Analyst Meet Q1 FY10 v2 - aceanalyser.com Meet/132371_20090728.pdf1 Build Indicom Brand & Focus on...

VisionTo be the most admired Telecom service

provider in Maharashtra and Goa

MissionWe will become the most admired company delivering sustainable value by –

Balancing the needs of all stakeholders and encouraging value creation throughout the organization

Continuously satisfying customers’ growing needs and expectations with innovative and customized cutting edge solutions

Creating an engaged and empowered workforce committed to delivering high performance

Analyst Meet

Q1 FY10

28 July 2009

Disclaimer

Certain statements in this release concerning our Company objectives, future prospects, expectations may be forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Tata Teleservices (Maharashtra) Limited may, from time to time, make additional written and oral forward looking statements, including our reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.

Key Milestones in Q1 on Subscribers

Crossed 8 million subscribersTTML

Crossed 5 million Subscribers – largest

Tata circle in India today

Rest of Maharashtra

TTML ADSL base has crossed the 50,000 subscribers milestone

Digital Mumbai™

Agenda

Operations Priorities decided for FY 09-10

Optimize Costs & Enhance MarginsOptimize Costs & Enhance Margins33

Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11

Enhance Network RolloutEnhance Network Rollout22

Focus on Customer ServiceFocus on Customer Service44



Events

Internet, TVCs & Radio

Schemes & Offers

Outdoors

Value Added Services

Device Innovation

Building Indicom Brand & Focus on Innovation

OutdoorsOutdoors

Mumbai – Juhu SNDT Mumbai - Mahim Causeway

Pune - Pimpri, Finolex Chowk Mumbai - Worli


OutdoorsOutdoors

Bushy Dam – a prominent weekend destination visited by travelers from Mumbai, Pune, Nasik etc. especially during the monsoons


EventsEvents


Internet, TVC & RadioInternet, TVC & RadioScreen Grabs - rediff.comScreen Grabs - Orkut

Screen Grabs - Zapak Gamplex Screen Grabs - rajshri.com


Internet, TVC & RadioInternet, TVC & Radio

Go One TVC

Let’s RockTVC

Prepaid RCVRadio

VASRadio

Let’s RockRadio

Build Indicom Brand & Focus on Innovation

Highlights of Let’s Rock PlanThis year’s edition launched in June end, when campuses opened

5 years validity compared to 3 years earlier

Special tariffs at night after 9pm

Over 60K subscribers in one month

Schemes & OffersSchemes & Offers


Highlights of Go One Life PlanLaunched in mid April

Objective: To increase acquisition by being most competitive in the Lifetime segment

50 paise per minute for all local calls to any network




May Day Press Ad RCV 115


Home Zone tariff offerProduct: Special tariff for customers calling through BTSs with low utilization to increase loading

Tariff Offered: 10 paisa local T2T and 50 paisa other local calls, with 6 months validity

Tariff has been launched in the last 2 quarters across 500 sites and the average RF utilization shows a growth of 50%



Value Added ServicesValue Added Services

Mobile Millionaire Contest SMS Pack


Device InnovationDevice Innovation

Wireless EPABX GatewayAllows penetration into unwired buildings

One extension with DID/DOD facility for each desk

Provides scalability from 16 to 160 extensions

Patent filed for this innovation


Device InnovationDevice Innovation

Photon+

Following the launch of Photon+ in Mumbai in March ‘09, the product has now also been launched in Nagpur with effect from July 25th ‘09

Enhance Network Rollout

18 towns and 22 BTSs rolled out for CDMA in Q1, taking the total to 1166 towns and 2703 BTSs

Major focus during the quarter has been on building out the GSM network

Operations Priorities






Optimize Costs & Enhance Margins Prepaid channel commission reduced by 36% over Q4 FY09, mainly due to lower prepaid activation pack prices

