Reliance Communications Limited · NSE:RCOM
Reliance Communications — Investor Presentation (February 2009)
52 slides from Reliance Communications's investor presentation, February 2009
Slide 1: Reliance Communications Investor Presentation
Reliance Communications Investor Presentation February 2009
Slide 2: Forward looking statements – Important Note
Forward looking statements – Important Note This presentation and the discussion that follows may contain “forward looking statements” by Reliance Communications Ltd (“RCOM”) that are not historical in nature. These forward looking statements, which may include statements relating to future results
Slide 3: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 3 of 52
Slide 4: India's leading fully integrated & converged service provider
Reliance Communications India’s leading fully integrated & Converged service provider… Wireless Enterprise • Mobile (CDMA & GSM) • Internet Data Center • VAS (Mobile World) • Broadband • Wireless Data • Leased Line • Fixed Wireless • Office Centrex • Public Access Business • MPLS & VPN • WiMax Tower
Slide 5: Reliance Communications: Leadership position
Reliance Communications Reliance Communications: Leadership position 7th largest wireless operator in the world, 2nd largest in India Largest submarine cable network in the world with presence in 60 countries representing 90% of the world’s GDP Largest wireless data operator in India with >50%
Slide 6: Unprecedented scale of infrastructure deployment & fast track execution
Reliance Communications Unprecedented scale of infrastructure deployment & fast track execution FY FY 2009 2009 Wireless FY FY 2007 2007 & & 2008 2008 •Nationwide GSM + CDMA Enterprise •IDC expansion •Launch of WiMax FY FY 2006 2006 Wireless Globalcom •World’s largest n/w rollout cover 1 billion •NG
Slide 7: Building leadership position across all screens
Reliance Communications Building leadership position across all screens 4 screen strategy Wireless | Infratel | Globalcom | Enterprise | Home 7 of 52
Slide 8: Recent performance
Reliance Communications Recent performance Financial Performance Balance Sheet Strength 3Q FY09 Q-o-Q Y-o-Y (Rs. Mn) Assets 880,000 Revenue (Rs. Mn) 58,502 3.6% 20.0% EBITDA (Rs. Mn) 23,525 2.2% 11.7% Networth 290,000 Net Profit (Rs. Mn) 14,102 -7.9% 2.7% Gross Debt 267,000 Net Debt 186,000 EBITDA M
Slide 9: Financial Highlights
Reliance Communications Financial Highlights Key Financial Parameters (Rs. Mn) Revenue EBITDA Net Profit 190,678 81,989 54,005 3% +3 2% 0% 144,683 8 + 57,208 5 107,664 +2 31,637 24,762 4,438 FY06 FY07 FY08 FY06 FY07 FY08 FY06 FY07 FY08 Consistent & Substantial increase in profitability Wireless | In
Slide 10: Key Performance Indicators
Reliance Communications Key Performance Indicators EBITDA Margin Net Profit Margin 45% 30% Bharti RCOM 40% 25% RCOM Bharti 20% 35% 15% 30% 10% Idea Idea 25% 5% 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 EBITDA Margin – Global Benchmarks 60% 53% 50% 50% 40% 41% 42
Slide 11: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 11 of 52
Slide 12: Targets the largest untapped population in the world
Wireless Business Targets the largest untapped population in the world Low wireless penetration… …Leading to strong revenue growth 140% 50% 122% 120% 40% 35% 100% 90% 84% 87% 30% 80% 71% 60% 46% 20% 15% 13% 40% 25% 10% 6% 20% 4% 5% 0% 0% 0% India China Brazil Japan US France UK Japan France UK US Ch
Slide 13: Mobile subscribers in India to cross 500 mn in 2 years
Wireless Business Mobile subscribers in India to cross 500 mn in 2 years… 600 50% Mobile Subscribers (mn) 44% 370 Penetration Subscriber additions (mn) 15.3 357 500 38% 40% 350 10.7 10.2 % 530 400 35 30% 330 10.4 GR 444 30% C A 9.9 300 22% 348 310 9.0 20% 9.2 200 14% 290 256 8.9 9% 273 161 10% 100 2
