Investor Presentation

Transcription

1 Investor Presentation Bharti Airtel Limited March 2009

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: 1.1 billion increasing urbanisation relatively large youth population GDP Growth (Real) : ~7.3% second highest growing economy GDP Size (PPP adjusted): US$ 3 trillion fourth largest economy in the world Telecom penetration: 35.65% ( mn telecom subs) one of the lowest Govt. target to reach 500 mn. telecom subs by 2010 Broadband penetration: 0.50% (5.85 mn) 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 is as at February 28th2009, as per TRAI press release. 3

4 The Company...Bharti Airtel Bharti Airtel an integrated telco Wireless Services 2G/3G Rural Market Enterprise Services Carriers Corporate Telemedia Services Fixed Line Broadband DTH (Media)/IPTV Passive Infrastructure Services Fully integrated telecom player end to end telecom offerings 4

5 Bharti Airtel - placing in the world and India 3 rd LARGEST wireless operator in the world 1 LARGEST private INTEGRATED telecom company in India LARGEST WIRELESS operator in India LARGEST private FIXED LINE operator in India 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 Q3 FY08/09 Key operating and financial metrics Continued Strong Performance Customers Q3 FY mn Y-on-Y 54.0% Wireless Customer market share leadership at 24.7%. Total minutes on network carried in Q3 143 billion Revenue $ 1,983 mn 38.3% Total employee strength 25,553 EBITDA Cash Profit Net Income $ 812 mn $ 773 mn $ 444 mn 33.12% 38.07% 25.37% Balance sheet strength: Assets - $ 12 billion Net debt - $ 677 million* Net debt to EBITDA times* EBITDA Margin 41.0% Net Profit Margin 22.4% ROCE 32.5% ROE 34.1% Note: * Net Debt is excluding fully and compulsory convertible, non-cumulative, unsecured and interest free Debentures of US$

7 performance dashboard - 3 line graph 110, , % 74.4% 73.6% 73.1% 72.3% 80.0% 70.0% Amount in Rs. Mn 90,000 80,000 70,000 60,000 96,334 90,203 84,833 78,191 69, % 32.7% 33.8% 34.6% 34.7% 60.0% 50.0% 40.0% 50,000 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY % Gross Revenue (Rs mn.) (LHS) Opex to Gross Rev (RHS) Capital Productivity Productivity Indicators = growing revenues + cost efficiencies + capital productivity 7

8 Segment investment & contribution Revenue EBITDA 19% 5% 13% 1% 5% 11% -3% 9% 81% 20% 10% 59% Mobile Services Enterprise Services - Carriers Passive Infrastructure Services Telemedia Services Enterprise Services - Corporates Others Mobile Services Enterprise Services - Carriers Passive Infrastructure Services INVESTMENTS Telemedia Services Enterprise Services - Corporates Others 24% 1% 50% 1% 13% 11% h Note: (1) Revenue and EBITDA is gross of inter segment eliminations. Mobile Services Enterprise Services - Carriers Passive Infrastructure Services Telemedia Services Enterprise Services - Corporates Others 8

9 few recent recognitions Bharti Airtel top honors at the 7th edition of the Frost & Sullivan ICT awards 2008 in the categories of Large Enterprise Telecom Services, Wholesale Data Services and Mobile Service. Bharti Airtel and IFFCO joint venture recently bagged the Best Content Service award and the Gujarat E-GRAM project executed by Bharti Airtel has won Best Project Management award at the World Communications Awards held at London Bharti Airtel was voted as India s most innovative company in a survey conducted by The Wall Street Journal. Airtel won the Platinum Trusted Brand Award in the Mobile Service Provider Category in the Reader s Digest Asia Trusted Brand s Survey. Airtel was chosen as the 2nd most trusted service brand in India in the Most Trusted Brands 2008 Survey conducted by the Economic Times - Brand Equity Awarded with top honors at the GSMA Mobile World Congress Conference 2008 in Barcelona for the category Best Billing/ Customer Care solution. Adjudged as the Best Carrier India at the Telecom Asia Award 2008 Sunil Bharti Mittal, Chairman & Group CEO GSM Association Chairman s Award 2008 Chosen for Padma Bhushan Awards in 2007 Sarvjit Dhillon, Group Director Best Performing CFO in Telecommunications Sector by CNBC-TV18 in March 2009

10 Wireless Services 10

11 KPIs Indian Wireless Market 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: 32.4% lowest in the world HHI Index: very high one of the most competitive market Prepaid Base: 90%+ one of the highest in the world Usage per sub per month: Minutes: 449 MUM MAH KK AP OR Kol Metros A Cat. one of the highest ARPU: ~ US$ 6.83 one of the lowest Rate per minute: 1.4 cents one of the lowest in the world KER TN CHN B Cat. C Cat. VAS: ~ 9% One of the lowest Note: (1) Subscriber numbers and wireless penetration numbers as at February 28, 2009 as per TRAI. (2) Other indicators on the slide are based on QE Dec, 2008 Global Wireless Matrix released by Merrill Lynch, and reflective of Industry numbers. 11