RCV distributor margin being further reduced from 4.5% to between 3.75% to 4%

Reuse of CDMA infrastructure to the extent of 90% of CDMA sites in Mumbai and over 90% of CDMA sites in RoM in the areas where GSM rollout is being done

Focus on Customer Service


TTML has been rated as the only congestion free network across Mumbai and Maharashtra in the last four consecutive reports published by TRAIThis follows its earlier rating in independent studies commissioned by TRAI as the No. 1 wireless operator in terms of overall customer satisfaction across Mumbai and Maharashtra


Mahim Causeway 61x10

Worli AB Road (Opp Poddar Hospital

Agenda

Economic Overview

Indian EconomyAgainst earlier estimates in the AOP of 7.1% growth, the Indian economy in fact only grew 6.8% in 2008-09The Government is indicating a projected growth of 7% in FY10

Maharashtra EconomyAgainst earlier projections of 8% growth in FY09, the State economy in fact only grew 7.1%Worryingly, against earlier indications that the agricultural sector was likely to register positive growth, the agrarian economy in fact showed negative growth of 7.1%; since the agrarian economy supports over 55% of the population, due caution needs to be exercised in projecting growth this year of rural and semi-urban subscribers, in particular the revenue they might generate

Source: Maharashtra Economic Survey, 2008-09

Market Overview

India

Population as of 2009 (Mln)Population as of 2009 (Mln) 1166.91166.9 101.2101.2 2020

Maharashtra(excl. Mumbai) Mumbai

Wireless TeledensityWireless Teledensity 37%37% 33%33% 102%102%

Q1 FY10 subscriber growth over Q4 09Q1 FY10 subscriber growth over Q4 09 9.1%9.1% 7.4%7.4% 6.2%6.2%

Wireless Base as on June 2009 (Mln)Wireless Base as on June 2009 (Mln) 427.4427.4 33.233.2 20.420.4

Q1 FY10 TTML subscriber growth over Q4 09

Q1 FY10 TTML subscriber growth over Q4 09 6.1%6.1% 8.5%8.5%

* Source: MMRDA report (Population and Employment profile of Mumbai Metropolitan region), Wikepedia & TRAI Subscriber ReportNote: BSNL CDMA numbers not released

Reliance14.2%

Bharti20.8%

Tata Indicom64.9%

Reliance14.6%

Bharti35.7%

Tata Indicom49.8%

Q1 FY10 Wireline Incremental Market Share

MumbaiMumbai

ROMROM

Source: TRAI Subscriber report (Only Private players)Source: TRAI Subscriber report (Only Private players)

(9 K)(9 K)

(20K)(20K)

Reliance19.1%

Bharti31.9%

Tata Indicom48.9%

Q1 FY10 Wireline EOP Market Share

Reliance27.9%

Bharti20.7%

Tata Indicom51.4%

MumbaiMumbai

ROMROM

Only Private playersOnly Private players

(138 K)(138 K)

(428 K)(428 K)

Q1 FY10 Wireless Incremental Market ShareMumbai ROM

TTML

11

4422

33

1122

44 33

11

22

44 33

Vodafone

MTNL

Bharti

Idea

Tata Indicom

Aircel

Loop

Vodafone

Bharti

Idea

Tata Indicom

Aircel

BSNL

Vodafone

MTNL

Bharti

Idea

Tata Indicom

Aircel

Loop

BSNL

Reliance (CDMA+GSM)

Reliance (CDMA+GSM)

Reliance (CDMA+GSM)

Source: TRAI Subscriber reportSource: TRAI Subscriber report

Q1 FY10 Wireless EOP Market Share

16.2%10.9%

0.001%

14.9%24.1%

18.4%

15.5%12.2%

13.8%

1.0%22.42%

12.3%11.3%

4.6%

22.44%

18.2%

18.5%

6.8%

13.9%

4.3%

4.7%

0.4%

16.7%

16.6%

11 22

4433

Mumbai ROM

TTML

11

22

55

33

44

11

22

55 33

44

Vodafone

MTNL

Bharti

IdeaTata Indicom

Aircel

Loop

VodafoneBharti

IdeaTata Indicom

Aircel

BSNL

Vodafone

MTNL

Bharti

Idea

Tata Indicom

Aircel

Loop

BSNL

Reliance (CDMA+GSM)

