Investor Presentation

Transcription

1 Investor Presentation Bharti Airtel Limited July 2010

2 Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end. This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision. The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. Investor Relations :- For any queries, write to: ir@bharti.in

3 Advantage India Population: 1.2 billion increasing urbanisation relatively large youth population GDP Growth (Real) : ~8.6% second highest growing economy GDP Size (PPP adjusted): US$ 3 trillion fourth largest economy in the world Telecom penetration: 56.83% ( mn telecom subs) one of the lowest Govt. targets to reach 1 bn telecom subs by 2015 Broadband penetration: 0.78% (9.45mn) one of the lowest Govt. target to reach 20 mn. Broadband subs by 2010 Deep Domestic Demand Huge Growth Potential Note: (1) *Telecom and Broadband penetration as on June 30 th 2010 as per TRAI press release. 3

4 The Company...Bharti Airtel An Integrated Telco Wireless Services 2G/3G Rural Market Sri Lanka Bangladesh Telemedia Services Fixed Line Broadband Enterprise Services Carriers Corporate Passive Infrastructure Services DTH (Media) IPTV Fully integrated telecom player offering end to end solutions 4

5 Bharti Airtel - positioning in the world and India 3 rd LARGEST wireless operator in the world 1 LARGEST private INTEGRATED telecom company in India 5 th LARGEST INTEGRATED telecom operator in the world LARGEST WIRELESS operator in India LARGEST private FIXED LINE operator in India LARGEST operator in NLD, ILD and VSAT business LARGEST TELECOM company listed on Indian Stock Exchanges Note: (1) 3 rd largest wireless operator in the world refers to in-country (single country) operator based on the number of subscribers. 5

6 Latest Results Q4 FY09/10 Key operating and financial metrics Continued Strong Performance Customers Q4 FY mn Y-on-Y 35.2% Wireless Customer market share leadership at 21.5%. Total minutes on network carried in Q4 196 mn Revenue EBITDA $ 2,228 mn $ 847 mn 2.4% -4.5% Total employee strength 18,354 Balance sheet strength: Assets $ 14 billion Cash Profit Net Income $ 887 mn $ 455 mn 5.8% -8.2% Net debt nil Net debt to EBITDA nil Continues to be FCF positive on a standalone basis EBITDA Margin 38.0% Net Profit Margin ROCE ROE 20.4% 22.0% 25.8% The company recommended a dividend of Rs.1 per equity share of Rs. 5 each (20% of face value for the year This is subject to approval by shareholders at the ensuing AGM. 6

7 Segment contribution Rev, EBITDA and Investment REVENUE EBITDA 21% 9% 2% 12% -8% 8% 82% 26% 10% 63% Mobile Services Enterprise Services Others Telemedia Services Mobile Services Passive Infrastructure Services Enterprise Services Others INVESTMENTS Telemedia Services Passive Infrastructure Services 22% 3% 51% 14% 11% Mobile Services Enterprise Services Others Telemedia Services Passive Infrastructure Services Note: (1) Revenue and EBITDA is gross of inter segment eliminations. 7

8 Performance dashboard - 3 line graph Amount in Rs. Mn 110, , ,000 95,000 90,000 85,000 70% 68% 64% 62% 61% 100,557 98,245 99,416 98,455 97,722 37% 37% 38% 40% 34% 80% 70% 60% 50% 40% 30% 20% 80,000 10% Q4 FY09 Q1 FY10 Q2 FY10 Q3 FY10 Q4 FY10 Gross Revenue (Rs mn) LHS Opex to Gross Rev (RHS) Capital Productivity (RHS) Productivity Indicators = growing revenues + cost efficiencies + capital productivity 8

9 Wireless Services 9

10 Indian Wireless Market KPIs JK Sub Base : mn second largest market GUJ RAJ HP PB UP(W) HAR DEL DELHI UP(E) MADHYA MP PRADESH` BH WB AS NE Wireless Penetration: 53.77% lowest in the world HHI Index: very high one of the most competitive market Prepaid Base: 96% one of the highest in the world Usage per sub per month: MUM MAH KK KER AP TN CHN OR Kol Metros A Cat. B Cat. C Cat. Minutes: 381 ARPU: ~ US$ 4.08 one of the highest one of the lowest Rate per minute: ~ US$ 0.01 one of the lowest in the world VAS: ~ 11.8% One of the lowest Note: (1) Subscriber numbers and wireless penetration numbers as on June 30, 2010 are as per TRAI release (2) Other indicators on the slide are based on Global Wireless Matrix 2Q10 dated 9 th July 10 by Merrill Lynch, and reflective of Industry numbers. 10

