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Our products and services should beinclusive – to reach the masses notjust the urban population, and to beaffordable to all; and our talentphilosophy is also based on diversityand inclusiveness.Our focus on developing humancapital is the top of our agenda.Both the Board and Management arevery committed to ensure that wehave not only the best managementteams across the Group, but to alsodevelop future leaders of the Group.In this respect, Axiata will drive amajor Corporate Responsibility (CR)initiative at Group level specificallyaround Education and DevelopingTalent, and at a later stageHumanitarian Efforts, with a collectiveapproach across our OpCos.We could not have come this farwithout the commitment, guidanceand support of our Board,Management and employees, to allof whom I offer my thanks andcongratulations for 2009’s significantachievements.In particular, I would like to recordmy gratitude to the late Ismael FarizAli and acknowledge his part in theearly days of Axiata’s new chapter.I would also like to thank andcongratulate Gita Irawan Wirjawan,our Independent Non-ExecutiveDirector, who had to retire from theBoard when he was appointed Headof Indonesia’s InvestmentCoordinating Agency, which isaccorded ministerial position. Tothese gentlemen, Axiata records ourappreciation for their invaluableleadership and contributions duringtheir tenure with the Group. Thisyear, we also welcomed on boardDr. Farid Mohamed Sani as Director.Further, I thank our customers,partners, the media and ourshareholders for their continuedsupport and trust. As always, specialmention goes to the governmentsand regulators of the OpCo countriesfor their facilitation and cooperation.None of the above would be possiblewithout the dedication andprofessionalism of the Managementand employees of the Group and allits subsidiaries in their relentlesspursuit for operational excellenceand raising the bar for thecompetition.In this aspect, I am especially pleasedto announce that as we go to print,Axiata has won two top awards atthe Telecom Asia Awards 2010 –Axiata for Best Regional MobileGroup and Dato’ Sri JamaludinIbrahim, our Managing Director/President and Group Chief ExecutiveOfficer (President & GCEO) forTelecom CEO of the Year.In addition, our flagship domesticoperator, Celcom Axiata Berhad(formerly known as Celcom (Malaysia)Berhad) won Best Mobile Carrier.These are among the many moreaccolades across the Group and aretremendous acknowledgements andwell deserved, given that it has onlybeen two short years since thedemerger from Telekom MalaysiaBerhad (TM), and only one year sinceAxiata came into being as a newidentity.From being TM International Berhad(TMI), we are now Axiata GroupBerhad. At Axiata, we are constantlyraising the bar and will continue withour transformation into a regionalchampion by 2015. It thus gives megreat pleasure to present Axiata’sAnnual Report 2009.TAN SRI DATO’ AZMANHJ. MOKHTARCHAIRMAN30 April 2010Annual Report 2009 015

Axiata Group Berhad 016ExecutiveDatMoanagingPresident’SriJamaluD& irectordGroup inIbra/Chief himfficerOChairman’s Statement

President & GCEO’sBusiness ReviewDear Shareholders,2009 has been nothing short of another milestone year for us –this is the year we came together as a new brand and a newidentity, as Axiata Group Berhad, and as the Axiata family unitedwith a common logo, our Prism. The vibrant energy that camewith this new start has yielded commendable results for us – inthe short 12 months since then, and indeed since the demerger,we have proven that Axiata means business.Revenue up15.5%YoYAnnual Report 2009 017

President & GCEO’s Business ReviewClearly the hard work is paying off– in the last Annual Report, weshared our vision to become aregional champion by 2015 and thestrategies we have put in place toget us there. In these first two yearsof 2008 and 2009, we set aboutbuilding a “new distinct company” –revamping the organisation and theoperating business model, makingeither basic or major fundamentalchanges to our governance,management, people, structure andprocesses, in order to transform thegroup into a world-class multinationalcompany (MNC). Together with theOpCos’ top management, we eitherrefined or revisited many of theirrespective strategies.Our spectacular first full year financialperformance for the year ended31 December 2009, is testamentthat we are executing well on ourstrategies and initiatives.Axiata has also been honoured withseveral local and international awards,including the Frost & Sullivan BestTelecom Group of the Year 2009,the Gold Award for the NACRA BestDesigned Annual Report and theMalaysian Corporate GovernanceIndex 2009 Merit Award. Mostrecently, Axiata has also won BestRegional Mobile Group at the TelecomAsia Awards 2010.GROUPREVIEWP E R FO R M A N C EI am pleased to report Axiata’sstrong results for our first full yearended 31 December 2009 – an allround performance in terms ofrevenue and profit growth across allmajor OpCos. Almost every aspectof the Group’s and OpCos’ strategieswere meticulously executed asplanned, which saw positive quarterlytrends continuing across OpCos andthe Group ending the year on aposition of strength.Group Revenue grew 15.5% to RM13.1billion YoY, EBITDA grew 18.4% toRM5.2 billion, with marginimprovement up from 38.4% to39.3%. These came from excellentperformances, particularly from ourMalaysian (Celcom)1, Indonesian (XL)2and Bangladesh (Robi)3 operations,with both XL and Robi showingpositive Profit After Tax (PAT) fromlosses in 2008. This contributed tothe Group’s marked increase in actualPATAMI, of 231.9% YoY to RM1.7billion. Normalised PATAMI was alsoup 43.6%, after adjusting forexceptional items, such as forex andfinance costs related to the Ideaacquisition. ROE showed 6.4percentage points improvement.123Axiata Group Berhad 018Celcom – brand name of Celcom AxiataBerhadXL – brand name of PT XL Axiata TbkRobi – brand name of Axiata (Bangladesh)Limited

