Slide 1: Idea Cellular Limited Investor Presentation
IDEA CELLULAR LIMITED INVESTOR PRESENTATION Public
Slide 2: Disclaimer
Disclaimer This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell any securities. This presentation should not be considered as a recommendation that any investor should subscribe for, or purchase,
Slide 3: Idea Cellular
Public Idea Cellular Pan India Pure Play Wireless Operator - Voice + Data (2G+3G*+4G**) No.6 Ranked US$ 10.3bn Operator in the Enterprise Value (4) World by Subscribers (1) FY14 Consolidated An Aditya Birla No. 3 Gross Revenue Group Company Operator in India US$4.4 bn and with 17.1% RMS(2) EBITDA US
Slide 4: India Telecom Sector Backdrop
Public India Telecom Sector Backdrop Growth Drivers Competition Regulatory Voice Top 3 operators garnered 71.3%(3) of Indian Mobile revenue market share Indian Active subscriber penetration Auction of 353.2 MHz of spectrum in (“RMS”). (measured on VLR) at 63.9% (795 900 MHz (Metro) and 1800 MHz (pan
Slide 5: Since Inception, as Idea Grew & Evolved It Re-invented itself Thrice
Public Since Inception, as Idea Grew & Evolved It Re-invented itself Thrice 2011 – 2014 1998 – 2005 2006 – 2010 1997 Upgraded Services to 3G & Expanded to 8 Became a Pan India Started with 2 4G Capability Service Areas Mobile Service Provider Service Areas From No.3 to 3-Way JV Single Promoter One A
Slide 6: Indian Wireless Sector – Revenue Trend
Public Indian Wireless Sector – Revenue Trend Sector Quarterly Gross Revenue (INR bn) Idea – Steady Revenue Market Share (RMS) improvement Idea has grown ~2.0x faster than rest of the industry combined over last 4 years 450.2 Others 450.0 82.9% Industry Idea 409.2 373.0 375.0 Idea 331.9 17.1% 300.0
Slide 7: Subscriber Trends
Public Subscriber Trends Industry Industry VLR (mn) VLR Penetration Industry VLR growth revives post Decline in FY13 825 791 795 65% ~68mn VLR FY12 FY13 FY14 Q1FY15 subs added in 723 63.9% FY14 vs ~40mn 60% Industry EoP VLR (mn) 682.9 723.0 790.9 795.5 683 675 in FY13 63.8% 55% Industry Incr. VLR (m
Slide 8: Declining Competitive Intensity
Public Declining Competitive Intensity Cumulative Number of Operators in All Service Areas(1) Feb’14 Auction – 1800 MHz Spectrum 280 249 (307.2 MHz) 250 Others 220 Operator 4 22.2 MHz Operator 1 171 49.0MHz 97.0MHz 190 7% 160 136 16% 31% 130 100 Operator 2 Dec'08 Dec'11 Dec-13 Idea 78.8MHz 60.2MHz 2
Slide 9: Idea – An Overview
Public Idea – An Overview Idea has consistently gained Revenue Wireless Business Market Share …(1) A pan India pure wireless play 2G-GSM service provider. RMS Incr. RMS Third largest operator in India, by Mobility Revenues and 28.9% VLR subscribers(1) 25.7% Holds 3G Spectrum (2100 & 900 MHz) i
Slide 10: Idea – The fastest growing Indian Telco Now One Amongst the Top 3
Public Idea – The fastest growing Indian Telco Now One Amongst the Top 3 RMS IRMS Q4’11-’15 FY11-14 FY13-14 32.5% Telco 1 30.8% 30.8% 31.1% 28.4% 33.5% 30.0% [ -1.4% ] 23.3% 23.2% Telco 2 22.4% 28.0% 30.4% 21.4% 21.7% [ +1.8% ] 17.1% Idea 24.1% 29.8% 16.2% 14.9% [ +4.0% ] 13.9% 13.0% 11.2% 8.1% Telc
Slide 11: Service Areas – Strength
Public 15 Service Areas – Strength 8 Established Service Areas (leadership) Owns 3G Spectrum in all ‘8 Service RMS RMS Spectrum 40.7% of Rank2 Leadership Service Areas’ Areas Q1FY121 Q1FY151 Profile India and ability to launch LTE in MP 31.2% 37.7% 2G/3G/4G 1 Mobility Revenue 6 service areas Kerala
Slide 12: New Service Areas - Opportunity
Public 7 New Service Areas - Opportunity Launched services during FY10; combined RMS of 4.5%1 in Q4FY14 Won 3G Spectrum (2100 MHz) in J&K (May 2010). Acquired 5 MHz spectrum in 1800 MHz frequency auction in Nov’12 (6.25 MHz in West Bengal) in these service areas (post cancellation of license by Supr
Slide 13: Improved Spectrum Profile post Feb’14 Auction
