Press Release: Total Access Communication PLC 3 October 1996 TRIS assigns an “A” rating to TAC Thai Rating and Information Services (TRIS) announced an “A” rating for Total Access Communication PLC (TAC)’s on 3 October 1996. The rating of TAC, a 72% owned cellular subsidiary of United Communication PLC (UCOM; “A” senior debt rating), is related to its parent’s rating because of their integral, operational and financial interrelationships, and reflects only minor difference in credit quality. The rating is based on the consolidated standing of its parent, UCOM. On a stand-alone basis, TAC’s strengths include market positioning, management and generated cash flows, offset partly by its high debt load and inherent technological and regulatory risks. TAC is the second largest and the fastest growing cellular operator in the country, serving 640,800 customers, a 41% market share. TAC, in 1995, accounted for 41% and 57% of UCOM’s consolidated revenues and earnings. Its business fundamentals have strengthened and operating economics are becoming more favorable as the growing cellular industry becomes more established. TAC enjoyed a 97% compound annual increase in subscribers from 1993 to 1995. Even with this rapid growth, TAC has maintained tight control over its operations and high quality services, as evidenced by a low annual churn rate of 1.1%. TRIS estimates TAC’s subscriber numbers will grow by 50% in 1996 before slowing to 15-20% in 2000. TAC’s competitive advantages include great substantial capacity which may reflect better quality, broader range of handsets and lower-priced handsets. Though TAC’s subscriber shares in analog services have lagged behind its competitor, it holds a strong leading position in digital. In the intermediate term, TAC will benefit further from the accelerated growth of digital expecting that sales will surpass analog in 1998. However, competition will heighten with the emerging third cellular operator and various new technologies such as, PHS, CDMA, PCS 1900, PDC 1500, as well as market liberalization. TRIS expects the new entrants will launch aggressive marketing and promotions which will reduce TAC’s subscriber share. To help support the traffic generated by its high growth strategy during 1994-1996, TAC has engaged in rapid system buildout resulting in a high debt burden growing to over 7,000 million baht in 1995. Despite high debt levels, TAC has maintained high interest coverage ratios hovering around 5 times. In 1995, TAC raised 9,500 million baht from its initial public offering, resulting in a substantially improved financial position with total debt to capitalization at 31% (down from 60%) and cash flows to total debt at 41% (up from less than 20%). Capital spending in the future should be reduced substantially. TAC’s operating income margin was healthy at about 50% and is expected to remain near that level. Maintenance of profitability and anticipated strengthening of balance sheet and cash flow measures are viewed positively for the rating. Note: Total Access Communication PLC: Rating assigned Senior debt: A