Airtel_Investor_Presentation ... - Cloud Object Storage · Investor Presentation Bharti Airtel...

Investor Presentation

Bharti Airtel LimitedDecember 2008

DisclaimerThe information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end.

This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify forward looking statements.

Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive

This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.

Investor Relations :- http://www.bhartiairtel.inFor any queries, write to: [email protected]

“The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.”

3

Mobile Services Telemedia Services Enterprise Services

Advantage India

Deep Domestic Demand…Huge Growth Potential

Population: 1.1 billion→ increasing urbanisation→ relatively large youth population

GDP Growth (Real) : ~9%→ second highest growing economy

GDP Size (PPP adjusted): US$ 3 trillion→ fourth largest economy in the world

Telecom penetration: 31.50% (364 telecom subs)

→ one of the lowest→ Govt. target to reach 500 mn.

telecom subs by 2010Broadband penetration: 0.44% (5.05 mn)

→ one of the lowest→ Govt. target to reach 20 mn.

Broadband subs by 2010

Note: (1) Telecom and Broadband penetration is as at October 2008, as per TRAI press release.

4


The Company...Bharti Airtel

Bharti Airtel – an integrated telco

Wireless Services

2G/3G

Rural Market

Telemedia Services

Fixed Line

Broadband

DTH (Media)

Enterprise Services

Carriers

Corporate

Passive Infrastructure Services

Fully integrated telecom player…end to end telecom offerings

5


3rd LARGEST wireless operator in the world1

LARGEST TELECOM company listed on Indian Stock Exchanges

Bharti Airtel - placing in the world and India

LARGEST private INTEGRATED telecom company in India

LARGEST WIRELESS operator in India

LARGEST private FIXED LINE operator in India

Note: (1) 3rd largest wireless operator in the world refers to in-country (single country) operator based on the number of subscribers.

6


Latest Results – Q2 FY08/09

Key operating and financial metrics

Q2 FY 09 Y-on-Y

Customers 79.99 mn 57.0%

Revenue $ 1,942 mn 42.3%

EBITDA $ 796 mn 36.5%

Cash Profit $ 673 mn 20.3%

Net Income $ 441 mn 26.8%

EBITDA Margin 41.0%

Net Profit Margin 22.7%

ROCE 33.9%

ROE 35.9%

Continued Strong Performance

Wireless Customer market share leadership at 24.6%.

Total minutes on network carried in Q2 – 134 billion

Total employee strength – 25,616

Balance sheet strength:

Assets - $ 12 billion

Net debt - $ 402 million*

Net debt to EBITDA - 0.14 times*

Note: * Net Debt is excluding fully and compulsory convertible, non-cumulative, unsecured and interest free Debentures of US$ 690.

7


performance dashboard - 3 line graph

Productivity Indicators = growing revenues + cost efficiencies + capital productivity

(capital productivity)(operating efficiency)

1,942

1,826

1,683

1,499

1,364

32.6%32.4% 32.7%

33.8% 34.6%

70.8% 71.1%74.4% 73.3% 73.1%

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Q208 Q308 Q408 Q109 Q209

Gro

ss R

even

ue (U

SD M

n)

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Gross Revenue (USD Mn) (LHS)

Opex to Gross Rev (RHS)

Revenue (annualized) to Gross Cummulative Capex (RHS)

8


Segment investment & contribution

Note: (1) Revenue and EBITDA is gross of inter segment eliminations.

Revenue

81%9%

19%5% 13% 1%

Mobile Services Telemedia ServicesEnterprise Services - Carriers Enterprise Services - CorporatesPassive Infrastructure Services Others

INVESTMENTS

50%

11%13%1%

24% 1%


h

EBITDA

59%

10%

20%

5%11% -3%


few recent recognitionsBharti Airtel was voted as India’s most innovative company in a survey conducted by The Wall Street Journal.