The Group turned Free Cash Flow(FCF) positive for the first time, up265.2% to RM2.1 billion. The Group’sbalance sheet has been significantlystrengthened through a series ofcorporate finance activities. Wedeleveraged our balance sheetthrough the rights issue of RM5.2billion, proceeds of which wenttowards the paring down of ourdebts. Axiata’s Net Debt to EBITDAratio is now at 2.0x from 3.8x. Inanother effort to strengthen andstreamline the Group’s debt structure,Axiata converted RM2.8 billion of itsconventional term loans to Islamicterm financing. Most recently, Axiataembarked on a USD300 million(RM1.0 billion) bonds offering whichwill provide us with a better debtmaturity profile.XL also embarked on a rights issue,allowing it to reduce its debt andimprove its capital structure.In another significant corporatedevelopment, Axiata recentlycompleted the sale of 1.7 billion XLShares (representing 19.8% equitystake) at the price of IDR3,300(RM1.2) per share, raisingapproximately RM2.0 billion in grossproceeds.At the end of 2009, the Group’stotal subscriber base expanded to120.0 million, up 34.4% from a yearago making us one of the largestSoutheast and South Asia mobilegroup.Annual Report 2009 019

OP E R A T I N GREVIEWCO M P A N I E SThere was clear evidence of sustainedrecovery in most economies in 2009.Indonesia, Bangladesh and Indiaespecially have shown resilienceagainst the global economicslowdown. Furthermore, inflationaryled pressures eased in Sri Lanka andother markets, relatively lower tothe highs of 2008.We are particularly pleased with theexcellent results of Celcom, XL andRobi. All three OpCos have increasedmarket share and profitability, withCelcom and XL performing the bestin the industry.We also saw encouraging trends inSri Lanka with Dialog4, which reflectsthe success of Dialog’s concertedfocus on targeted revenue growthand cost management as well as itsability to accelerate performance inan increasingly competitive operatinglandscape. However, in Cambodia,Hello5 continues to face challenges ina highly competitive market withnine operators.We are also happy to see our Indianand Singaporean affiliates, Idea6 andM1 7 , producing solid results. Westarted the year cautiously, giventhe uncertain economic environment.With a strong emphasis on costmanagement, we have achievedimproved EBITDA margin acrossmost OpCos.Accelerated Performance atCelcom and XLMalaysiaExcellent execution of segmentedmarketing, as well as continued focuson mobile broadband, saw Celcomrecording the highest revenuegrowth, up 12.8% YoY to RM6.3billion. This coupled withimplementation of a strict costmanagement programme sawEBITDA improve by 11.0% in thesame period. Amidst a competitiveenvironment, EBITDA margin,excluding additional Universal ServiceProvision (USP) and Employees ShareOption Scheme (ESOS) charges,improved by 0.1 percentage point.PAT grew significantly by 19.0%,with a record amount of RM1.5billion.4567Axiata Group Berhad 020Dialog – brand name ofDialog Telekom PLCHello – brand name ofHello Axiata Company LimitedIdea – brand name ofIdea Cellular LimitedM1 – brand name of M1 Limited

