Airtel India - Investor Day. 16 th November

Transcription

1 Airtel India - Investor Day 16 th November

2 Agenda Introduction to Airtel Our Strengths The Industry and Opportunity Our Strategy

3 Who we are : Bharti Airtel #2 Telecom operator in India #2 Telecom operator in Africa #3 Telecom operator globally* 16 Countries presence globally * In terms of customer base

4 Our Size : Global $12.1 B Global Revenues (LTM) $4.2 B Global EBITDA (LTM) 4.2 Net Debt : EBITDA (LTM) 448 M+ Customers 125 M+ Wireless Data Customers 1.8 B+ Addressable population LTM = Last Twelve Months as on Sep 18 Customer Data as on Sep 18 exit

5 Our Portfolio : India Mobile Services Airtel Business Homes 330 Mn+ Customers #1 Enterprise Telco in India 2 Mn+ customers Digital TV Tower Infrastructure Payments Bank 15 Mn customers Among Top Passive Infra Providers 30 Mn Banking Customers

6 Our Portfolio : India Mobile Business Homes Broadband Customers (M) 304 Customers (M) 2.2 Revenue (Rs Mn) 462,640 Revenue (Rs Mn) 25,265 EBITDA % 32.6% EBITDA % 46.7% Airtel Business Digital TV Large Corporates 2,000 Customers (M) 14.2 Revenue (Rs Mn) 113,566 Revenue (Rs Mn) 37,570 EBITDA % 37.4% EBITDA % 37.9% Above figures are for FY18

7 Our Digital Services Wynk Music Airtel TV myairtel 100 Mn+ Customers 80 Mn+ Customers 80 Mn+ Customers One Home Homes Platform Device Platform Payments Platform One Billing Layer on all Services Solid Platforms Device, Lenders, Delivery 1.2 Mn Retailers on one App

8 Agenda Introduction to Airtel Our Strengths The Industry and Opportunity Our Strategy

9 1a. Obsession with Network Experience : Spectrum Airtel s Spectrum Share of Liberalized Spectrum Aircel Band Footprint Holding per Circle BSNL 3.1% Low Band 15 Circles 5 10 Mhz RCom 7.0% 9.3% 28.4% Airtel 2 Mid Band Pan India Mhz 1 Jio 20.5% 31.7% High Band Pan India Mhz Voda + Idea Massive spectrum holdings across all bands 1. Except for Kolkata (9 Mhz) and West Bengal (6.2 Mhz) 2. Includes liberalized spectrum of Tata

10 1b. Obsession with Network Experience Largest Ever Deployment Extensive Fiber Roll-out State of the Art Tools Geo-Spatial Analysis 100 mbps 200 mbps 1 gbps Self-Optimizing Network ~200K Base Stations In last 2 years Bulk of our Sites are 200+ Mbps Digitization Continuously rated as India s fastest network

11 2. Obsession with Customer Experience Decision Tree Platform Next Gen Digital Stores Open Network Call-center Calls per customer x 75% reduction 0.25x FY'15 FY'18

12 3. Scientific Sales & Marketing Deep Customer Understanding Omni Channel Delivery Powerful Tools 1.2 M Retailers GOAL Customer 360 2,850 Airtel Stores Mitra Data Science Own Digital Apps Geo Spatial Analytics

13 4. A War on Waste Opex Growth YoY 8.0% 6.9% 6.0% 5.0% 4.0% 3.1% Smart Procurement Frugal Cost Culture Continuous Process Redesign Digitization and Automation 2.0% 0.0% -2.0% -4.0% FY'15 FY'16 FY'17 FY'18-3.1%

14 5. Capacity to play multiple games Dedicated Teams for the Core Preparing for the Future Design & Execution Machines Movies, Music, myairtel One Home Circles Open Platforms New Products Center Excellence in Partnerships

15 Business Environment Remains Challenging Massive Need for Capex ARPU Erosion by 45% Disruption Battle for 4G Primary Slot 10x Data Traffic Growth

16 Financial Performance : India Reported Revenue (Rs. Cr) EBITDA % 84,000 74,000 64,000 64,529 70,844 73,422 64, % Series % 41.4% 37.2% 54,000 44,000 34, % 24,000 14,000 4,000 FY'15 FY'16 FY'17 FY'18 FY'15 FY'16 FY'17 FY'18 Q2'19 YoY Growth % 12.1% 9.8% 3.6% -12.7%