Reliance (CDMA+GSM)

Reliance (CDMA+GSM)

Source: TRAI Subscriber reportSource: TRAI Subscriber report

Market Evolution

With increased competition and falling tariffs, ARPUs and revenues from traditional voice services are going to be constantly underpressure

Subscriber growth in semi-urban and rural areas, while high, will not generate commensurate revenue and bottom-line growth

The urban revenue pie, which is nearing saturation, and already has many operators jostling for a share, will get further divided

While subscriber growth will continue to be relevant, the focus will have to be on trying to increase revenue market share (with strict control on costs), through smart segmentation (e.g. Let’s Rock), offering value added products and services (e.g. Conferencing), and churning high value subscribers from the competition (e.g. by leveraging mobile number portability)

Agenda

SCORECARD Q1 FY10 Vs Q4 FY09 and Q1 FY09

Total Revenue (Rs.Crs.)Total Revenue (Rs.Crs.)

EBITDA (Rs.Crs.)EBITDA (Rs.Crs.)

EBITDA Margin % EBITDA Margin %

Cash Profit (Rs.Crs.)Cash Profit (Rs.Crs.)

EOP Subscribers (Nos. in lacs)EOP Subscribers (Nos. in lacs)

PAT (Rs.Crs.)PAT (Rs.Crs.)

513513

158158

31%31%

8585

Q1 FY10Actual

80.080.0

(34)(34)

Cash Profit (Rs.Crs.) (excl. Forex Loss)Cash Profit (Rs.Crs.) (excl. Forex Loss) 7676

Q4 FY09Actual

517517

132132

26%26%

7979

75.075.0

(39)(39)

5151

Q1 FY09Actual

505505

155155

31%31%

8080

56.256.2

(35)(35)

100100

Note: Q4 FY09 & Q1 FY10 figures are consolidated results

Termination charges reduced with effect from April 2009

Key Parameters

Particulars UnitsJun-08 Sep-08 Dec-08 Mar-09 Jun-09 FY-08 FY-09

Wireless ServicesSubscribers Base Nos. '000 5,190 5,698 6,150 6,962 7,441 4,683 6,962 Prepaid Subscribers as a % of EOP Subscribers % 87% 88% 89% 91% 91% 86% 91%Wireless Subscribers Market Share % 14.0% 14.1% 13.9% 13.9% 13.9% 13.5% 13.9%Average Revenue per User * Rs. per month 232 210 196 178 154 268 198 Avg. MOU per User ** Min. per month 369 336 323 311 292 447 326 Rate per Minute Rs. 0.63 0.62 0.61 0.57 0.53 0.60 0.61 Postpaid Voluntary Churn % per month 0.8% 0.6% 0.8% 1.2% 1.3% 0.9% 0.9%Postpaid Company Initiated Churn % per month 1.2% 2.5% 2.4% 2.1% 1.6% 1.9% 2.2%Prepaid Churn % per month 0.8% 0.8% 1.8% 1.1% 1.2% 1.6% 1.1%VAS + Data Revenues as a % of Wireless Revenue % 12.3% 13.4% 13.4% 13.9% 15.4% 10.1% 13.2%

Wireline ServicesCustomers Nos. '000 427 456 489 533 563 396 533 ARPU *** Rs. per month 1,260 1,275 1,156 1,048 1,071 1,324 1,116

** Only Voice MOUs considered. Local on net MOUs have been counted twice.*** Wireline revenues are inclusive of Rs. 16.67 Cr. one time revenue from dark fibre and bandwidth sale in Q1-10.