Slide 14: RCOM: One of the fastest growing wireless companies globally
Wireless Business RCOM: One of the fastest growing wireless companies globally Among India’s top 2 operators with over 66 mn wireless subscribers - Prepaid subscriber additions drive growth - 92% of total subscribers Key Performance Indicators - EBITDA margins among the highest in the industry -
Slide 15: Shall replicate success with nationwide GSM service
Wireless Mobility Over 66 million Happy Wireless Data Fixed Wireless Market in all segments * PCO *CDMA … shall replicate success with nationwide GSM service Wireless | Infratel | Globalcom | Enterprise | Home 15 of 52
Slide 16: Seamless coverage wherever you go
Reliance Communications 24,000 Towns 600,000 Villages 1 Billion Indians CDMA GSM Seamless coverage wherever you go Wireless | Infratel | Globalcom | Enterprise | Home 16 of 52
Slide 17: India's billion people can now expect an unbeatable choice and value proposition
Wireless India’s billion people can now expect an unbeatable choice and value proposition across…. 1. Coverage 2. Quality 3. Customer Choice 4. Handset Range 5. Service Breadth 6. Int’l Roaming 7. Value Added Services Reliance GSM – Set to redefine mobility landscape in India Wireless | Infratel | G
Slide 18: Over 250 handset models across various brands
Wireless Device choice to include both GSM and CDMA Over 250 handset models across various brands Wireless | Infratel | Globalcom | Enterprise | Home 18 of 52
Slide 19: GSM network exploits huge capex and opex synergies
Wireless Business GSM network exploits huge capex and opex synergies Radio bn < 15% investment Electronic $ 10 Retail Network ~ US Sales & Leveraged for Distributio Multiple businesses t: incl. CDMA +GSM BPO + Call Center ntran 3G Ready IT Systems Infrastructure ew e Billing + CRM + SAP 85% of capex
Slide 20: Dual network offers additional market share levers
Wireless Business Dual network offers additional market share levers Existing growth Industry monthly net adds of 7 - 8 mn GSM subscribers momentum Impetus from network expansion in semi-urban/ rural areas Broad Market Segmentation Corporate Requirement Retail/Family Cross technology Similar CUG
Slide 21: Wireless Business: Market segmentation
Reliance Communications Wireless Business: Market segmentation Low handset prices, Primarily GSM & Light pockets incoming CDMA E-mail, Browsers, Office tools, Enterprise GSM Roaming Lifestyle Multimedia, Design (look & feel) GSM Anchored Fixed wireless, Data speeds CDMA Data Users Data speeds CDMA C
Slide 22: Currently national CDMA + Regional GSM player
Wireless Business Currently national CDMA + Regional GSM player RCOM will replicate its dual service success nationwide CDMA + GSM services RCOM Nationwide (1/3 of India) Dual circle Market share Market share 18%+ ~30% Dual circles #1 position in dual technology (CDMA & GSM) service areas Wireless |
Slide 23: Drivers for additional revenue market share
Wireless Business Drivers for additional revenue market share Participation in rapidly growing ~US$ 1 bn International international in-roaming market in-roaming revenue Currently enjoyed by few GSM incumbents Extremely profitable segment GSM non-voice revenue contribution ~10% with SMS cont
Slide 24: Multi-channel customer delivery system
Wireless Business Multi-channel customer delivery system World-class design , fit out & ambience at 2,000 exclusive retail showrooms on High streets/Malls High Quality Reach & National footprint through 3,000 distributors & 600,000 retailers 5,000+ Direct & indirect outbound sales force to cat
Slide 25: Service Innovations: First to reach the market
Wireless Business Service Innovations: First to reach the market Mobile TV Yahoo on Reliance Unlimited local & STD calls Micro-billing MBanking MPay Internet on the move MBlog Wireless | Infratel | Globalcom | Enterprise | Home 25 of 52