11 Rapidly Growing Wireless Market Net Adds in Jun 18.0 Mn greater than over last 2 months average run rate of 16.6 Mn Series2 Series S-curve triggered 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Fastest Growing Market in the World Note: (1) Actual Data as per Industry Association Releases and Industry Estimates. 11

12 Wireless Market Structure Subscriber Trends Customer Market Share CMS (%) (mn) Airtel Reliance Vodafone BSNL+MTNL Idea Tata Others 25.0% 23.0% 21.0% 19.0% 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% 5.0% 21.5% 24.0% Airtel 17.4% Reliance 18.6% 17.9% 17.2% Vodafone 12.3% 13.8% BSNL+MTNL 10.8% 10.0% Idea 11.4% Tata 8.7% 9.4% Others 7.0% Jun-10 Jun-09 Net adds during the year CMS(Jun'10) CMS(Jun'09) Airtel continuously consolidating its market leadership position despite intense competition Airtel current monthly net adds at 3.04 million vs million a year ago Airtel ranks 1& 2 in 17 circles in terms of number of subscribers Over 59% of net adds coming from B&C circles (rural India) Airtel Continues to lead on Revenue Market Share 12

13 Company Highlights on Wireless Services 13

14 First mover advantage / Product innovations Electronic Recharge / Micro Prepaid Life time validity product Easy Music Hello Tunes (Ring Back Tones) Song Catcher Call Home Service Music on Demand Airtel Live (Portal) Money Transfers Google search Portfolio Manager (Stock Tracker) iphone Blackberry focus on product innovations M Commerce 14

15 Performance Indicators - Financial Revenues (INR mn) EBITDA (INR mn) & Margin (%) 85,000 80,000 75,000 70,000 65,000 60,000 55,000 50,000 82,216 82,285 81,975 80,994 79,618 79,392 72,843 69,150 64,201 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 28,000 27,000 26,000 25,000 24,000 23,000 22,000 21,000 20, ,183 25,860 25,860 24,963 24,178 23,969 22,009 21,218 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 15

16 Performance Indicators - Operational Customers & Market Share Prepaid/Postpaid % 24.2% 24.7% 24.6% 24.0% 24.0% 23.4% % % % 27.0% 26.0% 25.0% 24.0% 23.0% 22.0% 21.0% 105% 100% 95% 90% 101.1% % 99.6% 100.8% 97.9% 100.4% 97.5% 98.4% 95.4% 96.3% 94.7% 95.2% 95.3% 95.8% 93.5% 94.2% 92.3% 91.6% 92.9% 91.0% 40.0 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q % 85% Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Customers (Mn) CMS (%) Prepaid Subs Prepaid Net Adds ARPU & RPM MoU/Sub/Month & MON Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 RPM (Rs.) ARPU (INR) ,840 89, , , , , , , , , Q308 Q408 Q109 Q209 Q309 Q409 Q110 MoU/Sub (Min) Q210 Q310 Q410 Total minutes on Netw ork (Mn Min) 200, , ,000 80,000 40,

17 Current positioning and way forward Leadership Positioning Growth strategy and plans Revenue Revenue size ($ 9 Bn) Revenue Market Share New Revenue Streams Changing face of growth through M-Com, M-entertainment & 3G Non financial vitals Brand Distribution Churn lower than industry Spectrum Mix (900/1800 MHz) Cost Improving cost efficiencies Lowest cost GSM network Maximizing usage Increasing the usage through U&R drive Wallet share Net Adds Driven by rural strategy 17

18 Telemedia Services 18

19 A snapshot Largest private operator having presence in the voice, broadband, IPTV and data. Focus on SMB segment & Broadband at Homes Key Performance Indicators 1. Voice (wire-line) and Data (DSL) Presence in 89 top cities of India. 2. Target Segment : Retail and Small and Medium Enterprises. 3. Customer base: 3.15 million (end June2010) 4. Broadband (DSL with speeds>256 kbps) penetration at 43.2% of customer base. 5. Average ARPU for Quarter ended Mar 10 $ 20.8 per month. 6. Segment contributing to 8% of overall revenues of the company. 7. EBITDA margin of over 43.5%. Broadband revolution to follow wireless revolution in India SMB opportunity across ICT stream 19

20 Telemedia Services Business Units SMBs Homes Products Voice Data Mobile Services Applications SaaS Broadband Voice IPTV Goal One-Stop Shop for All Airtel Services and Solutions to SMBs Dominant Broadband & Fixed Voice share of the affluent in targeted 95 cities Strategies Data Products: Internet, MPLS etc. Integrated Solutions to drive share of wallet like hosted e mail, online desktop etc. Strategic Alliances Indirect Channel to Drive Penetration Deeper & Not Wider: 95 Cities Enhancing Broadband experience : Speed on Demand, Games on Demand & VAS Vertical & Not Horizontal: Hi-Rise Drive Triple Play Drive Higher spends for better customer experience 20

