Post on 24-Oct-2020
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Asia Investor & Analyst Field Trip 2014
Bangladesh
Vivek Sood, CEO
2
A fast growing resilient
economy
● 8th most populous with 167 Mn people
– Density of 1131 / square KM
– Median age of 24.3
● Domestic consumption driven GDP
● Growing per capita income
● Strong currency among peers
● Stable inflation
*Real GDP growth and Std Dev
Source: World Bank
GDP considered for Frontier market only
* 10 Years average from 2004 to 2013
Inflation correlation with peers
6.5%
6.5%
6.4%
6.2%
4.8%
4.5%
4.4%
4.0%
Sri Lanka
Nigeria
Vietnam
Bangladesh
Kenya
Pakistan
Morocco
Tunisia 1.7
1.5
2.1
1.6
0.3
0.9
1.4
1.3
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Bangladesh Pakistan Sri Lanka Vietnam
An industry ahead of its
time
● Competitive market of 6 players
– 3 players consist 89%
● 99% prepaid with voice dominance, encouraging data adoption
● Widespread network coverage
● Real penetration of around 46%
● Flagship ‘Digital Bangladesh’ vision of Government
● Very high and unpredictable tax regime
Subscriptions (Mn) and Penetration*
* GP own estimation
68.64
85.45 97.18
113.78 118.49
27.5%33.2% 37.2%
44.5% 45.7%
2010 2011 2012 2013 Sep'2014
An exciting journey of connecting people
1997- 99 2000 - 02 2003 - 05 2006 - 08 2009 - 11 2012 -14
M2M Service
Prepaid Service
WAP service
Best Joint venture
Enterprise
Prepaid product with PSTN
connectivity
2 Mn Subscriber
5.5 Mn 21 Mn 36.5 Mn 50.7 Mn 1 Mn Su
bscrib
er
ba
se
A company bringing magic
of closeness to the mass
● Connecting 50+ Mn people
● Nationwide robust 2G network covering 99% of population
● 45% population under 3G coverage
● Largest listed entity of $ 5.5 Bn*
● Top line comprising of 1.3% of GDP**
● Long term loan of $ 345 Mn
● Largest corporate tax payer
● Direct and indirect employment of 700k lives
*At Dhaka Stock Exchange as of 24 Nov 2014
** Considered real GDP for 2013
Regulatory landscape
● Increasingly consultative approach
● Cooperation with other sector regulators e.g. Bangladesh Bank,
NBR etc.
● Collaboration within mobile industry, and with other important
stakeholders
● Long term road map for predictability and certainty lacking
Corporate governance framework
Shareholders
Board of Directors
Treasury
Committee
Audit
Committee
HR
Committee
HSSE
Committee
Management Team
Organization
CEO Company
Secretary Internal Audit
Stakeholders
Recognitions that inspire us
mBillionth Award GSMA Award
Brand Award
Declaration of Best
Presented Annual Reports
2013 by SAFA & ICAB
Opportunities in a changing
environment
● Connecting the unconnected
● Growing internet penetration and new services
● Enabler of Mobile Financial Service
● Social VAS in agriculture, health & education
● Partnership with ‘Accenture’
Strategic priorities going
forward
● Achieving no 1 position in Net Promoter Score (NPS)
● Acquiring 50 Mn internet users
● Driving efficiency through performance management and
territory approach
● Developing scale in Mobile Financial Services
Asia Investor & Analyst Field Trip 2014
Bangladesh
Dilip Pal, CFO
A profitable company
● Revenue CAGR (5 yrs) of 9.1%
● Consistently maintaining high EBITDA margin
● Healthy OCF and NPAT margin
● APPM stabilizing
Revenue (BDT Bn) and EBITDA Margin
OCF (BDT Bn) and Margin
EBITDA is before other items
OCF defined as EBITDA before other items, less capex excl spectrum fees
YTD 2014 denotes figures upto September 2014
Deconsolidation of GPIT considered from 2013
ARPU (BDT), AMPU, APPM (BDT)
180 178 165 166 170 165
254 255 240 240
250 243
0.71 0.70 0.69 0.69 0.68 0.68
Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14
ARPU (BDT) AMPU APPM (BDT)
74.73
89.06 91.92 96.62
76.74
49.5%53.4% 53.3% 50.7% 54.0%
2010 2011 2012 2013 YTD 2014
+6.1%
28.54
34.65 36.36 36.36
32.25
38.2% 38.9% 39.5% 37.6%41.9%
2010 2011 2012 2013 YTD 2014
12.0
20.5
14.0 14.0
9.5
4%
12%
9% 8%
3%
2010 2011 2012 2013 2014(Interim)
Healthy shareholder return
● 66% annualized cumulative return
● Attaining more balanced capital structure
● Stated dividend policy
● Outperforming the market index
Dividend Per Share (BDT) and Yield*
Relative Market Performance in DSE*** Total Shareholder Return**