17 Operational Performance : Mobile India Mobile Customers (Mn) ARPU (Rs.) Q2'17 Q2'18 Q2' Q2'17 Q2'18 Q2'19 Data Consumed (PB / Day) Voice Minutes per Day (Bn) Q2'17 Q2'18 Q2' Q2'17 Q2'18 Q2'19

18 RMS Performance 34.4% Airtel 31.3% 30.7% 32.1% 33.8% A+T+T Vodafone Idea Others 21.5% 18.7% 28.5% 22.9% 19.4% 23.3% 19.9% 16.3% 21.4% 19.3% 15.4% 22.4% 34.7% V+I 22.4% Jio Jio 11.6% 10.80% 9.1% Others Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 RMS is calculated on the basis of adjusted gross revenue including NLD. Source: TRAI

19 Agenda Introduction to Airtel Our Strengths The Industry and Opportunity Our Strategy

20 The Industry and Opportunity Mobile Homes B2B

21 Explosive 4G Growth 120 # 4G Phones (Mn) Avg. Time Spent (Mins/Day) Series Series Sep'16 Sep'17 Sep'18 Data usage per month (GBs) Series 1 9 More than a Phone Sep'16 Sep'17 Sep'18 Voice Mins per month Sep'16 Sep'17 Sep' Sep'16 Sep'17 Sep'18 *Bases Based on on internal internal estimates estimates and Statista.com and Statista.com data Data

22 Opportunity Customer Revenue Contribution Postpaid Prepaid Smartphones Prepaid Mass Market

23 Opportunity Customers Geography Different Customers, Different Needs High Potential Districts

24 The Industry and Opportunity Mobile Homes B2B

25 Homes Affluence Rising Households with Income > Rs 10 L p.a.* Home Broadband The Home Opportunity Pay TV 36 Mn 18 Mn 140 Mn 30 Mn 2 Mn 15 Mn * Source: BCG - The New Indian

26 The Industry and Opportunity Mobile Homes B2B

27 B2B Significant Potential Use Occasions Exploding Market Size Connectivity Non-Connectivity Top ,000 Cr Data Centers Connectivity SME (1.4 Mn) Huge Opportunity SOHO (8.5 Mn) 10,000 Cr Video Conferencing Audio conferencing Source: Frost & Sullivan Research Reports and Internal Estimates

28 Agenda Introduction to Airtel Our Strengths The Industry and Opportunity Our Strategy

29 Airtel Strategy Win 4G decisively

30 Win 4G Decisively Our Strategy Postpaid Gain Decisive Leadership through an Exceptional Experience Prepaid Smartphones Win in Urban India and Top Villages Prepaid Mass Market Upgrade to 4G.

31 Win 4G Decisively Services Devices Network Experience

32 Airtel Strategy Win 4G decisively Win with Brilliant Experience

33 Win with Brilliant Experience Superior Network Experience Create Capacity Focus on Quality Disrupt and Innovate Massive Spectrum Holdings L900 Re-farming Fiber Densification Track Quality at Customer Level New Age NOC Drive VoLTE Reduce Cost per GB Work with Disruptive Vendors VRan, epc etc Transparency and Personalization : Open Network 2.0

34 Win with Brilliant Experience Automation and Digitization Digital Experience at Stores Personalized Network Experience

35 Airtel Strategy Win 4G decisively Win with Brilliant Experience Build New Revenues

36 Build New Revenues Accelerate Homes Broadband DTH Integrated Homes Focused Expansion Rapid Expansion Converged Solutions

37 Build New Revenues Accelerate B2B Expansion Alliances Build New Verticals Grow SME & Go Deep More Products, Stronger Relationships

38 Build New Revenues Grow Digital Services Content Services FinTech Services

39 Build New Revenues Partnership Principles T E A M Transparent Commercials Ease of Integration on our Platform Accelerated Adoption of Partner Propositions Mutual Growth

40 Build New Revenues The Open Telco Platform Alliances (Examples) Services Mobile Device Platform Hardware Customer 360 Fixed Internet TV 3P SW & HW Services Platform Home Products Office Software Payments Bank Payments Platform Utilities Goods & Services

41 Airtel Strategy Win 4G decisively Win with Brilliant Experience Build New Revenues Win with a War on Waste

42 Win with a War on Waste Drive Opex Savings Improve Capex Productivity Process Re-engineering Digitization and Automation Business Simplification Infrastructure Sharing Smart Procurement Adopting Disruptive Technologies

43 Airtel Strategy Win 4G decisively Win with Brilliant Experience Build New Revenues Win with a War on Waste Win with People

