Reliance Communications Limited · NSE:RCOM
Reliance Communications — Merger or Acquisition (July 2007)
26 slides from Reliance Communications's merger presentation, Jul 16, 2007
Slide 1: Reliance Communications
RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai A
Slide 2: Overview of Yipes
Overview of Yipes 2 of 26 16-July-07 Media Conference
Slide 3: Ethernet for Local, National, Global Connectivity
Ethernet for LocalÆNationalÆGlobal Connectivity Local Area Network National Area Network Global Area Network Simple, Secure, Reliable, Scalable 3 of 26 16-July-07 Media Conference
Slide 4: Global Opportunity: Rs 100,000 cr.
Global Opportunity: Rs 100,000 cr. ($ 25 Bn) Rs 100,000 cr. ($ 25 Bn) 100,000 CAGR 28% 80,000 Rs Crores 60,000 Rs 38,000 cr. ($ 9.4 Bn) 40,000 20,000 0 2006 2010 Ethernet Increasing from 13% to 28% of Global Data Market 4 of 26 16-July-07 Media Conference
Slide 5: Yipes Patented Product Capability
Yipes Patented Product Capability Application specific Bandwidth On-Demand performance management Operations and provisioning Multicast Wide Area Network system for SLA management Yipes is at Cutting Edge of Ethernet Technology 5 of 26 16-July-07 Media Conference
Slide 6: Yipes Patented Product Capability
Yipes Patented Product Capability “Yipes has been the most prominent of the new generation of companies making Ethernet the core of its business.” - IDC, “International Ethernet Services: An Overview”, April 2007 “We think it will be two or more years before most providers begin to improve … Yipes o
Slide 7: Yipes US Market Coverage
Yipes US Market Coverage Yipes YipesMarket MarketStats Seattle Stats 99 22,000 22,000Metro MetroRKms RKms Chicago Boston 99 GDP: San Francisco Denver GDP:US$ US$4.64.6Trillion Trillion San Jose New York (~40% of total) (~40% of total) Philadelphia Washington DC 99 Demand Demandgrowth: growth:32% 32%
Slide 8: Yipes Industry Vertical Coverage
Yipes Industry Vertical Coverage Global Addressable Ethernet Market in 2010 by Vertical Financial Legal Government Healthcare Rs 25,000 cr. Rs 7,500 cr. Rs 10,000 cr. Rs 7,500 cr. ($ 6.3 Bn) ($ 1.9 Bn) ($ 2.5 Bn) ($ 1.9 Bn) Yipes Verticals Account for 50% of Ethernet Market 8 of 26 16-July-07 Media
Slide 9: Yipes Industry Vertical Coverage
Yipes Industry Vertical Coverage Financial Legal Government Healthcare Nearly 1,000 Blue-chip Customers in US 9 of 26 16-July-07 Media Conference
Slide 10: Communications Platform for Entire Industry
Communications Platform for Entire Industry Exchanges Traders Yipes is Leading Provider to World’s Largest Exchanges 10 of 26 16-July-07 Media Conference
Slide 11: Market Share (US ports, end-2006)
Market Share (US ports, end-2006) AT&T 13.6% Others 26.2% Verizon 12.2% Level 3 5.3% Time Warner Telecom 10.7% Yipes 5.4% Cogent 8.2% Qwest 9.9% BellSouth 8.5% Yipes is the Largest Pure Play Ethernet Provider in the US 11 of 26 16-July-07 Media Conference
Slide 12: Financial Highlights
Financial Highlights Stable revenue per customer Over 98% repeat revenue Revenue growing at over 40% per annum Gross operating margin exceeds 55% Cash flow positive Debt free Revenue Growth Exceeds 40%, Gross Margin Exceeds 55% 12 of 26 16-July-07 Media Conference
Slide 13: Awards and Recognition
Awards and Recognition 2006 Yipes Continues to Win Accolades 13 of 26 16-July-07 Media Conference
Slide 14: Yipes as part of Reliance Communications
Yipes as part of Reliance Communications Global Ethernet Data Market by 2010 US EMEA Asia Pac Global Rs 30,000 cr. Rs 35,000 cr. Rs 35,000 cr. Rs 100,000 cr. ($ 7.5 Bn) ($ 8.8 Bn) ($ 8.8 Bn) ($ 25 Bn) Address Rs 70,000 cr. ($ 18 Bn) Ethernet Market Outside US 14 of 26 16-July-07 Media Conference
