Bharti Airtel. Investor Presentation June 2018

Transcription

1 Bharti Airtel Investor Presentation June 2018

2 Bharti Airtel: Who Are We Third largest telecom operator in the world Presence in 16 countries 1 serving around 414 mn customers #1 operator in India 2 and #2 operator in Africa 3 Highest standards of Corporate Governance ranked #1 by Transparency International Our Guiding Strategy Customer Centricity Win customers through differentiated products and world class technology Performance Excellence Accelerate non-mobile business, grow market share and strip out waste Transparency and Ethical Governance Highest Corporate Governance and disclosure rankings Sources - 1. Excluding JV in Africa (Ghana) 2. Only integrated operator with wireless, wireline & satellite TV. 3. Market leadership (Rank 1 or 2) in 12 of 14 countries Bharti Airtel Limited 2

3 Bharti Airtel: Investment Rationale 1 Presence in underpenetrated markets of India and Africa with large residual opportunity 2 Leading operator with scale and diversified businesses across markets 3 Bulk investments already in place; best in class spectrum bank in markets of operations 4 Demonstrated superior execution capabilities 5 Strong balance sheet enabling ample headroom for expansion 6 Experienced management, diversified board, marquee partners and shareholders Bharti Airtel Limited 3

4 India & Africa - Mobile Market 2 nd largest telecom market in the world 2 nd largest smartphone market in the world 2 nd highest internet users in the world 2 nd largest enterprise & SMB market in the world Source 1, 2,3: GSMA Sub Saharan Africa Report 2017, Source 4: World Population Prospect 17 Second-fastest 1 growing economic zone in the world 420 Million 2 mobile subscribers in Expected to grow to 532 Million by Data Traffic 3 to grow by a CAGR of 66% over the period of Youth % (15-24 yrs) 4-19% Bharti Airtel Limited 4

5 Opportunity in Indian Telecom WIRELESS WIRELESS DATA WIRED BROADBAND 1.3 bn population ~30.37% 2 Mobile Broadband Penetration ~0.7 bn unique wireless customers Rural Penetration 1 ~ 58.67% Mobile data 3 traffic to grow 7-fold from 2016 to 2021 CAGR of 49% 250mn households < 5% connected Household disposable income rising ENTERPRISES MOBILE BANKING DTH AND CABLE 1.5 mn SMB/Enterprises Cash based economy 250 mn households < 10% connectivity 65% consumer transaction Digital Cable/ DTH by value are currently in subscribers~ 125 mn 4 cash Massive untapped opportunity Source: 1 & 2 Telecom Subscription Report, TRAI, 3- VNI Mobile Forecast Highlights, , 4 Digital TV Research Bharti Airtel Limited 5

6 Opportunity in African Telecom WIRELESS 1.2 Bn Population (Airtel Africa covers 547 Mn Population) Median age < 25 SMARTPHONE PENETRATION 1 MOBILE BANKING 2 Smartphone penetration to reach 50% by million smartphones by 2020 Banking Penetration low Mobile money services predominant in most countries DATA TRAFFIC 3 Mobile data traffic to grow by a CAGR of 66% over the period of Average Mobile Penetration: 45% Average Smartphone Penetration: 20% 69% 69% 43% 40% 58% 59% 40% 45% 52% 55% 42% 41% 53% 25% 7% 28% 26% 8% 24% 23% 26% 26% 6% 6% 9% 26% 16% 13% 13% 23% Africa Chad Congo DRC Gabon Kenya Madagascar Malawi Niger Nigeria Rwanda Seychelles Tanzania Uganda Zambia Source 1, 2 & 3 : GSMA Sub Saharan Africa Data Mobile Penetration Smartphone Penetration Bharti Airtel Limited 6

7 Leader in India Revenue Market Share 1 36% ~$22 Bn Indian Telecom Industry* 30.9% Bn total wireless subscribers in India 20.3% 16.6% 15.4% 3.7% 1.4% 6.3% 3.7% 1.7% Airtel Tata Teleservices Telenor Vodafone Idea Cellular Reliance Jio BSNL + MTNL Aircel RCom 1. RMS is calculated on the basis of adjusted gross revenues including NLD. Source: TRAI 2. RMS is as of Q Airtel + Telenor merged. Tata approval pending. 4. Circle wise RMS is on the basis of Gross Revenue 5. RCOM and Aircel folded their wireless operations in Nov 2017 & March 2018 respectively. *Exchange rate as of March 31, Airtel s strength across telecom circles in India Rank 4 No. of Circles & 4 3 Bharti Airtel Limited 7