President & GCEO’s Business ReviewThe year also saw strong growth innon-voice services, with data nowcontributing about 30% to revenue,from 22% a year ago. Mobilebroadband saw particular traction,surpassing 500,000 customers. Withan overall growth of 124.1%, Celcomis the undisputed leader in theindustry with mobile broadband, itcontributed close to 6% to Celcomrevenue, from only 2% last year.Diligent focus on cost management,which included direct expenses aswell as sales and marketing, sawimpressive margin improvement to44.7%, from 42.2% last year. Thatplus strict cost management sawEBITDA growth of 20.9% YoY. PATturned profitable, IDR1.7 trillion(RM578.0 million) from a loss ofIDR15.1 billion (RM4.7 million) in2008.Focus on network cost and efficiencyresulted in savings as evidenced inthe decline in network costs from11.7% to 10.3% YoY as percentage ofrevenue.XL has outperformed many of itsrivals during the year, and subscribersgrew from 26.0 million to 31.4 million.The group’s focus on activecustomers saw improved AverageRevenue Per User (ARPU), throughbetter quality customers.Celcom closed the year with 10.1million subscribers, a growth of15.8%.IndonesiaMaximisation of yield and strict costmanagement, saw strong performancein all financial metrics at XL. Thefocus on quality subscribers, whichbegan in early 2009, delivered a14.2% hike in revenue.the generated internal free cash torepay a significant amount of debt,reducing outstanding debt by nearly30%. Net Debt to EBITDA ratio hassignificantly improved from 3.4x in2008 to 2.0x in 2009, putting XL inexcellent shape to continue growingits business.Non-voice revenue saw stronggrowth with a 32.3 % increase YoY.Revenue from data services increased269.2% while SMS revenue grew18.9%. Alongside the emphasis onyield, moving forward XL will befocusing on this new growthsegment.Turnaround Plan Gains TractionFurthermore, XL also strengthenedits Balance Sheet in 2009. Healthyoperational momentum, combinedwith smart Capex spending, resultedin positive FCF for XL. XL has usedboth the proceeds of the IDR2.8trillion (RM1.0 billion) Rights Issue,completed in December, as well asBangladesh2009 was a turnaround year forRobi, with double digit growth of36.3% YoY in revenue. This was froma successful focus on distributionchannels via a brand focus andregional push strategy. Robi has nowrecorded five consecutive quartersof growth, with the last quarter of2009, the highest to date.We are particularlypleased with the excellentresults of Celcom, XL andRobi. All three companieshave increased market shareand profitability, with Celcomand XL performing the best in theindustry.Annual Report 2009 021

President & GCEO’s Business ReviewDespite the competitive regulatorychallenges, Robi recorded significantEBITDA growth of 58.0% YoY, withmargin improvement up 4.6percentage points to 33.6% in 2009,as compared to 29.0% in 2008. Thiswas a result of high revenue growthand continuous cost managementefforts such as lower network anddirect costs.Profitability showed the greatestimprovement of more than 100%,with Robi turning to a profit ofBDT0.9 billion (RM46.1 million) in2009 from a loss of BDT1.2 billion(RM62.3 million) a year ago. NetDebt to EBITDA ratio is 2.1x.YoY subscribers showed stronggrowth of 36.0% to 11.9 millionsubscribers on the back of focusedattention on customer retention andreactivation of inactive customers,supported by innovative plans andtariffs.Sri LankaDialog is still facing some externalchallenges with revenue marginallydown by 1.4% YoY. However, EBITDAimproved 136.4%, from SLR1.1 billion(RM34.9 million) in Q1 to SLR2.7b i l l i on (RM80.3 million) in Q4,representing four consecutivequarters of improvement on theback of the bold cost restructuringprogramme which is showingconsistent quarter by quarterprogress. Net Debt to EBITDA ratiois 3.4x.Axiata Group Berhad 022Dialog recorded a loss of SLR12.2billion (RM374.0 million) for 2009compared to SLR2.9 billion (RM92.9million) in 2008.Dialog has also seen continuedmobile subscriber growth amidst acompetitive environment, recordingan impressive 15.7% growth YoYwith 6.4 million subscribers.CambodiaHello is in an extremely over-crowdedmarket which affected its financialperformance overall, yet saw a 30.1%YoY increase in subscriber base.Revenue, EBITDA and PAT declined14.1%, 18.1% and 52.5% respectively.Net Debt to EBITDA ratio is 5.7x.The year focused on a strategyreview around distribution channelrestructuring and per second billinginitiatives with Group support.AFFILIATES REVIEWIndiaIdea became a pan-India operator in2009 with presence in all 22 serviceareas in the country. Despite thechallenging environment in Q2 andQ3, Q4 saw strong recovery.Idea saw revenue up an impressive26.2% YoY, with EBITDA up 22.7% inthe same period, despite increasingprice pressures in the market withcompetition intensifying, reflectingthe resilience of the company’sbusiness model. PAT grew 9.7% YoY.Idea contributed RM44.8 million toGroup profits, having been equityaccounted since the second half of2009.