21 Product Portfolio 21

22 Performance Indicators 9,100 8,800 8,500 8,200 7,900 7,600 7,300 7,000 Revenues (INR mn) EBITDA (INR Mn) & Margin (%) 4, ,585 8,550 8,486 8,544 8,550 8,458 8,510 3, ,988 3, ,641 3, ,200.0 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 3, ,944 3,696 3,667 3,614 3,702 3,531 3,463 3,367 3,344 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Customers (overall & DSL) ARPU (INR) 3,000 2,500 2,000 2,928 2, ,828 2,726 2,619 2,509 2,394 2,283 1,297 1,187 1,241 1,072 1, ,000 1,500 1, ,200 1,150 1,100 1,050 1, ,137 1,138 1,147 1,098 1,071 1, ,500 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Fixed Line Customers ('000) DSL Cust. ('000) 22

23 Enterprise Services 23

24 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 international telecommunications carriers, as well as ILD and NLD carriage for Airtel s own customers Extensive national and international infrastructure Pan-India network with 126,357 Route kms of optical fiber, over 4,150 MPLS and SDH POPs Access network (terrestrial) in 89 cities, Wimax network in 143 cities, and over 1,500 local POIs International network with 225,000 Route Kms, connecting over 50 countries. Key Performance Indicators (Q4 10) NLD Minutes Carried: 15.9 Billion ; ILD Minutes Carried: 3.2 Billion Revenue: Rs.20,738 Million (21 % Segment Contribution Share) EBITDA: Rs. 9,846 Million (47.5% EBITA Margin) 24

25 Highlights # 1 Operator in India in terms of: NLD Revenue (Voice & Data) ILD Revenue (Voice & Data) Corporate Fixed Line Operator Corporate Internet Provider Corporate Mobility Provider VSAT Provider (installed base) 25

26 Domestic Network Fiber commissioned for over 126,357 Kms Transmission Network (14,000+ SDH nodes) High resilience via ring structure & automatic switching Tier-1 MPLS network (across 120 Cities) Internet backbone capacity > 60 Gbps Proactive 24 x 7 x 365 NOC 304 LDCAs & 1680 SDCAs covered 26

27 International Network 27 Infrastructure NGN with 4 Global Media Gateways 100% Ownership of i2i Cable system and landing station Ownership of Sea Me We 4 cable and landing station IRU capacity on TAT-14, Apollo, EAC, APCN2, JUCN, etc. Trans- Pacific Connectivity Boost through Unity & AAG Terrestrial connectivity to Nepal, Pakistan and Bhutan Consortium partner in major cable systems under construction: IMEWE, EIG, AAG, Unity, EASSy Coverage TDM and IP Voice traffic termination in 230+ countries 5 Major International PoPs for carrier interconnect at Los Angeles, New York, London, Hong Kong & Singapore 8 additional PoP s under development in cl. Colombo, Tokyo, Paris, Bangkok and Kaula Lumpur Far-East and Middle-East Connect Platform to cater to high growth markets across Asia and the Pacific Extensive MPLS Coverage across the globe - more than 70 countries, 700+ PoPs via carrier-grade NNI s 27

28 What We Offer Wholesale Voice - Domestic & International Voice Carriage Services - International & Domestic Toll Free services - International Calling Services - Signaling Based Services - Global Wholesale Voice (Hubbing & Transit) Wholesale Data - Transport Services - Access Services Terrestrial/WiMax in India - Managed Network Services - Internet Access Services - Hosting & Services for Carrier PoPs - Carrier Outsourcing & Content Distribution Retail Voice - Mobility Solutions - Corporate Mobile Ser Voice Services - Mobile Data (Blackberry, Data card, applications) - SMS-Based Tools & Bulk SMS Solutions - Workforce Mobility Solutions (Vehicle Tracking, etc.) - Fixed line Solutions - Fixed Line/ PRI/ Centrex Services - Domestic Toll Free Service - Hosted Contact Centre Services - Premium International Toll Free Service Retail Data - Internet Services &Managed MPLS Services - Domestic and Int l Private Leased Lines - Data Center & Managed Services - Digital Media & Teleport Services - Audio and Video Conferencing Solutions 28

