Airtel PPT Sep-11

8/3/2019 Airtel PPT Sep-11

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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.

-

100

200

300

400

Nov-

03

M

ay-

04

Nov-

04

M

ay-

05

Nov-

05

M

ay-

06

Nov-

06

M

ay-

07

Nov-

07

M

ay-

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Nov-

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M

ay-

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Nov-

10

M

ay-

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(m

n

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2

4

6

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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

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Airtel PPT Sep-11

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