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Investor Presentation
ar a r e m e September 2011
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The CompanyBharti airtel
No. of circles (India) Today Countries1 5 15 22 19
1996 2001 2003 2004 2010
Fully integrated telecom player offering end to end solutions and entering newgeographies
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Growth trajectory reflected in the numbers
Single Circle Operator Company Profile Largest integrated private telecom
operator
< 25k Customers ~ 221 mn
~ USD 17 mn Revenue ~ USD 13 bn
1996 2011
~ USD 2.5 mn EBITDA ~ USD 4 bn
~ USD 1.4 mn Cash Profit ~ USD 4 bn
~ USD 16 mn Market Capitalization ~ USD 30 bn
Continuing on our journey of Value Creation
Note: 1) 2011 financials are as per FY 2011 results. 2) Exchange rate: Financials as of 31stMar 11 : Rs 44.65
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Financials & Positioning
FY 11 (in Mn)
Customers 220.9
Revenue $ 13,319
Positioning in the world & in India
3rd LARGEST in -country wireless operator in the
world (1)
LARGEST private INTEGRATED telecom company in
India
Key financial metrics
,
Cash Profit $ 3,983
Net Income $ 1,354
EBITDA Margin (%) 34.6
ROCE (%) 10.8
5th LARGEST Mobile telecom operator in the world
Amongst the largest providers of Passive
infrastructure (by towers) (2)
Note: FY11 numbers are as per IFRS as per March11 quarterly report. Exchange rate for Re to $ conversion: 44.65.(1) 3rd largest wireless operator in the world refers to in-country (single country) operator based on the number ofsubscribers. 5th largest mobile operator on basis of number of subscribers.(2) Through its subsidiary Bharti Infratel &Indus Towers in which Bharti Infratel owns 42% stake.
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Latest Results 1Q12
Key operating and financial metrics Continued Strong Performance
Q1 FY 12* Y-on-Y
Customers 230.8 mn 25.9.%
Revenue $ 3,798 mn 45%
Wireless CMS 19.8%
Wireless RMS 30.0%
Total MOU carried in Qtr 251.9 bn
Balance sheet strength:EBITDA $ 1,276 mn 34%
Cash Profit $ 1,085 mn 26%
Net Income $ 272 mn -25%
EBITDA Margin 33.6%
ROCE 8.2%
Assets $ 33.2 bn
Net debt $ 13.4 bn
Net debt to EBITDA 2.8 Times
(annualized)
Continues to be FCF positive on at South Asia
Level.
Includes full quarter numbers for AfricaExchange rate as of 30th Jun 2011: 44.72
**RMS as per March quarter released by TRAI
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Wireless Services
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Indian Market
Overall Telecom Market Wireless Market
Population 1.2 billion
Relatively large youth population
Telecom penetration c.73.97%
(~885.99 mn telecom subs)
Sub number should go upto 1 Billion by 2015
Sub Base c.851.70 mn
Wireless Penetration c.71.11%
Operational metrics per month
Usage per user 369 min
Broadband penetration 1.64% (12.32 mn)
Govt. target to reach 20 mn. Broadband subs by 2011
ARPU ~ US$ 3.67
Rate per minute ~ US$ 0.01
VAS ~ 13.5%
Lot of opportunity ahead.
Note: (1) Subscriber numbers and wireless penetration numbers as on June 30, 2011 are as per TRAI (2)Other indicators on the slide are based on Global Wireless Matrix 1Q11 dated 28th Apri11 by MerrillLynch, and reflective of Industry numbers.
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Rapidly Growing Indian Wireless Market
Net Adds in July 6.7 Mnlesser than over last 3
months average run rate of 13.4 MnS-curve triggered
50%
60%
70%
80%
90%
600
700
800
900
)
16
18
20
22
24
26
C lo s ing Subs cribers N et A dds
0%
10%
20%
30%
40%
1999 20012003 2005 2007 2009 2011 2013 2015 2017 2019
India - Fastest Growing Market in the World
Note: (1) Actual Data as per Industry Association Releases and Industry Estimates in India.
