Slide 1: Cover letter to stock exchanges: Investor Presentation
ADITYA BIRLA 26th January, 2018 National Stock Exchange of India Limited BSE Limited “Exchange Plaza’, Phiroze Jeejeebhoy Towers, Bandra - Kurla Complex, Dalal Street, Bandra (E), Mumbai — 400 001 Mumbai — 400 051 Dear Sirs, Sub: Investor Presentation Ref: “Idea Cellular Limited” (IDEA / 532822) Pur
Slide 2: Idea Cellular Limited Corporate Presentation January 2018
Idea Cellular Limited Corporate Presentation January 2018
Slide 3: Agenda
Agenda 1. Introduction 5 2. India Wireless Industry : Recent Trends 9 3. Idea Cellular : Performance Overview 15 4. Merger with Vodafone India Limited 24 2
Slide 4: Disclaimer
Disclaimer The information contained in this presentation is provided by Idea Cellular Limited (the “Company” or “ICL”) to you solely for your information. This document is highly confidential and being given solely for your use and may not be retained by you and neither this presentation nor any pa
Slide 5: Introduction
Introduction
Slide 6: Idea Cellular
Idea Cellular No. 3 Pan India Pure Play Operator in India Wireless Operator with 16.2% RMS (2) No.7 Ranked US$ 5.2 bn Market Operator in the Capitalisation(4) World by number of Subscribers (1) An Aditya Birla FY17 Gross Revenue Group Company Serving 203 million US$ 5.5 bn(5) subscribers (3) Network
Slide 7: Aditya Birla Group
Aditya Birla Group Aditya Birla Group Operations in 35+ countries History of 50+ years Presence across metals & mining, cement, carbon black, textiles, garments, retail, chemicals, fertilizers, insurance, financial services industry, and mobile telecommunications Ability to attract best-in-c
Slide 8: Idea Cellular: An Active Participant in and Beneficiary of Industry Consolidation
Idea Cellular : An Active Participant in and Beneficiary of Industry Consolidation 1 Idea-Vodafone : Leading Wireless Operator at an 2 Industry Consolidation Has Led to Sustained Increase in Inflexion Point in the Indian Telecom Industry Market Share for Top 3 Players Revenue Market Share(1) Total S
Slide 9: India Wireless Industry: Recent Trends
India Wireless Industry : Recent Trends
Slide 10: Indian Wireless Industry: Recent Developments
Indian Wireless Industry Recent Developments 2013 Mobile Voice Segment characterized by intense competition - 6 to 10 operators in each service area to 2016 Mobile Broadband Data – emerging segment with lower competition Launch of free services by Jio for extended period of more Date Operator
Slide 11: Significant Potential for Wireless Subscriber Growth
Significant Potential for Wireless Subscriber Growth Significant Gap in Mobile Penetration (1) Underpenetrated Rural Areas 1.3 billion Total Rural Population: 885mm(3) Potential for another 300-400mm subs Indian Population 163% 167% 168% 1.2 billion Mobile subs 149% 141% 140% 143% VLR subs at ~1 b
Slide 12: Industry Consolidation Leading to SIM Consolidation
Industry Consolidation Leading to SIM Consolidation Launch of services by new entrant has led to consolidation of SIM’s in favor of Top 3 operators. Other operators have lost 78mn subs between April – Nov 2017 Revenue Market Share Subscriber Market Share (Gross Revenue) (VLR Subscribers) VLR Subs FY
Slide 13: Industry's Long Term Structural Transition is Offering New Opportunities
Industry’s Long Term Structural Transition is Offering New Opportunities Industry Traffic Per Subscriber Consumption MoU / day (mm) Monthly MoU / Sub +4.4bn mins, +36% +124 mins, +32% Unlimited plans driving huge 16,767 voice minute consumption 16,590 Mobile 15,434 509 Subscriber addition due to
Slide 14: Improving Regulatory Environment
Improving Regulatory Environment The Government of India has Taken Several Measures to Address the Regulatory Overhang Approved in February 2014 M&A Guidelines Increase of the merged entities' market share cap to 50% (including wireline), potentially enabling larger operators to participate in t
Slide 15: Idea Cellular: Performance Overview
Idea Cellular : Performance Overview
Slide 16: Idea Cellular: Re-invented and Evolved as it Grew
Idea Cellular : Re-invented and Evolved as it Grew Highest revenue market share gainer for the period FY11-FY17 Pan India broadband service provider Announced merger with Vodafone India Aditya Birla Group (ABG) acquires controlling stake Idea became Pan India player 2011-2017 Expanded to
Slide 17: Idea Cellular: Grew Faster than Industry Historically
Idea Cellular : Grew Faster than Industry Historically Idea Growth > 1.5x Industry until FY16, Maintaining Idea Gaining among the Highest Incremental Share during Unprecedented Disruptive Phase Subs Net Adds Share over last 4 Financial Years Idea Gross Idea VLR Subs 22,571 26,770 32,074 36,409 35,89
Slide 18: Idea Cellular: Revenue and EBITDA Trends
Idea Cellular : Revenue and EBITDA Trends Revenue Growth EBITDA Growth Revenue (INR Cr.) EBITDA (INR Cr.) 42% 33% 21% 23% 19% 19% 14% 14% -1% -15% 35,804 35,279 31,279 29,827 26,179 22,087 9,673 11,895 10,095 5,138 7,286 6,346 FY13 FY14 FY15 FY16 FY17 LTM Dec'17 Revenue 3,451 4,091 4,887 5,594 5,512
