Vodafone Idea Ltd · NSE:IDEA
Vodafone Idea — Idea Cellular — Q2 FY2018 Earnings Presentation
31 slides from Vodafone Idea's earnings presentation, November 2017
Slide 1: Idea Cellular Limited
Idea Cellular Limited
Slide 2: Agenda
Indian Wireless Industry – Current Trends Idea Performance Way forward Proposed Idea – Vodafone (India) Mobility Merger
Slide 3: Indian Wireless Industry
Indian Wireless Industry Witnessing consolidation; 3-4 Large Pan India Operators Year 2013 to 2016 • Mobile Voice Segment characterized by intense competition - 6 to 9 operators in each service area • Mobile Broadband Data – emerging segment with lower competition Year 2016 to 2017 - Large scale dis
Slide 4: Industry Witnessing Consolidation: Revenue Market Share
Industry Witnessing Consolidation Revenue Market Share (GR) RMS FY13 – Q2FY18 33.1% 32.4% 31.4% 31.2% 30.2% 30.5% 30.7% Airtel [+1.0%] 30.2% 26.6% 28.5% 24.2% 22.5% 21.3% 23.1% 23.3% 23.1% 23.5% Vodafone [-1.2%] 18.9% 16.8% Rest of [-15.6%] 18.9% Ind. * 17.5% Idea [+1.3%] 16.2% 14.9% 16.2% Jio start
Slide 5: Industry Witnessing Consolidation: Subscriber Market Share
Industry Witnessing Consolidation Subscriber Market Share (VLR) CMS – Jun-16 to Sep-17 32.2% 32.2% 29.1% 27.1% 27.0% 27.1% [+0.0%] 26.5% 26.1% 26.5% Airtel 26.1% 25.6% 24.0% Rest of [-8.2%] 20.7% Ind. 20.1% 19.6% 19.5% 19.4% 19.1% Vodafone [-1.6%] 20.0% 19.6% 19.4% Idea [-0.8%] 19.5% 19.2% 19.5% 10.
Slide 6: Large Untapped Wireless Opportunity
Large Untapped Wireless Opportunity For Both Voice & Mobile Broadband While the active subscriber penetration is at ~79%, low rural penetration of ~56% continues to be a source of large untapped opportunity 1.3 billion Indian Population Rural Subs (Mn) Urban Subs (Mn) Rural Penetration Urban Penetra
Slide 7: Agenda
Indian Wireless Industry – Current Trends Idea Performance Way forward Proposed Idea – Vodafone (India) Mobility Merger Internal
Slide 8: Idea Cellular: Re-invented and evolved as it grew
Idea Cellular : Re-invented and evolved as it grew Biggest revenue market share gainer 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 8 service areas through
Slide 9: Idea growth > 1.5x Industry until FY16
Idea growth > 1.5x Industry until FY16, Holding on to subscribers during unprecedented disruptive phase Industry Revenue Idea Gross Revenue Industry Growth % Idea Growth % In Rs. Crs 18.6% 19.8% 13.9% 13.5% 20.0% 360,000 13.0% 300,000 10.8% -1.4% 6.0% 9.2% 9.3% 5.4% -1.0% 240,000 -1.6% 36,409 35,896
Slide 10: Idea gaining among the highest incremental subs net adds share
Idea gaining among the highest incremental subs Net Adds share over last 4 years Industry VLR Subscriber (Mn) Idea VLR Subscriber (Mn) Industry growth % Idea growth % 25.0% 18.2% 1800 16.9% 20.0% 13.4% 15.0% 9.1% 7.2% 1500 10.0% 10.0% 10.2% 4.9% 5.0% 1200 5.5% 6.2% 196 0.0% 186 171 900 145 -5.0% 124
Slide 11: Idea Revenue & EBITDA trends
Idea Revenue & EBITDA trends Revenue growth EBITDA growth Revenue (Rs. Cr) EBITDA (Rs. Cr) 37.5% 32.6% 22.6% 20.3% 17.3% 19.1% 14.8% 13.9% 40,000 -1.0% -14.7% 30,000 20,000 35,949 35,576 31,555 26,504 10,000 22,595 9,794 12,006 10,244 5,372 7,388 0 FY13 FY14 FY15 FY16 FY17 In US$ Mn Year FY13 FY14 F
Slide 12: Idea – Recent Financial Trends
Idea – Recent Financial Trends Rs Cr Revenue EBITDA Rs Cr Cash Profit Net Profit 9,300 1,941 8,663 8,126 8,166 7,465 1,228 1,249 961 289 4 2,837 (479) (430) 2,192 2,120 (617) 1,875 1,502 (1,176) Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 US$ Mn Revenue 1,424 1,327 1,245 1,
Slide 13: Idea - Key Operating Trends
Idea - Key Operating Trends Billion MOU Growth in MOU (%) Billion Total Data Volume Growth in data volume 260 255.0 0.20 250.7 500 438.7 99% 231.4 0.15 230 400 1 209.8 74% 0.10 300 1 252.8 200 195.5 10.3% 8.4% 7.3% 0.05 200 0 127.0 107.4 108.8 170 0 0.00 100 1.7% 15% 1% 17% -1.9% 0 0 140 -0.05 Q2FY1
Slide 14: Agenda
Indian Wireless Industry – Current Trends Idea Performance Way forward Proposed Idea – Vodafone (India) Mobility Merger
Slide 15: Competitive Spectrum Footprint
Competitive Spectrum Footprint Pan India Mobile Broadband Spectrum FDD TDD FDD GSM Broadband Carrier Service Areas (2x)* (2G) 900 1800 2100 Total 2300 2500 Total 3G 4G Total +TDD services 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 62.0 √ 1 5 6 L
Slide 16: Building Capacity for Future