Year EndedQuarter Ended

* Q1-09 revenues include USO Subsidy for 2 quarters; Q2-09 has upfront USO subsidy, accounting change from 01.04.2008.

Other Details

Particulars Units Q2-09 Q3-09 Q4-09 Q1-1021st Century Infra Tele Ltd.Total Towers Nos. 1,294 1,380 1,492 1,829 Ground Based Towers Nos. 381 393 433 494 Roof Top Towers and Others Nos. 913 987 1,059 1,335 Occupancy Ratio Ratio 1.39 1.37 1.41 1.43

Particulars Units Q1-09 Q2-09 Q3-09 Q4-09 Q1-10Wireless ServicesMinutes on Network * Mn Min 5,463 5,487 5,741 6,113 6,301 Census Towns Nos. 295 311 324 330 330 Non-Census Towns and Villages Nos. 7731 7804 9,054 10,334 10,574 Population Coverage (excluding Mumbai) Nos. lacs 608 623 670 716 720 Network Sites Nos. 1757 2050 2,367 2,681 2,703 Optic Fibre Network Km 6536 6580 7,980 8,804 9,154

TTML Balance Sheet data (Standalone)Gross Debt Rs. Cr 2,781 2,894 3,096 3,112 3,185 Net Debt Rs. Cr 2,753 2,856 3,069 3,085 3,165 Gross Block (including Capital WIP) ** Rs. Cr 4,620 4,456 4,654 4,771 5,133

* Only Voice MOUs considered. Local on net MOUs have been counted twice.

** Passive Infrastructure assets hived off wef 30th Sep 2008.** Fully depreciated assets written off and removed from Gross Block of assets (Q1-09 Rs. 268 Cr and Q4-09 Rs.100 Cr).

409 429 460

491 505 518 518 517 513

130

230

330

430

530

630

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

Revenue (Rs.Cr.)

Quarterly Performance

Note: Figures from Q3 FY09 onwards are consolidated results

Crossed 500 Crs five quarters in a row

3,478 4,127

4,696 5,079

5,617 6,154

6,639 7,495

8,004

600

2,600

4,600

6,600

8,600 Q

1FY0

8

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

EOP Subscriber Base (`000)

314

283

250 233

218 202 192 182

154

70

140

210

280

350

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

Operational Cost per Sub (Rs.pm)

100 106

128

150 155 161 151

132

158

0

40

80

120

160

200

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

EBITDA (Rs.Cr.)

Quarterly Performance

25% 25%28%

31% 31% 31%29%

26%

31%

0%

7%

14%

21%

28%

35%

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

EBITDA Margin (%)

(3)2

15

33

41 46

35

15

39

-10

0

10

20

30

40

50

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

EBIT (Rs. Cr)

(28)

(49)

(27)

(21)

(35)

(47) (49)

(39)(34)

(60)

(45)

(30)

(15)

-

Q1F

Y08

Q2F

Y08

Q3F

Y08

Q4F

Y08

Q1F

Y09

Q2F

Y09

Q3F

Y09

Q4F

Y09

Q1F

Y10

PAT(Rs.Cr.)

Note: Figures from Q3 FY09 onwards are consolidated results

Market Capitalization & Share Price (As on 30th June 2009)

Source: BSE

(Fig. in Rs. Crs)

28.4528.45

40.3040.30

35.90

(Fig. in Rs.)TTML Share Price Trend

5387.195387.19

7646.06

6811.67

Market Capitalization Trend

15626.6215626.62

17600.1217600.12

14493.84

BSE Index Trend (Fig. in Rs.)

Thank You

Analyst Meet Q1 FY10 v2 - aceanalyser.com Meet/132371_20090728.pdf1 Build Indicom Brand & Focus on...

Documents

Transcript of Analyst Meet Q1 FY10 v2 - aceanalyser.com Meet/132371_20090728.pdf1 Build Indicom Brand & Focus on...