*Considering yearly average closing price of DSE
**Including dividends reinvested
*** Price and index rebased
-90%
-40%
10%
60%
110%
160%
210%
260%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
50
70
90
110
130
150
170
190
210
230
250
Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14
% of Total Turnover (RHS) GP Price DSEX DSE30
Driving revenue growth
● Volume growth from untapped segment
● Growth in data subscribers
– Higher voice revenue
– Contribution from data
● Retention of HVU with innovative value propositions
● Youth opportunity capturing VAS and contents
● Adjacent business
Structured effort towards
operational excellence
● Cost benchmarking through globally reputed consultant ATKearney
● Learning & synergies at the Telenor Group level
● Robust Opex management process with focus on granularity
● Stable opex margin
Opex Margin
YTD 2014 denotes figures upto September 2014
42.5%39.1% 40.1%
41.3%38.0%
2010 2011 2012 2013 YTD 2014
Bangladesh
Region
Area
Territory
Cluster formation:
Territory Approach
● Thana is the smallest Govt. administration hub with 50-90 Sq km
● Each territory contains on an avg 1-2 thana based on the following:
–Size & business – 200 Sq Km Max
–Telco POS: 200-250 POS
–Number of BTS: 40-50
–Avg Travel Time (E2E): 4 - 5 Hours
● Territory officer and area manager
● Similar principle followed in area formation
9 Region
34 Area
114 DTR
222 Territory
9k BTS
Growth story is intact. Data the main driver.
Grow profitably
Ambition to retain market share
Investment in network for strengthening leadership position
Summary
This presentation includes “very high level guidance on the future" These may include, without limitation,
statements relating to our future business development and economic performance, future earnings and cash
flow, our business strategy, regulatory changes, future policy of the Bangladeshi Government relating to the
telecommunications industry in Bangladesh, our competitive position and the effects of competition, and the
amount and nature of our capital expenditures and capital commitments. These guidance represents our
current views with respect to future events and are not a guarantee of future performance. You are cautioned
not to rely on these very high level guiding statements. A number of important factors could cause actual results
or outcomes to differ materially from those expressed in any forward-looking statement.
We have obtained certain market data, industry forecasts and data used in this presentation from market
research, publicly available information, including governmental publications, and industry publications. Industry
publications generally state that the information contained therein has been obtained from sources believed to
be reliable, but that the accuracy and completeness of the information is not guaranteed. While we believe
these industry forecasts and market data are reliable, we have not independently verified this information, and
we make no representation as to the accuracy of this information.
Because the market data included in this presentation is derived from multiple sources, you should not assume
that it has been compiled on a consistent basis. You should exercise caution when comparing market data from
different sources or across different time periods. We make no representation that such market data is accurate
or complete or that it has been compiled or presented on a consistent basis.
Disclaimer
Cluster Way of Work
The New Way of Work – Regional Approach
National Approach Looking at the Country
Regional / Cluster
Approach Granular way of looking into
cluster markets
HH Income 20K+ 5%
HH Income 20K+ 9%
HH Income 20K+ 10%
HH Income 20K+ 53%
HH Income 20K+ 9%
HH Income 20K+ 28%
HH Income 20K+ 28%
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Unique Economy and Culture
Company Confidential
Agriculture
Industrial/trading
Agro/ Industrial
Remittance
Commercial Hub
Agro/Riverine
Trading/Seaport
Regions
Area
Distributor
Territories
BTS
Areas (3-7 areas per
Region)
Regions based on
Geography and Business
Volume
Distributors per Area
based on Partner and
Market Profile. The DTR are
3rd Party Partners Few Territories per Area.