Slide 15: Commitment of Key Management Team
Commitment of Key Management Team Susan Flood, VP, Customer Experience Kamran Sistanizadeh, CTO and Co-Founder With Yipes nearly since its inception in 1999, Network architect with 19+ years experience has 25+ years of experience Howard Warner, VP, Corporate Development Mike McGlone, VP, Sales
Slide 16: Strategic Fit with Reliance Communications
Strategic Fit with Reliance Communications 16 of 26 16-July-07 Media Conference
Slide 17: Highlights of the Acquisition
Highlights of the Acquisition Signed definitive agreement to acquire Yipes Holdings, Inc. 100% buyout in all-cash deal for Rs 1,200 cr. ($ 300 Mn) Yipes to be subsidiary of FLAG Telecom Group Ltd. Yipes is fast growing company Yipes management committed to grow the business globally Larges
Slide 18: Our Global Service Delivery Platform
Our Global Service Delivery Platform CONNECTIVITY GLOBAL ETHERNET Managed Services Edge Hosting ervices Value Capacity Network Added Services Services Transit Network S Services IP N IP S VP LC y L er MP Ap eliv & p li D n Ho cati ent atio ste ons nt lic d Co pp A Transformation from “Fibre Loop Aro
Slide 19: Our Global Network Strategy
Our Global Network Strategy - FLAG Global Network - 65,000+ route kms - FALCON - Iraq Sri Lanka Only Private System Connecting India, Middle East and Asia 19 of 26 16-July-07 Media Conference
Slide 20: Our Global Network Strategy
Our Global Network Strategy Existing Reliance Global Network Planned Expansion Expanding Terabit IP Network Connecting 90% of World GDP 20 of 26 16-July-07 Media Conference
Slide 21: Our Global Product Strategy
Our Global Product Strategy Margin: 30% to 60% Value Added services Managed Network FY 2003 FY 2007 Contact Center Hosting Value Added 35% Services IP VPN Ethernet VPN 45% Global Ethernet IPLC 55% Margin: 15% to 30% 65% IP Transit Capacity Services Capacity Services Wavelengths
Slide 22: Yipes + FLAG: Enormous Synergistic Opportunity
Yipes + FLAG: Enormous Synergistic Opportunity Expand Yipes network in US Rollout Yipes products to Europe, Middle East, Asia and India on FLAG Global Network Double current customer base of Yipes Existing Reliance Global Network Planned Expansion 10% Mkt. Share = Rs 10,000 cr. ($ 2.5 Bn) Oppo
Slide 23: Yipes + FLAG: Opportunity in Financial Connectivity
Yipes + FLAG: Opportunity in Financial Connectivity Move up value chain and rollout products with margin of 55%+ Exploit first mover advantage in emerging markets Existing Partner and Potential Partners and Customers Customers 10% Mkt. Share = Rs 2,500 cr. ($ 630 Mn) Opportunity in 2010 23 of 26
Slide 24: Opportunity in India for Ethernet services
Opportunity in India for Ethernet services Provide high performance Ethernet to customers as they upgrade networks Customers can directly connect to US metros leveraging Yipes ► Largest metro + long-distance next generation OFC network in India ► Over 500,000 directly connected buildings ► Custo
Slide 25: In Summary
In Summary Yipes Cutting Edge Ethernet Technology, High Margin Products and Valuable Customer Base Combined with… FLAG Global Network and Customer Relationships across nearly 40 Countries and Growing… Reliance Communications Leadership in India and Project Execution Skills will… …Create Glob
Slide 26: Reliance Communications
RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai Ambani Group RELIANCE Communications Anil Dhirubhai A
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