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100
200
300
400
Nov-
03
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ay-
04
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ay-
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ay-
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Nov-
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ay-
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ay-
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ay-
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(m
n
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2
4
6
8
1012
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Wireless Market Structure in India
Subscriber Trends Customer Market Share CMS (%)
171
145 143
101 9688
115
139
113 111
7971 75
64
31 31 3222 25
13
51
20
40
60
80
100
120
140
160
180
(mn)
19.9%
16.9%
11.7%
10.3%
13.4%
11.2%
16.7%
9.8%
11.5%10.8%
12.1%
17.1%17.4%
21.3%
7%
9%
11%
13%
15%
17%
19%
21%
23%
25%
Airtel continuously consolidating its market leadership position despite intense competition Airtel current monthly net adds at 1.5 million vs. 2.6 million a year ago
Airtel ranks 1& 2 in 16 circles in terms of number of subscribers
Over 65% of net adds coming from B&C circles (rural India)
Airtel Continues to lead on Revenue Market Share
Note: Based on subscriber data for India as on July 31 2011 as per TRAI press release.
-
Airte
l
Reliance
Vodafone
BSNL+MTN
L
Idea
Tata
Others
Jul-11 Jul-10 Net adds during the year
5%
Airtel
Relianc
e
Vodafone
BSNL+MTN
L
Ide
a
Tata
Others
CMS( Jul'11) CMS( Jul'10)
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AirtelPerformance Indicators (Operational)
Customers & Market Share Prepaid/Postpaid
96.0% 9 6.1% 9 6.2% 96.3% 96.3%
99.2%97.5%
98.2%98.1%
97.3%
76%
80 %
84 %
88 %
92 %
96 %
100%
Q111 Q211 Q311 Q411 Q112
Prepaid Subs Prepaid Net Adds
136.6 143.3152.5 162.2 169.2
21.5%20.8%
20.3% 20.0% 19.8%
0
60
120
180
Q111 Q211 Q311 Q411 Q112
6%
10%
14%
18%
22%
Customers (mn) CMS (%)
ARPU & RPM MoU/Sub/Month & MON
42.7643.1344.1944.4444.83
19019419820 2
215
-
10
20
30
40
50
60
Q111 Q211 Q311 Q411 Q112
0
50
100
150
20 0
250
30 0
RPM (Paise) ARPU ( INR)
445449449454480
228,331218,190
205,018196,196195,197
420
430
440
450
460
470
480
490
Q111 Q211 Q311 Q411 Q112
80,000
130,000
180,000
230,000
280,000
MoU/Sub (Min) Total minutes on Network (Mn Min)
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Current positioning and way forward
Leadership Positioning Growth strategy and plans
RevenueRevenue New RevenueStreams
Revenue size(>$ 9 Bn)
Revenue Market Share
Changing face of growth
through M-Com, M-
entertainment & 3G
Cost
Non financial
vitals
Maximizing
usage
Net Adds
Brand
Distribution
Churn lower than industry
Spectrum Mix (900/1800 MHz)
Improving cost efficiencies
Lowest cost GSM network
Increasing the usage through U&R drive
Wallet share
Driven by rural strategy
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Telemedia Services
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A Snapshot
Largest private operator having presence in the voice , broadband , IPTV and data.
Focus on SMB segment & Broadband at Homes
Key Performance Indicators1. Voice (wire-line) and Data (DSL) Presence in 87 top cities of India.
2. Target Segment : Retail and Small and Medium Enterprises.
end June 2011. .
4. Broadband (DSL with speeds>256 kbps) penetration at 43.1% of customer base.
5. Average ARPU for Quarter ended Jun11 $ 21.3 per month.
6. Segment contributing to 7% of overall revenues of the company.
7. EBITDA margin of over 45.5%.
Broadband revolution to follow wireless revolution in India
SMB opportunity across ICT stream
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Enterprise Services
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A Snapshot
Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers
Corporates: Single point of contact for all telecommunication needs for Top 2500 corporate customers,
providing full suite of voice, data, and managed communications solutions
Carriers: Wholesale voice and data services to over 130 domestic and 450 internationaltelecommunications carriers, as well as ILD and NLD carriage for Airtels own customers
Extensive national and international infrastructure
Pan-India network with 148 792 Route kms o o tical iber over 4 150 MPLS and SDH POPs
Access network (terrestrial) in 87 cities, Wimax network in 143 cities, and over 1,500 local POIs
International network with 225,000 Route Kms, connecting over 50 countries and 5 Continents.
Key Performance Indicators (Q112)
NLD Minutes Carried: 19.9 Billion ; ILD Minutes Carried: 3.1 Billion
Revenue: Rs.10,410 Million (8 % Segment Contribution Share)
EBITDA: Rs. 2,303 Million (22.1% EBITA Margin)
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Emerging Growth Engines
Passive Infra
Africa
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Financial Performance Passive Infra
Revenue EBITDA
438
471
490 493509
400
450
500
550
192
183
189
175
155160
180
200
35.5 37.1 38.6 37.0 37.7
Focus on tenancy enhancementdriving Revenue & Profitability
The above nos for Revenue & EBITDA are in IFRS as per Quarterly Report & includes proportionate
share (42%) in Indus .