Airtel won the Platinum Trusted Brand Award in the Mobile Service Provider Category in the Reader’s Digest Asia Trusted Brand’s Survey.

Airtel was chosen as the 2nd most trusted service brand in India in the ‘Most Trusted Brands 2008 Survey’ conducted by the Economic Times - Brand Equity

Awarded with top honors at the GSMA Mobile World Congress Conference 2008 in Barcelona for the category “Best Billing/ Customer Care solution.”

Adjudged as the ‘Best Carrier India‘ at the Telecom Asia Award 2008

Ranked 2nd in the survey of India’s Most Respected companies by Businessworld

Adjudged as ‘Company of the Year’ at the CNBC India Business Leader Awards 2007

Economic Times ‘Company of the year 2007’ award for corporate excellence.

Sunil Bharti Mittal, Chairman & Group CEO

GSM Association Chairman’s Award 2008

Chosen for Padma Bhushan Awards in 2007

10


Wireless Services

11


Sub Base : 325.7 mn→second largest market

Wireless Penetration: 28.2%→lowest in the world

HHI Index: very high→one of the most competitive market

Prepaid Base: 90%+→one of the highest in the world

Usage per sub per month:Minutes: 455

→one of the highestARPU: ~ US$ 7.6

→one of the lowestRate per minute: 1.4 cents

→ one of the lowest in the worldVAS: ~ 9%

→One of the lowest

KPIs…Indian Wireless Market

MUM

HP

DELHI

AP

CHN

MADHYA PRADESH`

TNKER

PB

DEL

UP(W)

MP

RAJUP(E)

KK

OR

HAR

JK

BH

WBGUJ

MAH

AS

NE

Metros

A Cat.

B Cat.

C Cat.

MUM

HP

DELHI

AP

CHN

MADHYA PRADESH`

TNKER

PB

DEL

UP(W)

MP

RAJUP(E)

KK

OR

HAR

JK

BH

WBGUJ

MAH

AS

NE

Metros

A Cat.

B Cat.

C Cat.

MUM

HP

DELHI

AP

CHN

MADHYA PRADESH`

TNKER

PB

DEL

UP(W)

MP

RAJUP(E)

KK

OR

HAR

JK

BH

WBGUJ

MAH

AS

NE

Metros

A Cat.

B Cat.

C Cat.

Metros

A Cat.

B Cat.

C Cat.

Kol

Note: (1) Subscriber numbers and wireless penetration numbers as at October 31, 2008. (2) Other indicators on the slide are based on QE June, 2008 Global Wireless Matrix released by Merrill Lynch, and reflective of Industry numbers.

12


9 mn net adds per month S-curve triggered

Rapidly Growing Wireless Market

Note: (1) Actual Data as per Industry Association Releases and Industry Estimates.

fastest growing market in the world

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019-

50

100

150

200

250

300

350

Mar

-01

Oct

-01

May

-02

Dec

-02

Jul-0

3

Feb-

04

Sep-

04

Apr-

05

Nov

-05

Jun-

06

Jan-

07

Aug-

07

Mar

-08

Oct

-08

-1234567891011

Closing Customers (mn) Net Adds (mn)

13


80.2

57.848.6

56.7

31.6 30.220.7

50.9

37.8 38.0 37.2

19.4 20.213.6

29.320.0

10.619.5

12.2 10.0 7.1

-10.0020.0030.0040.0050.0060.0070.0080.0090.00

Airte

l

Rel

ianc

e

BSN

L+M

TNL

Voda

fone

Idea

Tata

Oth

ers

(mn)

Oct-08 Oct-07 Net adds during the year

Wireless Market Structure

• Airtel continuously consolidating its market leadership position despite intense competition.• Airtel current monthly net adds at 2.7 million vs 2 million a year ago.• Market share of net adds at 26.1%.• Airtel ranks 1& 2 in 16 circles.• 56% of net adds coming from B&C circles (rural India).

leads on revenue market share also

Subscriber Trends Customer Market Share – CMS (%)24.6%

17.7%

14.9%

17.4%

9.7% 9.3%

6.3%6.3%

9.3%8.9%

17.1%17.5%17.4%

23.4%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

23.0%

25.0%

Airt

el

Rel

ianc

e

BS

NL+

MTN

L

Voda

fone

Idea

Tata

Oth

ers

CMS(Oct'08) CMS(Oct'07)

14


Current March 2009

Presence Operational in 23 circles of India on GSM technology.