44 Win with People Cross Functional Team Work Passion and Motivation Simplify Organization Build Airtel of the Future

45 Airtel Strategy Win 4G decisively Win with Brilliant Experience Build New Revenues Win with a War on Waste Win with People Win with a Digital Airtel

46 Summary Simultaneously Consolidating in the Short Term And Building for the Longer Term

47 Winning with Customers & New Age Go To Market

48 Customer Scale 800 Mn Mobile Users in the Country 1.2 Billion Indians 800 Mn Mobile Users Win with Customers

49 Winning with Customers Few Customers = Significant Revenue Few Customers Significant Industry Revenue Exceptional Service to Customers Exciting Content and Privileged Experience

50 We have a deep understanding of who our customers are Using Data Science and Customer Insights Identifying our Customers! Services What do they want to buy, spend on? - Content - Financial Access Attitudes & Behavior Who are they? What are their needs, aspirations? Demographics Age Gender Profession Location Psychographics Personality Values Activity Interests Devices What devices do they aspire for? What do they enjoy using? Geography Where are they from?

51 Clarity about how this will be delivered Services Devices Network Experience Priority Resolution Exciting Services, Device & Privileged Experience Seamlessly delivered through our Omni-Channel Touch points!

52 Open Partner Ecosystem to get the very best for Customers Transparency Ease of Integration Adoption made easy Mutual Growth and margins

53 Multiple touch points Consistent engagement with customers 1.2 Mn Retailers 2,850 Stores Exclusive Promoters Digital Touchpoints Pitch Book Right Conversation Tool Kit Digital Tools

54 In Summary Well geared to Win With Customers! Services Devices 360 o Go To Market Experience Strong Network Rollout Brilliant Partnerships

55 Delivering World Class Digital services

56 We have built the two largest media products in the country 100 Million Customers #1 Music Streaming app in India Highest Engagement metrics in the Industry 80 Million Customers 375 Linear channels & over 10K Movies & shows 2000 years (1.3bn min) watch-time per month Benchmarking Source : App Annie Data, Sep 18

57 Built with love by a young and passionate startup team within Airtel

58 Our Vision

59 Our Content Play Media products drive 3 business objectives for us Drive Airtel Telco Objectives Build New Revenues Consumer Stickiness ARPU uplift Advertising

60 Churn We are already seeing a significant impact on customer stickiness X Material Impact on Customer Lifetime Value 0.7X 0.4X Pure Telco Single Digital Service (Music) With Video Scenario

61 We are using content laddering to drive ARPU Uplift on Airtel TV Marquee Partnerships Postpaid Premium Content & Exclusives High Value Prepaid Live TV & Mass Content Basic Prepaid Limited Content Access

62 New Revenue Streams Advertising revenue as a targeted publisher Inventory Multi Bn video, audio, display Intelligence Driven by Customer 360 Innovation Future proof & low intrusion channels Audio Ads Video Mastheads Video Ads

63 How are we doing it?

64 Building integrated & flexible micro services New Apps Customer 360 Single Sign-on Advertising & Smart Targeting Personalized experiences Reco & Reward capability

65 Tight Cross Pollination across Digital Assets Digital distribution strategy with a Plug & Play SDK of Audio & Video Integrates with the partner app in less than 7 days Already powers My Airtel app

66 Creating Next Generation Network

67 Building Next Generation Network Sufficient capacity Deeper coverage Optimizing experience Automation of network operations Reducing cost of delivery

68 Promise to Our Customers Best Broadband Experience Good Quality Voice Connection Great Content Experience Honest Timely Response

69 Creating Capacity & Extending Coverage

70 Well Positioned with Spectrum Holdings Airtel s Spectrum Share of Liberalized Spectrum Aircel Band Footprint Holding per Circle BSNL 3.1% Low Band 15 Circles 5 10 Mhz RCom 7.0% 9.3% 28.4% Airtel 2 Mid Band Pan India Mhz 1 Jio 20.5% 31.7% High Band Pan India Mhz Voda + Idea Massive spectrum holdings across all bands, with maximum spectrum deployed for 4G 1. Except for Kolkata (9 Mhz) and West Bengal (11.2 Mhz) 2. Includes liberalized spectrum of Tata

71 Sufficient network capacity Largest Ever Deployment Carried traffic (PBs/ Day) 27 ~200K Base Stations In last 2 years 8 2 Sep'16 Sep'17 Sep'18 Mar'19 Carried Traffic Network Capacity Sufficient headroom in network capacity to ensure good user experience