The territories are mapped
according to the geography,
volume and POS Numbers.
Each Territory is managed
by Territory officer.
A Territory contains • Xx BTS
• xx Telco POS
• xx ERS POS
Grameenphone - Regional Sales Structure
23 Confidential
Cluster Approach Strategy
From National to Granular
Implement a Cluster Approach from Improving our Competitive Positions in the Markets and Grow Revenue &
SIM Market Share in Respective Territories
Indicators Drivers
Revenue /
Reload Sales
Gross Add
Sub Base
Strategic Dimensions
Distribution
Communication
People Product
Network Cluster
Level
Actions Revenue Market Share
Active SIM
Share
Main SIM
Share
Internet
Revenue
MFS
Cluster Strategy
Right Insights, Right Actions
Action Planning
“KPI”
Insights & Analytics
Issues & GAPs
Desired Picture & Targets
Distribution Product Comm./
Visibility Network People
Recipe Mapping – Regions + HQ
Cluster Level Actions
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Cluster
KPI
New Add
Reload Sales
Devices POS
Expand
NPS
Network KPI
Result Indicators
Market
Share
Distribution Product/Sub Analysis Network Investment Industry
Revenue
The KPI Flow
Linked with
Performance and
Bonus/Incentive
Monitored
Regularly to Impact
KPI
Distribution Quality
and Availability Product / Campaign
Performance Traffic/Utilization
Strong Performance Management & Right Actions
Territory KPI1 KPI2 KPI2 Key Insights Actions
A Trend Target Relative Maintain
B Target Relative Trend POS, Campaigns Focus: Distribution,
People
C Trend Growth Relative Utilization, Awareness Focus:
Communication, BTL
D Relative Relative Relative Network Issues Fix Network Issues
E Target Relative Growth HV Churn Focus: New Offer,
Micro Campaign
Organization Wide Collaboration to Develop Action
Points
Organizational Collaboration Keeping Functional & Regional Alignment
Strategic Planning:
1. National War Room
2. Information alignment
3. Region specific Focus
4. Investment
Prioritization &
Profitability Analysis
5. Product &
Communication
Strategy
6. Revenue, RMS, RG
Action & Execution:
1. Regional War Room
2. Performance Mgt
3. Territory specific TM
Planning
4. Focus on Execution
5. Sales, Campaign,
Distribution, RNPS &
Visibility
Some Demonstrations
Cluster Approach – KPI Monitoring
Sub Reload
Sales Growth
Internet
MobiCash Expansion
Devices
Distribution
Quality Cluster KPI Focus
Setting Actions
Cluster Approach – Network Utilization U
tiliz
atio
n C
ate
gory
6
0 PLAN COMBAT
MAINTAIN
Sites
HIGH FOCUS All Out Drive
Sites
HIGH FOCUS All Out Drive
Sites
Drop Growth Change in Utilization
Increasing Investment Efficiency by
Focused Activity Planning
Campaign communication Brand Promoter Activity
Rural Activation Events
Challenges: 1. Revenue stagnant 2. Campaign/Product Awareness
Results:
Market share Increase
Cluster : A
Segment based campaign Communication BTS Based event
Results:
Increase in Campaign Takers.
Low BTS utilization sites decreased.