Plan to launch in Srilanka.

Population Coverage

77% of population covering 5,000+ census towns and over 385 lakhsnon-census towns and villages.

• Poised to cover all census towns and majority of non-census towns and villages

• Penetration wider and deeper into rural India

Network Rollout & Strength

• Hive off of passive infrastructure into a separate independent tower company

• Largest GSM (900/1800 Mhz) network in India comprising of over 83,000 network sites

• Strong partners: Ericsson; Nokia

• Network sites ~ 100,000 +

• Plan to get 3G license and spectrum.

Road map

15


Current March 2009

Sales & Distribution Network

• One of the widest distribution network.

• Following the FMCG company distribution model - Match Box Approach

• Present in over a million PoP in India.

• Tie-up with IFFCO, an edge over others to reach out to Rural India

• Continue distribution expansion, especially in rural areas

Customer Service • Continuous improvement in CSAT scores

• Multi pronged service strategy in place

• Focus on service through service training and employee sensitivity

• Unified service backend for enhanced customer experience

Employee Engagement

• Significant improvement in employee engagement

• Awarded “Great Work Place 2008” by Gallup

• Sustain employee engagement

• Focus on employee capability development and leadership pipeline

Road map

16

Mobile Services Telemedia Services Enterprise Services16

Hello Tunes(Ring Back

Tones)

Portfolio Manager(Stock Tracker)

Blackberry

Airtel Live(Portal)

Life time validity product

Electronic Recharge /

Micro Prepaid

first mover advantage/ product innovations

focus on product innovations

Easy Music

Song Catcher

Call Home Service

Money Transfers

Music on Demand

Google search

M Commerce

iPhone

17


Performance Indicators

62.0

69.4

77.5

48.9

55.2

23.4%23.6% 23.7%

24.2%24.6%

40.045.050.055.060.065.070.075.080.0

Q208 Q308 Q408 Q109 Q20923.0%

23.5%

24.0%

24.5%

25.0%

Customers (Mn) CMS (%)

90.4% 91.0% 91.6% 92.3% 92.9%

98.4%

95.4%

85.0%

90.0%

95.0%

100.0%

Q208 Q308 Q408 Q109 Q209

Prepaid Subs Prepaid Net Adds

Customers & Market Share Prepaid/Postpaid

MoU/Sub/Month & MONARPU & RPM

469

526474

507534

115,834

64,375

370

400

430

460

490

520

550

Q208 Q308 Q408 Q109 Q2090

40,000

80,000

120,000

160,000

MoU/Sub (Min) Total minutes on Netw ork (Mn Min)

1.69 1.64 1.551.351.41

7.9

7.1

-

0.50

1.00

1.50

2.00

Q208 Q308 Q408 Q109 Q2095.0

6.0

7.0

8.0

9.0

RPM (cents) ARPU (USD)

18



1,0891,208

1,3821,489

1,568

9001,0001,1001,2001,3001,4001,5001,6001,700

Q208 Q308 Q408 Q109 Q209

EBITDA (USD mn) & Margin (%)Revenues (USD mn)

446

493 490

457474

400

450

500

550

Q208 Q308 Q408 Q109 Q209

41.0 40.8 35.5 30.7 30.2

19


Telemedia Services

20


A snapshot

Largest private operator having presence in the voice and data (broadband).

Foraying into the media space - IPTV & DTH (Direct-To-Home) services.