8 And Customer Market Share % 28.9% 22.7% 21.9% 18.4% 18.8% 17.8% 15.0% 15.8% Value players are fast losing subscriber market share to incumbents 0.0% Mar-14 Mar-17 Mar-18 Airtel Idea Voda Jio Others Note: Airtel and Telenor merged as of May 18. Airtel includes Telenor and excludes Tata. Airtel,Tata Tele Services & Telenor comprise 32% of total industry subscriber base as of March 18 Bharti Airtel Limited 8

9 Leading presence in Africa Country Market size (mn $) Key Telecom operators Our Position Airtel RMS % EBITDA range Key competitors Zambia >40% >40% MTN Niger >40% >40% Orange Malawi >40% >40% TNM Madagascar % 20-30% Orange, Telma Nigeria 4, % 30-40% MTN Kenya 2, <10% <20% Safaricom Uganda >40% >40% MTN Congo B >40% 30-40% MTN Gabon >40% >40% Maroc Chad >40% 20-30% Tigo Rwanda % <20% MTN Seychelles >40% 30-40% C & W DRC % 20-30% Voda, Orange Tanzania 1, % <20% Vodacom, Tigo Source; Company Presentations Bharti Airtel Limited 9

10 Diversified portfolio Revenue Split by segments 1 Africa 23.1% Africa 24.3% EBITDA Split by segments South Asia 0.5% Towers 7.8% Wireless India 48.2% South Asia 0.1% Towers 11.1% Wireless India 39.9% Airtel Business 13.1% Digital Services 4.5% Homes 2.8% As of Q4 18 Non-Mobile Business* comprise of 30.8 % of Total Revenues (~26.1% as of Q4 17) Airtel Business 15.5% Homes Digital 4.1% Services 5.0% 1. Excludes eliminations. * Non Mobile Businesses include Homes, DTH, Airtel Business and Towers.. Bharti Airtel Limited 10

11 Investing for growth Spectrum Holding Band (Avg holding across 22 circles) Airtel Competitor 1 Competitor 2 800/900Mhz Paired Mhz Paired Mhz Paired /2500 Mhz Unpaired Spectrum Band Industry spectrum Spectrum exgovt. operator Airtel s holding SMS 1 excl. govt. operator 900 Mhz % 1800 Mhz 1,082 1, % 2100 Mhz % 2300 Mhz % > $ 16 bn investment in spectrum since 2010 to create best in class spectrum bank Total 3,318 2, % Note: Table excludes RCOM s Admin Spectrum Bharti Airtel Limited 11

12 Aggressive Network Build Total tower count ( 000) Q4'16 Q4'17 Q4'18 Total Mobile Towers Mobile Broadband Towers Mobile Broadband Base Stations per Mobile Broadband Tower National long distance fiber over 237,893 RKms 1 Added c. 8,037 RKms over the past year Global sub-sea cable network of over 250,000 Rkms 2, covering 50 countries and 5 continents. Source: Company filings 1. Excludes fiber from Tata 2. Quarterly Report Q4 18 Bharti Airtel Limited 12

13 Africa: Invested for Growth Abundant spectrum across operations Mobile broadband towers ( 000) Africa Frequency Band (Mhz) OPCO Total Zambia Niger Malawi Madagascar Nigeria Kenya Uganda Congo B Gabon Chad Rwanda Seychelles DRC Ghana JV Tanzania ,959 19,731 12,663 13, Q4'17 Mobile Broadband Towers Total Mobile Towers Q4' Mobile Broadband Base Stations per Mobile Broadband Tower Total tower count ( 000) Bharti Airtel Limited 13

14 STRATEGY INDIA

15 PILLARS OF INDIA STRATEGY Win the 4G game decisively Win with brilliant Network Experience Build New Revenues Win with War on Waste Win with People Bharti Airtel Limited 15

16 Indian telecom market dynamics is changing Explosion of Data Spurt in volumes and smartphone shipments SIM Consolidation GSM data and voice consumption is increasing 1 1,955 1,610 1, , Bundled products Voice and data bundling; total customer ARPU focus Increasing interest in digital content Movies, Amazon, Netflix, Music Source 1: Performance Indicator Report, TRAI Mar'16 Jun'16 Sept'16 Dec'16 Mar'17 June'17 Sep'17 Dec'17 Data usage per sub per month (MB) MOU per sub per month (Mins) Data Usage per sub per month MOU per sub per month YoY YoY 121% 38% India- World s second largest smartphone market Biggest feature phone market globally Source: TRAI Bharti Airtel Limited 16

