ADVANC

Reveals its 2015 vision - We attended the ADVANC 2015 vision event on Thursday (Jan. 28). With some 2015 guidance revealed, we believe ADVANC's capex spend is likely to be higher than expected in order to maintain

service quality while we are not overly excited about fixed broadband revenues. However, it looks

like 1800MHz and 900 MHz auctions will happen in 2015 according to the regulator.

Impact

- 2015 guidance: ADVANC plans to spend capex of Bt40bn in 2015 excluding the 4G auction (vs our

forecast of Bt35.5bn). On the sector outlook, ADVANC expects 3-4% service revenue growth (vs our

3.7% growth forecast for ADVANC) on the back of a 5% decline in voice but 200% growth in data.

Device trading should grow by 10% with an estimated 10mn additional smartphone users.

- Still aggressive on 3G rollout: ADVANC aims to install 29,000 3G base stations in 2015, up from

20,000 currently. This is 20% above competitors which is likely to be the target for ADVANC going

forward on network rollout. We believe that this move will not change the competitive environment

in the mobile market significantly.

- Not yet factored in revenue from fixed broadband: ADVANC expects only 100,000 subscribers

in 2015, which is less than 2% of the total broadband users in the market in our view. This should

not trigger a price war in the broadband market. They expect their fiber to pass 10m

households over the next 5 years, which should cover around half of the total households.

- Moving toward becoming a digital service provider: ADVANC aims to provide service to their

customers everywhere, every home and every screen through three key business platforms

wireless: network, fixed broadband and digital services. ADVANC has welcomed business partners to

provide solutions to customers using the company’s platform.

Action and recommendation

- Maintain Outperform. ADVANC’s vision still reflects its focus on network quality, which should help it

remain the leading operator in the market.