12 Rapidly Growing Wireless Market Net Adds in Feb 13 MN, higher than 10 MN net adds per month over past few months S-curve triggered Closing Customers (mn) Net Adds (mn) Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec % 80% 70% 60% 50% 40% 30% 20% 10% 0% Note: (1) Actual Data as per Industry Association Releases and Industry Estimates. fastest growing market in the world 12

13 Wireless Market Structure Subscriber Trends Customer Market Share CMS (%) (mn) Feb-09 Feb-08 Net adds during last 12months % 23.0% 21.0% 19.0% 17.0% 15.0% 13.0% 11.0% 9.0% 7.0% 5.0% 24.2% 23.9% CMS(Feb'09) CMS(Feb'08) 18.5% 17.6% 17.5% 16.8% 17.0% 14.3% 10.0% 9.1% 9.0% 9.3% 6.5%6.4% Airtel Reliance BSNL+MTNL Vodafone Idea Tata Others Airtel Reliance BSNL+MTNL Vodafone Idea Tata Others Airtel continuously consolidating its market leadership position despite intense competition. Airtel current monthly net adds at 2.73 million vs 2.45 million a year ago. Airtel ranks 1& 2 in 18 circles. 58% of net adds coming from B&C circles (rural India). Airtel has the highest share in Feb net adds at 19.8%...increased from 17.7% in Jan09 Continues to lead on revenue market share 13

14 Road map Current March 2009 Presence Operational in 23 circles of India on GSM technology. Launched Operations in Srilanka Looking for options in primarily in emerging markets Population Coverage 79% of population covering 5,057 census towns and over 4 lakhs noncensus towns and villages. Poised to cover all census towns and majority of non-census towns and villages Penetration wider and deeper into rural India Network Rollout & Strength Hive off of passive infrastructure into a separate independent tower company Largest GSM (900/1800 Mhz) network in India comprising of over 88,319 network sites Strong partners: Ericsson; Nokia Network sites ~ 100,000 + Plan to get 3G license and spectrum. 14

15 Road map Current March 2009 Sales & Distribution Network One of the widest distribution network. Following the FMCG company distribution model - Match Box Approach Present in over a million PoP in India. Tie-up with IFFCO, an edge over others to reach out to Rural India Continue distribution expansion, especially in rural areas Customer Service Continuous improvement in CSAT scores Multi pronged service strategy in place Focus on service through service training and employee sensitivity Unified service backend for enhanced customer experience Employee Engagement Significant improvement in employee engagement Awarded Great Work Place 2008 by Gallup Sustain employee engagement Focus on employee capability development and leadership pipeline 15

16 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 16

17 Performance Indicators Customers & Market Share Prepaid/Postpaid % % 24.2% % 23.7% Q308 Q408 Q109 Q209 Q309 Customers (Mn) CMS (%) 25.0% 24.5% 24.0% 23.5% 23.0% 105.0% 100.0% 95.0% 90.0% 85.0% 99.6% 95.4% 90.4% 91.0% 91.6% 92.3% 92.9% 93.5% Q208 Q308 Q408 Q109 Q209 Q309 Prepaid Subs Prepaid Net Adds ARPU & RPM MoU/Sub/Month & MON , , , , Q308 Q408 Q109 Q209 Q309 RPM (cents) ARPU (USD) Q308 Q408 Q109 Q209 Q309 80,000 40,000 0 MoU/Sub (Min) Total minutes on Network (Mn Min) 17

18 Performance Indicators Revenues (USD mn) EBITDA (USD mn) & Margin (%) ,700 1,600 1,500 1,400 1,300 1,200 1,100 1, ,634 1,499 1,423 1,322 1,155 Q308 Q408 Q109 Q209 Q Q308 Q408 Q109 Q209 Q309 18

19 Telemedia Services 19

20 A snapshot Largest private operator having presence in the voice and data (broadband). Foraying into the media space - IPTV & DTH (Direct-To-Home) services. Key Performance Indicators 1. Voice (wire-line) and Data (DSL) Presence in 95 top cities of India. 2. Target Segment : Retail and Small and Medium Enterprises. 3. Customer base: 2.7 million (end February,2009) 4. Broadband (DSL with speeds>256 kbps) penetration at 37% of customer base. 5. Average ARPU for Quarter ended December 2008 $ 22.6 per month. 6. Segment contributing to 9% of overall revenues of the company. 7. EBITDA margin of over 41.7%. Broadband revolution to follow wireless revolution in India 20