Idea’s healthy balance sheet, as wellas its improving operationalefficiencies, provides a solid base tosupport the group during the currentmarket of hyper competition.As of 17 March 2010, the Idea-Spicemerger was completed.SingaporeM1 saw evidence of improvingeconomic conditions with an increasein its subscriber base of 7.9% YoYdespite being in a developed andsaturated market. For FY09 M1recorded a decline in revenue andEBITDA of 2.4% and 2.1% respectivelywhile PAT showed a slightimprovement of 0.1%. The lastquarter in 2009 particularly, showedencouraging signs across its financialscorecard. M1 looks forward toproviding exciting new opportunitieswith the launch of the iPhone, newmobile services, and Next GenerationNationwide Broadband Network(NGNBN).CONTINUING THETRANSFORMATIONLaying The Foundations For ASustainable FutureThe year saw the Group consolidating,enhancing the foundations andcreating a new and distinctcompany.2009 was a watershed year for thegroup, executing our new post demerger strategy with clockworkprecision to end the year on a high.We have a new name and brandidentity, with initial surveys showingregional awareness within a shortperiod of time. Across the Group,our OpCos have refreshed their logosand changed their names to reflectthe uniting Axiata identity.We further strengthened ourmanagement teams with strongdiversity across most OpCos and weimproved our operating modelfurther, especially in the areas ofperformance management, humanresource management, financialdiscipline and governance.Our cost reduction programme, arecurring theme in all the OpCos, areon track and we continue to explorefurther ways to reduce cost. In 2009our cost management programme(CMP), showed tangible resultsespeci a l l y i n p r o c u r e m e n t a n dtechnology, with over RM700 millionin savings.We put special emphasis on HumanCapital and Talent Development,with a clear philosophy and processesinstituted. We implemented manykey initiatives especially talentmanagement and leadershipdevelopment.In the areas of Group Synergies,Best Practices, and KnowledgeManagement, a total of 44 initiativeswere developed of which 50% havebeen launched and progressmonitored, with multiple bestpractices adopted at selected OpCos– Celcom (Pricing), XL CustomerLifestyle Management (CLM) & DialogSystems, Applications and Products(SAP). We also saw through ninegovernance related projects includingrevision of group policy coveringCode of Conduct and Limits ofAuthority, and initiated standardGroup framework agreements inProcurement.THE JOURNEYRAISING THE BARAHEAD:Axiata has always had compellinggrowth drivers, based on our existingpositions in countries with expandingeconomies and low penetration.Despite our 2009 achievements, webelieve that we still have a long wayto go to be a Regional Champion.That is what the next phase from2010 to 2012 is essentially about –building a ‘game-changing’ company.We will complete our organisationalchanges, perfect our OpCoengagement model, realise groupsynergies and develop new strategicbusiness models, whilst furtherrefining all our OpCo strategies anddrive new strategic initiatives. Ourcost structure will be benchmarkedregularly, as being lean andcompetitive remains our top focus.Annual Report 2009 023

President & GCEO’s Business ReviewRecovery in the global economy waswell underway in 2009, and weremain cautiously optimistic into2010. Overall the Asia Pacific mobilerevenue growth will moderate in themedium term; with slowing revenuegrowth driven by increasingpenetration and lower ARPUs.However in the medium term, similarto global trends, our markets willcontinue to show voice revenuesdominating with broadband andmobile data as the engine of growthin high penetration markets. In lowpenetration markets, subscribergrowth would still drive revenuegrowth. Adjacent opportunities existin M-Commerce and mobileadvertising. Given this, our mediumterm objectives will be balancedbetween maximising returns andmaintaining growth.Axiata aims to assert its leadershipin mobile broadband and mobile dataservices, whilst we consolidate andsignificantly strengthen our overallportfolio. This may include divestmentof our non-core or sub-scale businessesin other countries. We will alsoincrease our focus on segmentedmarketing and CLM and on touchpoints. Moving forwa

300 Net Book Value of Land & Buildings 301 List of Top Ten Properties 302 Group Directory 303 Glossary 307 Notice of Annual General Meeting . to see through by constantly raising the bar. RAISING THE BAR. Axiata Group Berhad 010 T AN S R i dAT A ZMAN hJ Mo K h TAR C HAIRMAN. Annual Report 2009 011