72 Augmenting Capacity on Existing Sites Maximizing spectrum for 4G LAA 5GHz Two layers Five layers Adding capacity with minimum increment Capex & Opex

73 Address Hyper Capacity Sites Sectorization Massive MIMO 2x capacity and additional indoor coverage 3x~5x Capacity Gain Adding capacity with minimum increment Capex & Opex

74 Extending Coverage - 4G in Sub-GHz band (900MHz) Increase in VoLTE & data consumption Enhanced time spend on 4G Reduction in customer complaints L2300 L1800 L900 Additional spectrum for 4G, improving data experience Existing handsets supports 4G in 900 band Reframing liberalized 900 band spectrum to 4G across ten circles by Mar 19

75 Small Cells for Coverage & Capacity Outdoor Hot Spots High traffic locations Public locations Inside shopping malls Tourist locations Corporate offices Small cells with innovative Opex models collaboration with ecosystem

76 LTE-Advanced for Improving User Experience & Capacity India s first 4.5G network Improvements 3x increase in peak throughputs 3x Increase in network capacity with existing handsets Aggregating 4G carriers Further opportunity to increase with 4x4 MIMO handsets Software only upgrades on existing sites to augment capacity & improve user experience

77 Getting Backhaul Ready for 4G & Massive MIMO Challenge Approach Getting sites ready for Massive MIMO & 4G capacity 1. Backhaul readiness for 4G expansions 2. 1Gbps for massive MIMO sites 100 mbps 200 mbps 1 gbps Upgrade 200Mbps sites to 400Mbps using additional spots Single hop network ready to support capacity across all 4G bands

78 Building Transport Expressways Extreme-scale architecture 16QAM Readiness to handle data disruptively lower cost/bit QPSK 8QAM 32QAM 64QAM 10x scalability Superior network uptime 100G to 400G 5G Ready backbone Full optical cross-connect Worlds Largest Self healing IP over photonics implementation

79 Improving Operational Efficiency Single RAN Outdoor Sites Outdoor microwave Using new generation architecture for improving coverage, experience & tightening OPEX

80 Improving Voice & Data Experience

81 Customer Experience End to End perspective Network Applications Customers Environment Devices Operating System

82 Taking Content Closer to Customer Reducing Latency Challenge Approach Legend Cross-connect Optical by-pass Router Access node Over 350 mini data centers for distributed content connected with IP over Photonics

83 Automation of Service Provisioning & Management Software defined network, agile and converged IP network

84 Building Predictive Experience Management We are here Point of arrival FCAPS Reactive Proactive Predictive Self Healing network e2e Root cause map Leveraging Machine Learning & Artificial Intelligence to optimize user experience before it hits the customer

85 Summary Passionate across organization for delivering delightful experience Augmenting capacity with minimum cost Extending coverage using liberalized low band spectrum Moving to proactive & predictive experience

86 Homes of the Future

87 Opportunity 1: Expansion 286 Mn Households in India 183 Mn TV Households in India 152 Mn Pay TV Households in India 65 Mn DTH Households in India 18 Mn Broadband Households in India 15 Mn Airtel DTH Connections 2.2 Mn Airtel V-Fiber Connections *Source: FICCI EY 2018, TRAI

88 Opportunity 2: Converged Solutions Changing media consumption and lifestyle habits: 30 Mn HH with 10L+ income p.a.* - Linear & Non-linear content - Media consumption on the go - Virtual Connect - Security & surveillance *Source: BCG The New Indian

89 Growth Opportunities DTH: Rapid Expansion V-Fiber: Focused Expansion Airtel Home: Converged Solutions

90 Airtel Home: Leverage Go-to-market of V-Fiber & DTH Channel Partners 2850 Airtel Stores National Retail Presence Modern Trade / B2B Relationship Strong Sales & Service Organization & IT Enabled Processes Robust Partner Ecosystem

91 Airtel Home: Consumer Proposition Single Proposition for Linear & Non-Linear Content Single Bill, Single Payment Single Sign-on Content Discovery & Recommendation

92 Airtel Home: Consumer Services Catch-up TV Voice Assistant Integration Video-calling Internet of Things: Smart Homes Cloud DVR Security/ Surveillance Gaming

93 Airtel Home: Best-in-class service experience Homes Platform Premium Customer Care for Homes Customers Digital Journeys for Entire Customer Lifecycle