21 Telemedia Services Business Units Media SMBs Homes Products DTH IPTV Voice Data Mobile Services Broadband Voice Goal A Pan-India DTH Businesses; and a targeted IPTV Presence in top metros One-Stop Shop for All Airtel Services and Solutions to SMBs Dominant Broadband & Fixed Voice share of the affluent in targeted 95 cities Strategies Best-in-class technology: World-class Installation & Customer Service Interactive VAS to Drive ARPU enhancement One Airtel Synergies for Distribution, Brand & IT Data Products: Internet, MPLS etc Integrated Solutions to Drive Share of wallet Strategic Alliances Indirect Channel to Drive Penetration Deeper & Not Wider: 95 Cities Vertical & Not Horizontal: Hi-Rise Network Enhancement to Deliver 8+ MBPS New Products & VAS to drive Flat, Combo Plans 21

22 Product Portfolio Our Media Play 22

23 Performance Indicators Customers (overall & DSL) ARPU (USD) 2,750 2,500 2,250 2,000 1,750 1,500 1, , ,509 2,394 2,283 2,178 Q308 Q408 Q109 Q209 Q309 B&T Customers ('000) DSL Customers ('000) 1,200 1, Q308 Q408 Q109 Q209 Q309 Revenues (USD mn) EBITDA (USD mn) & Margin (%) Q308 Q408 Q109 Q209 Q Q308 Q408 Q109 Q209 Q309 23

24 Enterprise Services 24

25 A snapshot Carrier: - one of the largest carriers of voice and data, both domestic and international. Corporate: - providing end to end telecom solutions to large corporate and Small & Medium Businesses. Present Competition: National Long Distance: BSNL; Reliance; VSNL; Vodafone; Tata International Long Distance: VSNL, Bharti, Reliance, BSNL 25

26 Enterprise Services Carriers NLD Voice Network Jalandhar Chandigarh Jaipur Delhi Lucknow Ahmedabad Mumbai Bhopal Nagpur Hyderabad Kolkata Bangalore Ernakulam Chennai Coimbat ore Legend Existing OFC Route Under Execution Capative Traffic (Group Traffic) NLD minutes carrierd (Q3 FY 09) Optic fiber Capacity (Q3 FY 09) ~ 90% >11.6 Bn Min 90,205 26

27 Enterprise Services Carriers ILD Legend i-2-i SEA-ME-WE-4 Other Int l Connectivity Int l Gateways Connectivity SEA-ME-WE-4 i-2i ILD minutes carried (Q3 FY 09) ILD Gateways Landing Stations Connectivity to West Conectivity to East 2.6 Bn Min

28 Performance Indicators - carriers Voice Minutes on Network Revenues (USD mn) 12,000 10,000 8,000 7,898 9,398 10,322 11,349 11, , ,000 2, ,591 1,850 2,048 2,284 2, Q308 Q408 Q109 Q209 Q NLD Minutes (mn) ILD Minutes (mn) Q308 Q408 Q109 Q209 Q309 EBITDA (USD mn) & Margin (%) Q308 Q408 Q109 Q209 Q309 28

29 Enterprise Services - Corporates Mobile services Voice services Satellite services Managed data & Internet services Managed e - business services Managed customized integrated solutions competition segment target leveraging limited one stop telecom solution 2,000 top large corporates integrated play 29

30 Performance Indicators - corporates Revenues (USD mn) EBITDA (USD mn) & Margin (%) Q308 Q408 Q109 Q209 Q Q308 Q408 Q109 Q209 Q309 30

31 Passive Infrastructure Services 31

32 Market landscape No of Towers (Estimates) Description Indus Towers Bharti Infratel Reliance Infratel BSNL+MTNL Tata + Quippo Aircell Essar GTL 91,715 JV between Airtel;Idea & Vodafone operational in 16 circles 26,289 Subsidiary of Airtel operating in 11 circles 40,000 Subsidiary of Reliance operating in all 23 circles 40,000 State Owned Telephone Company 18,000 Present in 23 Circles 7,000 Operator owned towers, present in 13 circles 4,500 Part of Essar Group, present in 13 circles 6,300 Present in 15 circles TOTAL 233,804 No of Subs (in million) 347 Subs/Tower Approx 1,484 Industry estimated to have 350,000 towers by 2010 Source: Company data and Industry Estimates 32

33 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 Provide energy optimization solutions and other network management services. Evaluate other revenue streams. Key performance Indicators: Sharing Factor: 1.34 Sharing Revenue per sharing operator per month at Rs. 31,488. EBITDA margin: 33.5% Aim to be the preferred choice of vendor for all existing and new operators 33

34 To conclude 34

35 Key Strategic Objectives Sustain revenue share in mobile profitably Achieve deeper penetration in home and SMB Product & vertical focus to gain client Revenue Market Share (crms) in Enterprise business Become a benchmark in customer experience through service quality & innovation Build a robust leadership pipeline to support growth Benchmark in cost efficiency & productivity 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