29 Performance Indicators Enterprise Services Revenues (INR mn) EBITDA (INR mn) & Margin (%) ,000 21,000 20,000 19,572 21,874 21,808 21,628 20,982 21,331 20,546 20,738 11, , , ,655 9,369 9,799 9,920 10,246 11,023 10,035 9,846 19,000 18,000 17,000 16,000 16,340 8, , , ,000 5, ,000 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 4,000.0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Voice Minutes on Network 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, , ,322 11,349 11,609 11,690 11,781 12,417 9,398 3, ,603 2,772 2,869 3,181 1,850 2,048 2,284 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 NLD Minutes (mn) ILD Minutes (mn) 29

30 Passive Infrastructure Services 30

31 A snapshot Bharti Infratel operates in 11 circles. Indus Tower operates in 16 circles. Standard Master Services Agreement with competitive rates already in place. Key focus areas: To increase sharing factor (tenancy) from current levels of 1.62 for Infratel and 1.71 for Indus. Provide energy optimization solutions and other network management services. Evaluate other revenue streams. To reduce sharing revenue per sharing operator through increased sharing factor and efficiencies Key performance Indicators (Infratel): Total Towers: 30,568 (nos) Sharing Factor: 1.62 Sharing Revenue per sharing operator per month at Rs. 36,878. EBITDA margin: 47.2% Key performance Indicators (Indus): Total Towers: 102,938 (nos) Sharing Factor: 1.71 Aim to be the preferred choice of vendor for all existing and new operators 31

32 Performance Indicators - Bharti Infratel Revenues (INR mn) EBITDA (INR mn) & Margin (%) 13,000 11,000 9,000 10,563 11,983 12,702 7,241 8,020 8,586 9,267 9,552 5,000 4,500 4,000 3,500 3,000 2, ,507 4,258 4,269 3,991 4,020 3,870 3,557 2,903 7,000 2,000 5,000 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 1,500 1,000 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Towers (nos) & Sharing Factor Sharing Revenue per Sharing Operator per Month (Rs) 70,000 60,000 50,000 40,000 30,000 20,000 10,000-58,013 59,966 61, ,548 28,078 29,112 30, , Q109 Q209 Q309 Q409 Q1 10 Q2 10 Q3 10 Q ,000 41,000 37,000 33,000 29,000 25,000 32,177 31,893 31,488 33,586 38,107 36,420 36,696 36,878 Q109 Q209 Q309 Q409 Q1 10 Q2 10 Q3 10 Q410 No of tow ers Sharing Factor Sharing Revenue per Sharing Operator per month Note: Figures for revenue, EBITDA and number of towers for quarters ending 4Q09 and beyond have taken the impact of 35,066 towers transferred to Indus 32

33 Indus Towers Roof Top Tower 103, ,000 99,000 97,000 95,000 97, , , , ,000 Q110 Q210 Q310 Q No of to wers Sharing Factor Ground Based Tower First of its kind deal Bharti (42%), Voda (42%) & Idea (16%) Largest independent tower company in the world ~ 100,000 towers under its management Benefits from captive tenancy as well as external tenants Incremental investment in towers to come from new operators / subscriber growth / 3G 33

34 Recent Honours 34

35 Bharti Airtel Leadership in business Recent Honours Rated as the Powerful Brand in the Economic Times- Brand Finance Brand Power (the only corporate brand to be awarded the AAA rating) Best Cellular Service Provider and Best VSAT & NLD player Service Provider at the 2009 Voice & Data 100 Awards Best Global Wholesale Carrier for 2009 at the Telecoms World Awards Middle East. Adjudged Wireless Service Provider of the Year Frost & Sullivan Asia Pacific ICT Awards ( in recognition of innovation, vision, strategy and profitability) Voted as the India s Most Innovative company in a survey conducted by Wall Street Journal Rated as India's Best Enterprise Services Provider for 2009 at the annual Users Choice Awards instituted by PC Quest. Adjudged Most Preferred Cellular Service Provider Brand award at the 2010 CNBC Awaaz Consumer Awards Bharti Airtel won tele.net Telecom Operator awards in 6 out of total 14 categories including Most Admired Company, Best National Mobile operator, Best Internet and Broadband operator, Best Operator in Rural Market, Best Enterprise Services Sunil Bharti Mittal, Chairman & Group CEO Honorary degree of Doctor of Laws by University of Leeds (UK) in 2009 Tenth Lal Bahadur Shastri National Award by the Hon ble President of India in 2009 Akhil Gupta, Deputy Group CEO & MD CA Business Achiever Award by Institute of Chartered Accountants of India. Manoj Kohli, CEO( International) & Joint MD Telecom Man of the year by Tele.net in Apr 10 35

36 Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end. This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes or developments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision. The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information about the Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. Investor Relations :- For any queries, write to: ir@bharti.in