Challenges: 1. Low Utilization of Network
Cluster : B
Key Component Engaging Retailers & Customers
Hype generating activities in retail
hotspots
MT & Back office employees’ visit to
retail
Colorful customer engagement activities in flagship channels
Strong Performance Management Culture Celebrating with Management
Q1 2013: Sylhet Q2 2013: Dhaka Q3 2013: Bogra
Q4 2013: Barisal Q1 2014: Sylhet
Empowerment – Territory Level Actions
Driving Internet for All in Bangladesh
Erlend
Prestg
ard,
CSO
Grame
enpho
Although low-income, Bangladesh is a country of strong
growth and an exceptionally young population
Country overview
• Population: 166 million
• 51% of population < 25 years
• GDP per capita of USD 752
• GDP growth ~6%
37 Source: ITU, World bank and CIA World Factbook
Grameenphone is a strong and profitable player in a
competitive, but growing, telecom market
38 1 Active data users baed on 90d users using GP internal estimates
Q3 2014 numbers, 1 USD = 77.49 BDT,
EBITDA before other items
50 Mn
~47% Revenue market share
BDT 165 /
USD 2.1
Subscriptions
~54%
Market share
EBITDA Margin ARPU
BDT 25.7Bn /
USD 331.7Mn
Quarterly revenue
~45% Real mobile penetration
~20% Active data users
Mobile penetration1
GP regular data user base has grown over the last
quarter, mainly driven by micro data packs
39
Regular internet user base have growth
(90 day, > 150 KB)
Median data usage is also in a growth
trajectory
Aug-14
+14%
Oct-14 Sep-14
+28%
Oct-14 Sep-14 Aug-14
Internet penetration in this market is “push based” – in
other words, we drive the market for internet
1-Jan-14 1-Feb-14 1-Mar-14 1-Apr-14 1-May-14 1-Jun-14 1-Jul-14 1-Aug-14 1-Sep-14 1-Oct-14 1-Nov-14
Continuous push to drive down handset devices –
although cheap, they are still a hurdle in BD context
41
GP Initiatives to introduce affordable internet phones
EDGE Feature
phone
USD 18.75
3G Smartphone
(FireFox)
USD 58
Pushing data enabled handsets down in price
BDT 850/USD 10.6, unbranded
Chinese basic
BDT 925 /USD 11.5, local basic, strong
brand
BDT 1,500/USD 18.75, Edge+Java,
good local
BDT 4,000/USD 50, low-end 3G
smartphone
BDT 6,500/USD 81, most selling
smartphone
BDT 20,000/USD 250 high-end local
GP: Regaining coverage supremacy by building on the
widest 3G network coverage in Bangladesh
42
Q3 ’14 Q2 ’14
Regaining the coverage supremacy by rolling out new
3G sites
Existing
New roll out in quarter
• 1st operator cover all 64 administrative
districts in Bangladesh
• 3G coverage of about 2/3 of 3G
handsets
• ~ 45% of population within 3G coverage
• ~ 99% EDGE or 2G internet coverage
• Additional coverage build up in Q4 ’14 –
investment on network roll out to
continue in 2015
• Competition ramping up their 3G
coverage too
GP working on two fronts – acquire new customers with
affordable product & capture smart phone segment with
all-in bundles
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• 1 Taka whole day internet
• 3 MB data, 2G
• New user acquisition
• Launched on July ’14
• Helped to grow regular data subscriber base
by over 15% in two month period
Data centric monthly commitment bundles with Data +
Voice + SMS + MMS Offered free Facebook to stimulate usage & acquire new
data users
Our internal analysis shows positive impact of data
usage on service ARPU – but causes “prisoner’s
dilemma” dynamics
44
Data users’ ARPU is higher than non-data
users’ ARPU
Moving forward, data usage to take a greater
ARPU share
2014 2013
Voice & others
Data
Data Non data
New users
Data Non data
Existing users
Competition not monetizing speed / driving down 3G
prices / aggressive roll-out = demanding dynamics
45
Data prices being driven down by competition
3G data at the price of 2G/ unlimited utilities with
data packs
Prices of 1 GB data has fallen by 25% in 3
quarters
300
400
Q4 ’13 Q3 ’14
-25%
Future of internet growth is very bright in Bangladesh;
GP to get its fair share
• All major factors to drive mobile internet penetration in place
– Youthful population (majority population
below 24 years)
– No fixed internet infrastructure
– Mobile internet network coverage across the
nation
– Ever decreasing prices of internet devices
– Strong (> 6% year on year) economic
growth
• Monetization and competitive dynamics will remain challenging
46
Driving Internet for All in Bangladesh
Erlend
Prestg
ard,
CSO
Grame
enpho