Slide 19: Idea Cellular: Key Operating Trends
Idea Cellular : Key Operating Trends Minutes of Usage (Bn Mins) Data Usage (Bn MBs) MoU per subscriber increasing by over 30% YoY Data consumption per subscriber on a steep rise largely on back of unlimited plans 368 385 412 441 459 509 694 703 957 2,204 3,805 4,742 283 0.20600 571.3 290 99% 255 74%
Slide 20: Idea Cellular: Competitive Spectrum Footprint
Idea Cellular : Competitive Spectrum Footprint Pan India Mobile Broadband Spectrum FDD TDD FDD(1) GSM (2G) Broadband Carrier Service Areas 900 1800 2100 Total 2300 2500 Total +TDD services 3G 4G Total Maharashtra 9.0 11.0 5.0 25.0 10.0 10.0 20.0 70.0 2 5 7 Kerala 6.0 10.0 5.0 21.0 10.0 10.0 20.0 6
Slide 21: Idea Cellular: Innovative Distribution & Servicing Model
Idea Cellular : Innovative Distribution & Servicing Model A Wide Distribution Channel to Capitalize on Rapid Network Expansion 1.4 Million Transacting Retailers 1.2 Million Data Selling O/Ls 31,700 Distributors 8,150 Idea Service Stores across formats Call centres across India Digital Sales & Servic
Slide 22: Idea Cellular: Building Digital Content Services
Idea Cellular : Building Digital Content Services Own range of Digital Applications Launched since Q4 FY17 Launched in November 2017 Idea News & Magazines (1) Nearly 2 mm downloads 5.5 mm downloads 6.4 mm downloads 4,000+ national and international magazines in 65 2,000 games 3 mm tracks
Slide 23: Idea Cellular: Awards and Brand Recognition
Idea Cellular : Awards and Brand Recognition Awards Brand 17 22
Slide 24: Merger with Vodafone India Limited
Merger with Vodafone India Limited
Slide 25: Idea Cellular – Vodafone Merger
Idea Cellular – Vodafone Merger Strong Partnership in the Making Vodafone Merger Update March 2017 Announcement of Merger July 2017 Received approval from Competition Commission of India Received no objection letters from BSE and NSE August 2017 Filed applications before NCLT (Ahmedabad and
Slide 26: Leadership Position Across Circles
Leadership Position Across Circles Leadership position across India… …and across almost all circles Circles where Vodafone / Idea hold #1 or #2 positions based on RMS, Q2 FY 2018 RMS, Q2 FY 2018 Combined market position (1) Metro Mumbai 34.6% 8.5% 43.1% #1 Kolkata 30.2% 6.5% 36.8% #1 Delhi 25.8% 10.
Slide 27: Enhanced Spectrum Position: Pan India 3G and 4G offerings
Enhanced Spectrum Position: Pan India 3G and 4G offerings 17 circles with 900 MHz spectrum No of Carriers Total Spectrum FDD Circles Holding (in MHz) 900 GSM 3G 4G FDD 4G TDD(1) 3G+4G Jammu & Maharashtra 122.8 22.8 3 3 6 12 Kashmir 14.0 Kerala 114.8 12.4 24.8 2 4 5 11 Himachal Gujarat 113.6 11.0 23.
Slide 28: Robust Operating Performance
Robust Operating Performance Subscriber Base (mn)(1) Voice Minutes (Bn mins) 209 207 198 195 190 255 175 231 202 211 186 NA Q4FY16 Q4FY17 H1FY18 Q4FY16 Q4FY17 Q2FY18 Idea Vodafone (2) Idea Vodafone Data Subscribers (mn) Data Volume (000 TBs) 112 109 106 823 175 68 67 256 68 177 129 94 230 44 42 38 1
Slide 29: Robust Operating and Financial Performance
Robust Operating and Financial Performance Revenue (INR Cr.)(1) EBITDA (INR Cr.)(1) 33.2% 28.6% 20.7% % Margin 29.8% 26.2% 21.1% 43,644 43,327 35,804 12,996 35,279 11,895 11,338 10,095 19,194 15,403 4,050 3,186 FY16 FY17 H1FY18 FY16 FY17 H1FY18 Idea Idea 5,594 5,512 2,407 1,859 1,577 498 (US$mm) (US
Slide 30: Significant Value Creation Through Synergies
Significant Value Creation Through Synergies Key Areas of Synergies Rationalisation of co-located sites following network consolidation Network Energy savings & operational efficiencies with elimination of older GSM sites Savings related to small cells, IBS and connectivity cost Opex Related C
Slide 31: Structure of the Integration
Structure of the Integration Large team of across various work streams (Network, Regulatory, Talent etc.) spearheading the integration process Chairman’s Council Overall transaction oversight Select 3-4 decisions Dedicated Integration Steering Committee Integration Team Key decision making
Slide 32: Unlocking further Value through Tower Assets
Unlocking further Value through Tower Assets Own towers1 Own towers 11.15% stake2 Tenancy Ratio 1.5x 1.8x 2.4x 33,331 17,914 15,528 13,723 No. Of Tenancies 10,235 9,900 No. of Towers Agreement with American Towers (ATC) reached for sale of above portfolio for an enterprise value of INR 78.5 bn ($1
Slide 33: Joint Management Team & Governance
Joint Management Team & Governance Governance Structure Idea promoters and Vodafone Group will be joint Equal promoters of the combined entity Partnership Equal affirmative rights to both promoters on key matters 12 member Board with 6 independent directors Board Composition Each party to ha
Slide 34: The Way Forward
The Way Forward Expand Broadband Coverage and Capacity Capture Incremental Growth, High ARPU Subs Expand coverage to 1 bn Indians Capture incremental subscriber growth –Competitive share on 4G and Re-deployment of overlapping 3G & 4G sites larger share on 2G Built Capacity Focus on high AR
Slide 35: The End
THE END 27 34