobile users having multiple SIM-cards and the expansion of the mobile network to capture new users upcountry. The number of mobile phone subscribers are expected to continue growing, though not at the level experienced in 2006, with the penetration rate projected to reach 70% within the next two years.
TRIS Rating said, ADVANC continues to maintain its leader position in the mobile industry with a market share of approximately 50%. As of September 2006, it had 17.7 million subscribers, an increase of 8% from year end 2005. The combination of ADVANC’s experienced and capable management team and sufficient funding sources have enabled the company to provide high quality services through extensive investments in the mobile phone network and internal systems. The company will continue to benefit from its strong brand name, ubiquitous and high quality network, and efficient marketing efforts. With its dominant market position, strong financial profile, and ample financial flexibility to fund new investments, ADVANC should be able to maintain its leading position in the Thai mobile phone industry. ADVANC’s management team has a good track record of dealing with the twin challenges of changing competitive environment and the advent of new technologies. The company has successfully implemented various strategies to create long-term competitive advantages. The company plans to enhance its revenue and profit by increasing the revenue contribution from non-voice services since the penetration rate of mobile phones in Thailand is approaching the saturation point.
ADVANC’s strong financial profile is underpinned by a conservative financial policy and strong cash flow generation. The company’s debt to capitalization ratio was 31.1% at the end of September 2006. Economies of scale and cost control initiatives have allowed the company to keep operating margins before depreciation and amortization above 45% during the last three years. Although the competitive environment is likely to challenge ADVANC’s profitability and cash flows, TRIS Rating views that ADVANC’s financial flexibility provides a sufficient cushion for network investments and dividend payouts. -- End
Advanced Info Service PLC (ADVANC)
Company Rating: Affirmed at AA
Issue Ratings:
AIS073A: Bt3,000 million senior debentures due 2007 Affirmed at AA
AIS07OA: Bt5,000 million senior debentures due 2007 Affirmed at AA
AIS093A: Bt2,500 million senior debentures due 2009 Affirmed at AA
AIS093B: Bt4,500 million senior debentures due 2009 Affirmed at AA
AIS099A: Bt3,427.1 million senior debentures due 2009 Affirmed at AA
AIS119A: Bt4,000 million senior debentures due 2011 Affirmed at AA
AIS139A: Bt4,000 million senior debentures due 2013 Affirmed at AA
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co.,Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.
The “stable” rating outlook is based on the expectation that ADVANC will sustain its strong operating performance and continue to pursue a conservative financial policy. In addition, any regulatory policy changes are not expected to adversely impact the company’s competitive advantages and financial performance.
TRIS Rating reported that the number of mobile phone subscribers in Thailand expanded rapidly at an average growth rate of 60% per annum during 1999-2004. The growth rate slowed in 2005 to 12% as mobile penetration rate reached 49% of the total population. However, heavy competitive environment in 2006, including free SIM-cards and price undercutting campaigns, propelled subscriber growth to nearly 30%. The total number of new subscribers was almost twice that of 2005. In 2006, the penetration rate increased to over 60%. The solid subscriber growth was mainly driven by a number of mobile users having multiple SIM-cards and the expansion of the mobile network to capture new users upcountry. The number of mobile phone subscribers are expected to continue growing, though not at the level experienced in 2006, with the penetration rate projected to reach 70% within the next two years.
TRIS Rating said, ADVANC continues to maintain its leader position in the mobile industry with a market share of approximately 50%. As of September 2006, it had 17.7 million subscribers, an increase of 8% from year end 2005. The combination of ADVANC’s experienced and capable management team and sufficient funding sources have enabled the company to provide high quality services through extensive investments in the mobile phone network and internal systems. The company will continue to benefit from its strong brand name, ubiquitous and high quality network, and efficient marketing efforts. With its dominant market position, strong financial profile, and ample financial flexibility to fund new investments, ADVANC should be able to maintain its leading position in the Thai mobile phone industry. ADVANC’s management team has a good track record of dealing with the twin challenges of changing competitive environment and the advent of new technologies. The company has successfully implemented various strategies to create long-term competitive advantages. The company plans to enhance its revenue and profit by increasing the revenue contribution from non-voice services since the penetration rate of mobile phones in Thailand is approaching the saturation point.
ADVANC’s strong financial profile is underpinned by a conservative financial policy and strong cash flow generation. The company’s debt to capitalization ratio was 31.1% at the end of September 2006. Economies of scale and cost control initiatives have allowed the company to keep operating margins before depreciation and amortization above 45% during the last three years. Although the competitive environment is likely to challenge ADVANC’s profitability and cash flows, TRIS Rating views that ADVANC’s financial flexibility provides a sufficient cushion for network investments and dividend payouts. -- End
Advanced Info Service PLC (ADVANC)
Company Rating: Affirmed at AA
Issue Ratings:
AIS073A: Bt3,000 million senior debentures due 2007 Affirmed at AA
AIS07OA: Bt5,000 million senior debentures due 2007 Affirmed at AA
AIS093A: Bt2,500 million senior debentures due 2009 Affirmed at AA
AIS093B: Bt4,500 million senior debentures due 2009 Affirmed at AA
AIS099A: Bt3,427.1 million senior debentures due 2009 Affirmed at AA
AIS119A: Bt4,000 million senior debentures due 2011 Affirmed at AA
AIS139A: Bt4,000 million senior debentures due 2013 Affirmed at AA
Rating Outlook: Stable
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Copyright 2007, TRIS Rating Co.,Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information.