Key Performance Indicators 1. Voice (wire-line) and Data (DSL) Presence in 95 top cities of India.

2. Target Segment : Retail and Small and Medium Enterprises.

3. Customer base: 2.58 million (end October,2008)

4. Broadband (DSL with speeds>256 kbps) penetration at 37% of customer base.

5. Customer ARPU of $ 25 per month.

6. Segment contributing to 9% of overall revenues of the company.

7. Robust EBITDA margin of over 43.6%.

Broadband revolution to follow wireless revolution in India

21


Telemedia Services

Business Units Media SMBs Homes

Products • DTH• IPTV

• Voice• Data• Mobile Services

• Broadband• Voice

Goal

A Pan-India DTH Businesses; and a targeted IPTV Presence in top metros

One-Stop Shop for All Airtel Services and Solutions to SMBs

Dominant Broadband & Fixed Voice share of the affluent in targeted 94 cities

Strategies

• Best-in-class technology:

• World-class Installation & Customer Service

• Interactive VAS to Drive ARPU enhancement

• One Airtel Synergies for Distribution, Brand & IT

• Data Products: Internet, MPLS etc

• Integrated Solutions to Drive Share of wallet

• Strategic Alliances• Indirect Channel to

Drive Penetration

• Deeper & Not Wider: 94 Cities

• Vertical & Not Horizontal: Hi-Rise

• Network Enhancement to Deliver 8+ MBPS

• New Products & VAS to drive Flat, Combo Plans

22


Product Portfolio

Our Media Play

http://airtel.in/wps/wcm/connect/Airtel.in/airtel.in/home/foryou/home+phones/fixed+line/pg_fy_hp_fl

http://airtel.in/wps/wcm/connect/Airtel.in/airtel.in/home/foryou/broadband+internet/speed+on+demand/pg_fy_bi_sod

23



2,1782,283

2,3942,509

2,075

922853795751705

1,250

1,500

1,750

2,000

2,250

2,500

2,750

Q208 Q308 Q408 Q109 Q2090

200

400

600

800

1,000

B&T Customers ('000) DSL Customers ('000)

24.8 24.5 24.5 24.5 24.7

0.0

4.0

8.0

12.0

16.0

20.0

24.0

28.0

Q208 Q308 Q408 Q109 Q209

151157

164

172

183

140

150

160

170

180

190

Q208 Q308 Q408 Q109 Q209

Customers (overall & DSL) ARPU (USD)

Revenues (USD mn) EBITDA (USD mn) & Margin (%)

60

6872 72

80

40.045.050.055.060.065.070.075.080.0

Q208 Q308 Q408 Q109 Q209

39.7 43.4 43.8 42.2 43.8

24


Enterprise Services

25


A snapshotCarrier: - one of the largest carriers of voice and data, both domestic and international.

Corporate: - providing end to end telecom solutions to large corporate and Small & Medium Businesses.

Present Competition: National Long Distance: BSNL; Reliance; VSNL; Vodafone; Tata

International Long Distance: VSNL, Bharti, Reliance, BSNL

26


Enterprise Services – Carriers NLD

LegendExisting OFC RouteUnder Execution

Kolkata

Mumbai

Chennai

Hyderabad

Bangalore

Jaipur

Ahmedabad Bhopal

Chandigarh

Delhi

Nagpur

Lucknow

Jalandhar

ErnakulamCoimbatore

Kolkata

Mumbai

Chennai

Hyderabad

Bangalore

Jaipur

Ahmedabad Bhopal

Chandigarh

Delhi

Nagpur

Lucknow

Jalandhar

ErnakulamCoimbatore

Voice Network

captive traffic (group traffic) ~ 90 %NLD minutes carried (Q2FY09) > 11 Bn Minoptic fibre capacity (Q2FY09) 83,389 km