Public Improved Spectrum Profile post Feb’14 Auction Current Spectrum Profile Capability to Offer Circles (Holding in MHz) 1800* 2100 • In the recently concluded 900 Total ` GSM 3G LTE spectrum auction, Idea won 5 Maharashtra* 7.8 11.0 5.0 23.8 MHz for Delhi service area Kerala 6.2 11.8 5.0 23
Slide 14: The Indus Advantage
Public The Indus Advantage Provides passive infrastructure services in 15 service areas Leading independent tower company in the world with around 113,500 towers and tenancy ratio of 2.09 (as of June 30, 2014) Indus Share Holding Combined revenue market share of three shareholders is 71.3%(1) Idea b
Slide 15: Indians on Mobile Voice and Internet Access
Public 791 Mn Indians on Mobile Voice 252 Mn Indians have Internet Access 233 Mn of them on Mobile Internet 560 Mn waiting to be connected… With no Fixed Line for Nearly Entire India, Mobile Internet is the Only Access to Internet – Their Ticket to the Digital Era 15 Source: TRAI Report, Mar 2014
Slide 16: Idea Mobile Data – The Next Opportunity
Public Idea Mobile Data – The Next Opportunity Improving Data penetration Strong Data Volume Growth 3G Data Usages (mn MB) 2G Data Usages (mn MB) 35 Data Subs (mn) Data Subs as % to Total subs 30% 135.8% (YoY) 35,000 32,516 30 25% 26.4% 27,299 24.7% 30,000 15,719 25 20% 25,000 20,840 13,084 19.8% 20
Slide 17: Idea Revenue and Cost Per Minute
Public Idea Revenue and Cost Per Minute(1) Voice Pricing Power Returning as Competitive Intensity Declines 64.5 Gross Rev / Min (paise) Opex / Min (Pre-EBITDA) (paise) 65 60 55 53.0 50 44.5 45.3 45 42.4 42.6 46.4 41.5 40 8.6 12.5 13.6 40.1 (20.3%) (28.0%) (30.0%) 35 33.8 33.1 30 31.8 32.1 31.7 Growt
Slide 18: Key Operating Trends
Public Key Operating Trends Realized Rate per Minute Minutes of Use on Network Paisa Tariff recovering after hyper Billion 46.0 45.1 600 competitive phase 587.8 43.8 43.7 44.0 500 532.1 453.1 42.0 41.2 400 41.0 362.6 40.0 300 247.5 38.0 200 165.2 Q1FY11 Q1FY12 Q1FY13 Q1FY14 Q1FY15 147.3 ARPM US 100
Slide 19: Financial Trending (Consolidated)
Public Financial Trending (Consolidated) INR Bn Growth in Revenue INR Bn Growth in EBITDA 265.2 85 EBITDA EBITDA% 83.3 33.20% 34% 250 224.6 195.4 75 32% 200 155.0 65 30% 60.0 31.4% 150 125.0 55 27.7% 28% 50.9 45 24.5% 26.7% 26% 100 75.6 26.1% 35 34.6 24% 37.9 50 65.4 25 22% 20.8 25.1 0 15 20% FY10 F
Slide 20: Financial Trending (Consolidated)
Public Financial Trending (Consolidated) INR Bn Growth in Revenue INR Bn Growth in EBITDA 80 75.6 65.4 EBITDA EBITDA% 36% 25.1 24 34% 60 55.0 20.8 45.2 32% 18 33.2% 31.8% 40 36.5 14.4 30% 12 12.0 28% 8.9 20 26% 6 26.6% 26.1% 24% 24.3% 0 0 22% Q1FY11 Q1FY12 Q1FY13 Q1FY14 Q1FY15 Q1FY11 Q1FY12 Q1FY13 Q
Slide 21: Key Financial Ratios
Public Key Financial Ratios (1) Investment Efficiency Steep fall in Capex (2) to Revenue ratio Free Cash Flow (INR bn) (3) 27.4 47.6% As of June 30, 2014 (Rs bn) USD bn 50% Gross Block+ CWIP 571.50 9.51 24 [$ 456 mn] Value of Spectrum 210.70 3.51 16 11.37 40% Other Assets 360.80 6.00 8 [$ 189 mn] 30
Slide 22: Idea Q1FY15 Performance
Public Idea Q1FY15 Performance YoY Consolidated (Rs mn)* Q1FY14 Q1FY15 Growth (%) Gross Revenue 65,388 75,610 15.6% EBITDA 20,763 25,106 20.9% EBITDA Margin (%) 31.8% 33.2% 1.5% Capex** 13,572 5,059 -62.7% EBITDA-Capex** 7,192 20,047 178.8% Gross Block+CWIP 4,88,432 6,31,046 29.2% KPI Summary Subscr
Slide 23: Appendix
Public Appendix 23
Slide 24: Recent Financial Trends
Public Recent Financial Trends INR bn Growth in Revenue INR bn Growth in EBITDA 300 90 Voice Rev. VAS+Data Rev. Other Revenue 83.3 5.4 80 250 18.1% 42.0 5.4 38.8% 70 200 32.8 Total Revenue 60.0 60 150 16.9% 217.8 186.4 50 Voice Revenue $ 999 Mn $ 1,387 Mn 100 40 FY13 FY14 FY13 FY14 $ 3,737Mn $ 4,413
Slide 25: Idea: Successful Growth Track-record
Public Idea: Successful Growth Track-record FY2007 FY2014 Comments (IPO in Q4FY07) Operation in 11 Pan India Strong Performance CMS Rank 6 in FY07(1) