MTN IrancellAlireza Dezfouli
MD
2
Overview
Penetration 24% (Jun 07)Market sizing 46.3m (2011)Population 70.7m (Jun 07)
IslamReligion
T bill, bond 15.5%Local Rates
Persian, Turkish, KurdishLanguage
$3,446GDP/Capita
Demographics
LC/US$ = 9,527Currency
15.4%Inflation
Economics
Source : Pyramid Research
3
Market dynamics
• Real GDP expected to grow 4% p.a. underpinned by high oil prices
• Iranian telecoms market expected to reach USD 13.4billion by 2012
• Strongest growth from data
• Penetration expected to reach 65% by 2011
• 2 major mobile operators, MCI and MTN Irancell• Irancell market share 20% end of October
4
Market dynamics
Source : Pyramid Research
High growth potential
5
Market players
3% land50% population
Nokia-SiemensEricssonHuawei
3.7m (Sept)
2006
MTN
1 016 cities15 citiesCoverage
Nokia-SiemensTsystemsHuaweiEricsson
Nokia-SiemensSuppliers
16m active450,000 activeSubscribers
19932004Launch date
MCITaliya
6
Encumbent holding structure
TCI
• Privatisation anticipated• Envisaged draft licence expected
end of 2007
TIC
• Infrastructure company• Long distance
transmission links & international gateways
TCPs
• Provider of fixed line services on behalf of TCI
• Rely on TCI licences
MCI
• Provider of pre-paid & post-paid services
• Procures long links from TCI & utilisesinternational gateways
Taliya
• BOT providing pre-paid services
• Subs limited to 2 million
7
Licence
Period
Fees
Spectrum
Coverage
Tariffs
• Granted Nov 2005 • Renewable 2 periods of 5 years• Effective July 2006 • No self-provision of intercity infrastructure and• 15 years international agency rights
• Initial fee 300m€ • Regulation fee – 0.25% of revenue• Each contractual year 28.1% of revenue • Numbering fees
(min of 80% of B.P revenue) • Limited to 32%• Universal service fee – 3% of revenue
• 900 MHz• 1800MHz
• Year 1 - 50% population Year 2 - 56% of population Year 15 - 85% of population- 248 towns - all provincial cities- 1000km of road - 4 423km of road
• Maximum premium of 20% on TCI (MCI) tariffs
8
Operational structure
Board of Directors
Human ResourcesSaeid Khak
Rah
ProcurementRahimi Rad
FinanceFerdi
Moolman
Internal Audit(vacant)
Corporate Services
Rizza Fazli
Legal and Regulatory
ThekoMabone
MarketingLarry Annetts
Chief Operating
officerJyoti Desai
Sales & Distribution
SaeidSameti
Capital Program GroupMartin
Lamprecht
Chief Technical
Information Officer
Ali AsgharEinipour
Managing DirectorAlireza Dezfouli
9
Highlights
Subscribers/ARPU • Subscribers at 3.7m Sep 07
• Up 88% from Jun 07
• Currently gaining approximately 50% of new connections
• ARPUs remained relatively consistent due to high incoming minutes and usage stimulating packages launched in Jun 07
• Interconnection agreement ongoing
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Mar-07 Jun-07 Sep-07Closing base
$10.0$10.76
$11.0
ARPU
n/a(181)mEBITDA
n/a165%Capex/ Revenue
n/a431mRevenue
Jun 2006Jun 2007ZAR
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Infrastructure
5.6mTotal expected active subscribers
50%% Population covered
2,846Total number of BTS’s
1,423Total number of sites
50Total number of BSC’s
5Total number of MSC’s/ MSC-S’s
Aug2007
Technologybenchmarks
3%% land
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Rollout plan
18%
3%
63%
3%
13%
NSS VAS BSS TX Other
Anticipate spending 75% of budget • Split architecture
• 3 core locations provides resilience
• Tehran (x2) & Esfahan
• IP core and backbone provides ready upgrade path to converged services and 3G
• Capex R2 863m
• Pursuing ISP licence and Dark Fibre
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Distribution
5%
31%
4%
7%
45%
8%
FMCG Distribution GSM Retail
Handsets Training
Internet Internet Café
Distribution channels
13
Handsets StarterPacks
AirtimeSales
Post PaidAcquisition
Post PaidPayments
Distribution
• Improved distribution channels (3 900 dealers, service centres in more than 180 cities)
1MTN
2Handset
Distributors
3Consumer Electronics
4Services Sector
5Retail
High
Medium
LowNo bundle option
available
14
MTN Irancell:
Call Center• 24/7 call center with expert agents• Single Service Portal provides agents with instant access to customer account management systems
Provides country wide serviceReduces time to address customer needs
Self management• IVR and USSD
• Customers can place requests anytime, anywhere
• E-Care• Customer account management portal
Call center load reductionBill issuing and cost reduction
Dealer Portal• SIM swap• Issue bills• Registering customers• Change of ownership• Activate / De-activate VAS
Country wide network of service outletsCall center load reductionBill issuing load and cost reduction
15
Voice proposition
Flat competitive rates for national callsCompetitive proposition as competitor charges extra for distant calling and national roamingAttractive for fix to mobile migration
Provides best value for usage
Talk for 30 minutes and pay the first 3 minutes of call
Irancell has seen an increase in calls longer than 3 minutesIncreased loyaltyDrive subscriber acquisition
Innovative subscription packages
Opening new segments and attracting high value customers and youth segmentIncreasing ARPUHigh adoption rate
Standard per second billing – no round up charges
16
Data proposition
GPRS for all customers• No charge for being on line – only for data
exchangeInnovative for Iran marketEnabling email solutions
• Data SIMS enabling SMS• Special rates
Addresses demand for telemetry and tracking usesExpanding GPRS usage~4,000 Data SIM subs after 5 weeks of launch
Segment plans caters for different levels of data usage
Unique SMS serviceStimulates adoption of boostersPush on-net SMS and communitiesGenerates 50% of total SMS
Vitrain content portal• Enables customised ring tones, phone or gift
content
Stimulates GPRS trafficEnables eCommerce and micro payments
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Looking forward
• Demand for new innovations
• Large addressable market
• Significant MTN experience
• Youthful population
• MTN competitive and agile
• Underdeveloped legal / judicial environment
• Reliance on third party transmission
• Unpredictable and high profile political environment
• Entrenched competitor
• US embargo
ChallengesOpportunities
1818