Slide 26: Wireless Financial Performance
Wireless Business Financial Performance Revenue (Rs. EBITDA (Rs. 46,000 17,000 16,763 16,623 16,859 16,616 44,119 43,356 44,000 41,608 15,819 42,000 41,187 16,000 39,567 40,000 38,000 15,000 36,000 34,000 14,000 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 EBITDA M
Slide 27: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 27 of 52
Slide 28: Infrastructure Tenancy Slots – Market
Reliance Infratel Infrastructure Tenancy Slots – Market RITL Ground based tower 2G, 3G & 700,000 400,000 RITL Roof top tower 200,000 2008A 2009E 2010E Source: Industry Estimates Wireless | Infratel | Globalcom | Enterprise | Home 28 of 52
Slide 29: Infrastructure overview
Reliance Infratel Infrastructure overview Operational in all 22 circles ~31,000 multi-tenancy towers as on March 31, 2008. Aiming to have ~55,000 multi-tenancy towers by mid-2009 Anchor customer (Reliance Communications) driven strategy Current captive tenancy of 1.3, shall increase to 1.7 a
Slide 30: Infrastructure sharing has taken off
Reliance Infratel Infrastructure sharing has taken off Pressure on site sharing Growth drivers GSM and 3G roll outs Operator imperatives Active sharing Access large rural allowed population Growth Regulation USO scheme for Spectrum scarcity vs. sharing coverage infrastructure Speed of
Slide 31: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 31 of 52
Slide 32: Globalcom Business structure
Globalcom Business Business structure Completed restructuring of our services under four core business segments of Data, Voice, WiMax and NLD Data Voice WiMAX NLD Accelerate growth into $290 Billion communications market by providing comprehensive voice, video & data network services Wireless | In
Slide 33: Market potential
Globalcom Business Market potential Past scope of services Business Unit 2008F Global Market Demand ($bn) Typical margins $2.2 bn 35%–55% WiMAX $1.5 bn $185 bn 15%-25% NLD 20%–40% Data $100 bn 15%–35% Voice Sources: Telegeography, Ovum, Gartner Research Addressable market revenue is ~US$ 290 bn with
Slide 34: Voice Business
Globalcom Business Voice Business Global Reach Innovative Product Leadership Position Suite Retail services in U.S., Reliance Global Call Market share of 30% for Canada, U.K., Australia, - International Calling Service ILD wholesale inbound New Zealand, Hong Kong traffic - Web based service de
Slide 35: Voice Business - Plan to drive profitable growth
Globalcom Business Voice Business - Plan to drive profitable growth Value adds to drive retention and usage - Loyalty and reward program Continued - Money transfer services Product Entertainment and content features Innovation - Launch new products like: - Web based Audio and Video Conferencing
Slide 36: Data Business
Globalcom Business Data Business Unmatched Blue Chip Customers Leadership Position Capabilities Global presence in over 60 Diverse base of over 200 Ranked amongst top 5 in countries. World’s largest carriers, ISPs and content Global Network Service IP optical network providers. Providers by Ga
Slide 37: Data Business - Plan to drive profitable growth
Globalcom Business Data Business - Plan to drive profitable growth Enhance revenue contribution from higher margin value added services Vertical “Sell to, sell through, sell with” channel partners to Expansion extend the customer franchise Expand Geographical Coverage: - Reach of cable network
Slide 38: WiMAX Business
Globalcom Business WiMAX Business Building a Spectrum Bank Way Forward Focused on acquiring licenses and spectrum in Operationalise WiMAX emerging markets; market size of WiMAX business in select estimated to be US$ 10 bn by 2010 geographies Leverage the low cost and scalable delivery center i
Slide 39: Globalcom Financial Performance