17 Win the 4G Game decisively Mobile Broadband Customer Base Win the primary 4G SIM Slot 15.6% 17.4% 19.6% 21.4% 25.2% 76,578 62,149 55,218 48,911 42,716 As a % of Total Customer Base Drive upgrades through device partnerships and offers Lock-in customers through postpaid and loyalty programs Q4'17 QoQ Growth Q1'18 Q2'18 Q3'18 Mobile broadband Customers 23% Q4'18 Win every market and channel through micro marketing YoY Growth 79% As of Q4 18, Mobile Broadband customers were 25.2% of total customer base. (~15.6% as of Q4 17) Bharti Airtel Limited 17

18 Brilliant Network Experience Capex - India (Rs. Mn) 239, , , , ,231 FY15 FY16 FY17 FY18 FY19 E Future proof network across access, transport and core layers. Average 4G data speeds by Operator in India (Mbps) Airtel Competitor 1 Competitor 2 Competitor 3 Airtel rated as India s fastest mobile network by Ookla - the global leader in broadband testing and web-based network diagnostic applications for the third time in a row. Source: Bharti Airtel Limited 18

19 Build New Revenues Wynk and Airtel TV Customers (Mn) 92 Build the largest Music and TV service in India. Rapidly grow homes through broadband and DTH expansion Mar'17 Mar'18 Driving down churn 3.6% 3.8% 3.9% 3.3% 2.8% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Source: Media articles, company announcements Wynk Airtel TV Launch enterprise platforms to drive new revenues. Drive new revenue streams in the areas of IoT, Cybersecurity and DCs. Songs Streamed ~ 1.42 Billion/Month Wynk Music ~ #1 app in terms of music consumption in the country. Airtel TV ~ Most downloaded video OTT app of Accelerate SME through GTM re-invention and Leverage Customer 360, training and touch points. Build the largest Payments Bank Bharti Airtel Limited 19

20 War on Waste Opex growth 1 - YoY Q4'17 Q4'18-4.5% -7.1% Mobile broadband BTS per mobile broadband tower Drive down cost through end to end process re-engineering and digitization Q4'17 Q4'18 1. Excludes Access costs, COGS Bharti Airtel Limited 20

21 STRATEGY AFRICA

22 PILLARS OF AFRICA STRATEGY Win with more customers Win with Mobile Money and Data Growth Win with Network Win with right cost design Win with People Key Enablers Bharti Airtel Limited 22

23 Airtel Africa on solid footing Gross Revenues (USD Mn) EBITDA (USD Mn) and Margin (%) % 28.8% 33.0% 35.5% 35.9% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 EBIT (USD Mn) Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 PBT (USD Mn) Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Based on 14 country operations, USD Constant Currency Bharti Airtel Limited 23

24 While maintaining highest standards of Corporate Governance 1 Ranked #1 by Transparency International for highest standards of Corporate Governance 2 Ranked amongst the Forbes list of 100 most innovative companies in the world for Won the prestigious Golden Peacock Award for Corporate Sustainability 2017 Won the Best Brand Loyalty Marketing Campaign and Best CSR Initiative Award at the Asian Customer Engagement Forum (ACEF) awards. Airtel s Internet TV India s first 4K hybrid set-top box, powered by Android TV, won the Tech Peripheral of the Year award. Airtel Ghana won the Best Corporate Social Responsibility Initiative Award at the 2017 African Carrier Awards Airtel Nigeria won the Payment Innovation Award for Airtel s transformative use of mobile financial solutions to solve real world customer problems Bharti Airtel Limited 24

25 Airtel : Financial flexibility & Balance Sheet Focus Focus on deleveraging: Actions undertaken since 2012 Infratel IPO and subsequent stake selldowns Allotment of 5% stake of Airtel to QFE Africa tower sales Sale of 2 Opcos to Orange DTH stake sale to Warburg Pincus Diversified debt profile Leverage: Net Debt (ex-dot) to EBITDA : 1.9 (FY 2018) Maturity: tenors pushed out from 2 years to 7-5 years Diversified debt mix: DOT, Bonds, ECA and Banks Currency diversification: INR,USD,EUR, CHF Interest: Balanced but predominantly a fixed portfolio Bharti Airtel Limited 25

26 THANK YOU