300
350
Q111 Q211 Q311 Q411 Q112
100
120
140
Q111 Q211 Q311 Q411 Q112
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Operational Performance Passive Infra
Infratel Indus
Towers (nos) & Sharing Factor Towers (nos) & Sharing Factor
31,19631,831
32,42432,792 32,942
1.65 1.651.68
1.731.77
30,000
31,000
32,000
33,000
34,000
Q111 Q211 Q311 Q411 Q112
1.40
1.50
1.60
1.70
1.80
No o f t ower s S har ing Fac t or
104,901106,438
107,789 108,586108,922
1.751.78 1.80
1.831.87
97,000
99,000
101,000
103,000
105,000
107,000
109,000
Q111 Q211 Q311 Q411 Q112
1.20
1.30
1.40
1.50
1.601.70
1.80
1.90
2.00
No of t ower s S har ing Fac t or
Sharing Revenue per Sharing Operator per Month (Rs) Sharing Revenue per Sharing Operator per Month (Rs)
Aims to enhance the tenancy ratio & be the preferred choice of vendor for all existing
and new operators
36,20336,59937,85938,041
36,290
25,000
29,000
33,000
37,000
41,000
Q111 Q211 Q311 Q411 Q112
Sharing Revenue per Sharing Operat or per month
31,963
30,50130,84731,38930,379
15,000
20,000
25,000
30,000
35,000
Q111 Q211 Q311 Q411 Q112
Sharing Revenue per Sharing Operator per month
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Transaction Rationale
Clean /certaintyof transaction
Shareholding andManagementControl
Brand Airtel
100% Cash Transaction
Focus on CoreMiddle East
Operators
GlobalStature
Emerging MarketCharacteristics
Strong Platformfor FutureExpansion
ManageableDeal Size
Diversification ofIndia Risk
Avoid Greenfield
Speed inTransaction
Repayment ofDebt
SignificantSynergies
Low CompetitiveIntensity
The transaction meets the objectives of Airtel with long term strategic benefits
and creates tremendous shareholder value
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Differences between the two markets
Mobile Penetration
Business Model Low usage, high pricing model
40%
High usage, low pricing model
70%
Average Number ofCompetitors
3-510-12
India Africa(1)
Minutes of Usage
ARPU (US$)
ARPM (US cents )
~121
~$7
6
~445
~$4
1
And therefore huge opportunity space
Source: Global Insight, annual / quarterly reports.1. Data pertaining to the 16African countries where Zain Africa has operations.
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Another Growth Engine - Africa
Customer Base : 46.3 Mn
Performance Indicators (CY 2011):
Revenue: $ 2,878 Mn
EBITDA: $ 6,30 Mn
Prepaid Base: 99.3%
one of the highest in the
world
Usage per sub per month: 121 Minutes
one of the lowest
ARPU: ~ US$ 7.3
Rate per minute: ~ US 6.3
one of the highest
VAS: ~ 8.4%
One of the lowest
Note: Above numbers based on Quarterly report ended 30 June ,2011.
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Recent Honors
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Bharti airtel Leadership in business Recent Honours Economic Times Telecom Awards 2011
Innovative Product Value Added Service
Customer Experience Enhancement
Frost & Sullivan 2011 Asia Pacific ICT Awards
Enterprise Telecom Service Provider of the Year
Wholesale Data Service Provider of the year
Mobile VAS Provider of the Year
Indias Most Innovative company - Wall Street Journal
Telecom Operator award 2011 - Won in 5 categories.
Most Admired company
Best National Mobile operator
Operator with Rural performance
Best VAS provider
Best Enterprise services
DSCI Excellence Award 2011 for Security in Telecom- Security Leader of the Year'
Bharti Airtel rated as Indias Best Enterprise Connectivity Provider- Users choice award Instituted by PC Quest
Sunil Bharti Mittal : Global Game changer at Economic Times Telecom Awards 2011
Global Telecom Leader - Voice & Data magazine
Akhil Gupta, Deputy Group CEO and MD - CFO India Hall of Fame by CFO India
Manoj Kohli, CEO( International) & Joint MD - Telecom Man of the year - Tele.net
Business world FICCI SEDF Corporate Social Responsibility Awards 2009-10
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thank you