Globalcom Business Financial Performance Revenue (Rs. EBITDA (Rs. 18,000 16,915 16,783 5,000 15,257 15,260 4,315 4,089 13,299 4,000 3,428 3,608 14,000 3,222 3,000 10,000 2,000 6,000 1,000 2,000 0 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 EBITDA Margin 50% 40% 30
Slide 40: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 40 of 52
Slide 41: Underserved market: Provides strong growth opportunity
Enterprise Business Underserved market: Provides strong growth opportunity Broadband market segment revenue (US$ bn) US$ 13 bn bn 8 $ US + US$ 5.5 bn FY2007 FY2011 Household SMB + SME Enterprise Source : Industry Report Indian Market to grow by US$ 8 bn in the next 3 years Wireless | Infratel | Glob
Slide 42: RCOM: Best positioned to drive growth
Enterprise Business RCOM: Best positioned to drive growth >50% market share in highest growth data Atlantic products like IDC, Centrex solutions, VPN, etc Fiber Ring Meshed Core ~900,000 buildings connected across top 44 cities to our fiber network, to cross 1.5 mn by Pacific next year end Hav
Slide 43: WiMax is our access technology: Fastest subscriber take-up
Enterprise Business - SMEs WiMax is our access technology: Fastest subscriber take-up Launched services in top 10 cities in India - Services available in Mumbai, Delhi, Bangalore, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad, Baroda & Surat Service offering - Business internet for SMEs/SMBs - Te
Slide 44: IDC: Largest in India with >60% market share
Enterprise Business - IDC IDC: Largest in India with >60% market share Six data centres with level 3 + accreditation – more than 304,000 sq ft of facilities space Hosting > 20,000 systems and > 1400 terabyte of information Geographic redundancy Wide & complex application hosted - Core Bankin
Slide 45: Enterprise Financial Performance
Enterprise Business Financial Performance Revenue (Rs. EBITDA (Rs. 7,000 6,542 3,000 2,941 2,760 6,023 2,714 5,603 2,492 5,100 5,000 4,564 2,222 2,000 3,000 1,000 1,000 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 3Q FY08 4Q FY08 1Q FY09 2Q FY09 3Q FY09 EBITDA Margin 80% 60% 48.7% 48.9% 48.4% 48.8% 42.2%
Slide 46: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 46 of 52
Slide 47: Target one of the largest + fastest growing pay TV market globally
Home Business Target one of the largest + fastest growing pay TV market globally 400 >30% total HHs are served on C&S 350 in India, mostly Analog Digital cable 300 DTH HHs HHs 250 2% TV HHs (mn) 10% 200 150 100 Analog 50 Cable HHs 0 88% a Au es Th ia a Pa m a S lia n nd n re di U in Ph ista pa s na
Slide 48: Big TV (DTH) - Commercially launched
Home Business Big TV (DTH) - Commercially launched Key service differentiators - More channel choice - Pure Digital viewing - 32 Cinema channels - Easy program guide - Quick channel select - Interactive applications (iNews, iGames, iCricket, etc) - Superior Mpeg 4 technology Pioneering HD Experi
Slide 49: BIG TV Services: Complete suite of services
Home Business BIG TV Services: Complete suite of services BroadcastTV and Radio EPG / Mini EPG Mosaic Portal Information News Stock Entertainment Game VoD / MoD / PVR Karaoke / Photo Album Services Advertisments Interactive Promotion Dedicated Advertiser Location Messaging SMS / MMS Mail Polling / V
Slide 50: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Infratel Home Globalcom Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 50 of 52
Slide 51: Key Takeaways
Looking ahead Key Takeaways Drivers for Impact RCOM launched nationwide GSM service with presence in 14,000 towns in January Increases the Revenue 2009 generating ability RCOM GSM expanding coverage to 24K towns to cover 1 billion people by mid High EBITDA margin CY2009 Businesses improves the o
Slide 52: Thank you
RELIANCE Anil Dhirubhai Ambani Group Thank you
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