Building Capacity for Future 2G Cell Sites Broadband Sites (3G+4G) Optical Fibre Cable (OFC) 330,000 190,000 ~165-170K 260,000 144,600 150,000 ~145-150K 115,500 190,000 110,054 110,000 93,400 82,000 64,703 74,000 30,291 120,000 21,381 70,000 17,140 ~131-132K 126,833 131,486 104,778 112,367 90,094 50
Slide 17: Idea Getting stronger in Digital Content Services
Idea – Getting stronger in Digital Content Services Own range of Digital Services Launched since Q4 FY17 Idea News & Magazines* • Rating 4.2 on Playstore • Rating 4.4 on Playstore • Over 1 lakh issues • 1.5mn customers • 4.5mn customers • 4.5mn customers • 4,000+ national and • 2,000 games • 3 milli
Slide 18: Agenda
Indian Wireless Industry – Current Trends Idea Performance Way forward Proposed Idea – Vodafone (India) Mobility Merger Internal
Slide 19: Creating the leading Indian mobile operator
Creating the leading Indian mobile operator (cont’d) Subs (mn) 190.2 207.4 397.6 373.0 138.6 Revenue** (bn) 304.3 399.4 703.7 698.9 272.0 RMS 16.2% 21.3% 37.5% 37.3% 14.5% CMS 16.1% 17.5% 33.6% 31.5% 11.7% # 3G / 4G 15 / 20 16 / 17 22 / 22 22 / 22 NA / 22 circles GSM / BB sites 131 / 134 140 / 128 2
Slide 20: Competitive revenue position across all circles
Competitive revenue position across all circles Circle share in Idea Vodafone Combined Idea RMS Vodafone Combined Circles Industry RMS RMS RMS Rank RMS Rank Rank Revenue Kerala 4% 35.3% 23.5% 58.9% 1 2 1 Maharashtra 8% 29.5% 23.2% 52.7% 1 2 1 JAMMU Gujarat 6% 18.7% 32.4% 51.1% 3 1 1 & KASHMIR Haryan
Slide 21: World's largest mobile telecom operator
^ World’s 2 largest mobile telecom operator : nd servicing ~400mn subscribers Circle share Vodafone Idea Vodafone Combined Idea CMS Combined Circles in Industry CMS CMS CMS CMS Rank Rank Subscriber Rank Maharashtra 8% 28.7% 20.5% 49.2% 1 2 1 Gujarat 6% 18.5% 29.3% 47.8% 2 1 1 JAMMU Kerala 3% 27.6% 1
Slide 22: 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 10,235 9,900 No. of Tenancies No. of Towers Monetisation of Idea’s Indus Agreement with American Towers (ATC) reached for sale of above stake in process portfoli
Slide 23: Update on Merger
Update on Merger • Received unconditional approval from Competition Commission of India on July 24th, 2017 • Received conditional approval from Stock Exchanges/ SEBI on August 4th, 2017 • Filed an application before National Company Law Tribunal for approval of merger on August 08th, 2017 • Received
Slide 24: Annexures
Annexures
Slide 25: Shareholding
Shareholding As on 30 September 2017 Indian Others, 11.28% Promoter Group, Foreign 42.38% Holding, 46.34% PROMOTERS’ HOLDING TOP 5 PUBLIC SHAREHOLDERS GRASIM INDUSTRIES LTD 27.96% AXIATA INVESTMENTS 1 (INDIA) LTD. 12.88% BIRLA TMT HOLDINGS PRIVATE AXIATA INVESTMENTS 2 (INDIA) LTD. 6.86% 7.86% LIMITE
Slide 26: Idea 15 Service Areas – Core Strength
Idea 15 Service Areas – Core Strength • Own 2G, 3G and 4G spectrum in 8 Established Service Areas (Leadership) all 8 leadership service areas • Offer broadband services in all 8 Spectrum Service Area RMS Q2FY181 Rank2 Profile service areas • Total 42 broadband carriers in M. P. 36.4% 1 2G/3G/4G thes
Slide 27: Idea 7 New Service Areas - Emerging Opportunity
Idea 7 New Service Areas - Emerging Opportunity Idea launched services during FY10 in 7 new service areas; combined RMS of 5.9%1 in Q2FY18 Idea currently offers broadband services in all 7 circles Leverage synergies of pan India operations i.e. roaming, NLD, Ad spend, common Network & IT elements Q2
Slide 28: Board Members
Board Members Mr. Sanjeev Aga – Non-Executive Director Mr. Kumar Mangalam Birla – Chairman (Non-Executive) Mr. Sanjeev Aga served as the Managing Director of Idea Mr. Kumar Mangalam Birla is the Chairman of Idea and PIC for the period November 1, 2006 to March 31, 2011. Mr. Aditya Birla Group. H
Slide 29: Board Members
Board Members Mr. Arun Thiagarajan – Independent Director Mr. Arun Thiagarajan has served as a part-time Non- Mr. Mohan Gyani – Independent Director Executive Independent Chairman of ING Vysya Bank Mr. Mohan Gyani has considerable telecommunication and Limited. Mr. Thiagarajan was the Managing D
Slide 30: Management Team
Management Team Deputy Managing Director, aged 61 years Director-Operations, aged 57 years B.Tech. from IIT Delhi and Post Graduate from Indian Around 29 years of experience spanning FMCG and Institute of Management Ahmedabad with over 34 years Telecom. Held senior positions in Sales, Marketing
Slide 31: Thanks
Thanks