94 From Pipes to Enterprise Solutions

95 Airtel Business An Overview 2,50,000 RKMS Global Fiber Data Centers Satellite Domestic & International satellite partnerships Fiber 10 Large and 130 Edge DCs 4 Upcoming DCs India and Global PoPs PoPs Customers Across India and Globe Voice & Mobile Alliances across the world CLS 7 Cable Landing Stations Cables 30 International Cables

96 Airtel Business Product Portfolio Data & Connectivity Internet MPLS IPLC & Ethernet VSAT NLD Local Access Data Center & Cloud Colocation Services Managed Hosting Infrastructure Management Cloud Solutions Global Voice & Messaging Wholesale Voice International Toll Free (ITFS) Message Hub SMS Firewall Solution Airtel Talk IoT Connectivity Connectivity Management Platform Applications Cyber Security Security Products Managed Security Services Bundles Collaboration Audio Conferencing Unified Collaboration Video Conferencing Mobility Postpaid Data Card International Roaming

97 Airtel Business Unique Business Model Key Activities Key activities Product creation Digital platforms Customer Relationship Customer relationship Sales, Product specialist and customer experience team of member MONETISE ALL AIRTEL ASSETS Domestic Fiber Submarine Fiber Data centres Towers 426 Mn subscribers FTTH & One Home Customer Analytics Payment Bank Wynk 14 countries Africa operations Partner Cost structure Unique Culture Value Propositions Channel Revenue stream Customer segments

98 Market Snapshot 1,200+ customers Global Carriers and OTTs 2,000 customers Large & Major Accounts India Connectivity Market FY 18: 12,000 Cr Growth: 10% Non-Connectivity: Huge Opportunity 10.0 mn customers MSME / Small offices India MSME Market: 10,000 Cr Growth: 20% Source: Frost & Sullivan Research Reports and Internal Estimates

99 Airtel Business Strategy 1,200+ customers 2,000 customers Global Carriers and OTTs Large & Major Accounts India Go Global Bring Global customers & content to India Lead & Innovate Leadership in Core Connectivity & Digital offerings More Products Per Customer New strategic products and offerings for business growth 10.0 Mn customers MSME / Small offices India Expansion Tap MSME Segment with bundled offerings

100 Key Takeaways Unique Business model Make India as Digital Internet Hub Leadership in core connectivity Integrated Enterprise solutions provider Bundled simplified product for MSME

101 Payments Bank Banking the Next 500 Million

102 Our Mission and Vision Mission: Grow India by improving financially under-banked and digitally underserved lives Vision: Every Mile, Every Family, Every Business

103 We have built moderate scale Digital Services Remittances Cross-sell products Top #10 UPI Players Over 10% Market Share in Domestic Remittances #1 Payments Bank to launch PMJJBY & APY Assisted Payments and Withdrawals Cash Drop Services #1 In No of Banking Points in the country 20 Partnerships

104 The Bottom of Pyramid Airtel Retailer as a Hub for Services Enabling Industries and Institutions Small Businesses and Merchants Airtel Digital Ecosystem Strategy Mission: Grow India by improving financially under-banked and digitally underserved lives Vision: Every Mile, Every Family, Every Business Digital Frugal Culture Products

105 Digitization Core of New Airtel

106 What you have heard so far Deep Customer Understanding Brilliant Customer Experience Enable Partnerships Delivery & Adoption

107 Data Lakes Realtime Triggers The Digital Brain using power of AI and Machine Learning Postpaid Prepaid Broadband DTH CLM Customer (BSS) Digital Brain Omnichannel Next Best Action Digital Advertising Personalization Network (OSS)

108 Bringing transparency to NW Experience Open Network 2.0 takes network transparency even further Provides coverage quality in any area Real-time alerts on network degradations or outages with a resolution timeline Personalization using user level data and analysis Full troubleshooting for profile, device and NW issues

109 Next Gen Digital Stores Open design wrapped in digital technologies Touch table to create personalized solutions Explore network experience & enjoy digital content Social wall to explore airtel stories

110 Airtel Open Telco Platform Strategy Services Platforms (Homes + Offices + Thanks + 3rd Party Services) Devices Platform (Phones + IOT + 3 rd Party HW) Payments Platform (Bill Hub + Cash Mgmt) CUSTOMER 360 (unified view of the customer) PAYMENTS BANK

111 Delivery & Distribution - Offline drives Online Mobility DTH + Broadband Payments Bank 80mn Customers Content Live TV Complete cross-pollination Airtel Mitra App Used by 1.2 Mn retailers 80mn Customers Music 100mn Customers

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