27


Enterprise Services – Carriers ILD

Legendi-2-iSEA-ME-WE-4Other Int’l ConnectivityInt’l Gateways Connectivity

SEA-ME-WE-4 Connectivity to Westi-2-i Connectivity to EastILD minutes carried (Q2FY09) 2.3 Bn MinILD gateways 4landing stations 2

28


Performance Indicators - carriers

6,7747,898

9,39810,322

11,349

1,345 1,591 1,850 2,048 2,284

0

2,000

4,000

6,000

8,000

10,000

12,000

Q208 Q308 Q408 Q109 Q209

NLD Minutes (mn) ILD Minutes (mn)

216

244271

338

366

200.0

240.0

280.0

320.0

360.0

400.0

Q208 Q308 Q408 Q109 Q209

Voice Minutes on Network Revenues (USD mn)

EBITDA (USD mn) & Margin (%)

75 79 87

148158

0.020.040.060.080.0

100.0120.0140.0160.0

Q208 Q308 Q408 Q109 Q209

34.5 32.2 32.0 43.9 43.2

29


Enterprise Services - Corporates

Voice services

Satellite services Managed data & Internet services

Managed e -business services

Managed customized integrated solutions

Mobile services

competition limitedsegment one stop telecom solutiontarget 2,000 top large corporatesleveraging integrated play

30


Performance Indicators - corporates

74 71

81 83

105

60.0

80.0

100.0

120.0

Q208 Q308 Q408 Q109 Q209

Revenues (USD mn) EBITDA (USD mn) & Margin (%)

31 30

46

3843

0.0

20.0

40.0

60.0

Q208 Q308 Q408 Q109 Q209

41.9 41.9 57.0 45.7 41.4

31


Passive Infrastructure Services

32


Market landscape

Industry estimated to have 350,000 towers by 2010

No of Towers (Estimates) Description

Indus Towers 88,000 JV between Airtel;Idea & Vodafone operational in 16 circles

Bharti Infratel 25,000 Subsidiary of Airtel operating in 7 circles

Reliance Infratel 30,295 Subsidiary of Reliance operating in all 23 circles

BSNL+MTNL 40,000 State Owned Telephone Company

Tata 7,600 Present in 18 circles. TTML is operational in 2 circles

Aircell 7,000 Operator owned towers, present in 13 circles

Essar 3,200 Part of Essar Group, present in 13 circles

Quippo 3,405 Present in 15 circles. Includes the acquisition of Spice Towers

GTL 4,400 Present in 15 circles

TOTAL 208,900 No of Subs (in million) 285 Subs/Tower Approx 1,300

Source: Company data and Industry Estimates

33


A snapshotBharti Infratel operates in 7 circles.

Indus Tower operates in 16 circles.

Standard Master Services Agreement with competitive rates already in place.

Key focus areas:

To increase sharing factor (tenancy) from current levels of 1.26.

Provide energy optimization solutions and other network management services.

Evaluate other revenue streams.

Key performance Indicators:Sharing Factor: 1.26

Sharing Revenue per sharing operator per month at Rs. 32,177.

EBITDA margin: 33.3%

Aim to be the preferred choice of vendor for all existing and new operators

34


To conclude

35


Key Strategic Objectives

Sustain revenue share in mobile profitably

Achieve deeper penetration in home and SMB

Product & vertical focus to gain client Revenue Market Share (cRMS) in Enterprise business

Become a benchmark in customer experience through service quality & innovation

Build a robust leadership pipeline to support growth

Benchmark in cost efficiency & productivity

DisclaimerThe information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end.

This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words ‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify forward looking statements.

Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive

This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.

Investor Relations :- http://www.bhartiairtel.inFor any queries, write to: [email protected]

“The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted.”

Airtel_Investor_Presentation ... - Cloud Object Storage · Investor Presentation Bharti Airtel...

Documents

Transcript of Airtel_Investor_Presentation ... - Cloud Object Storage · Investor Presentation Bharti Airtel...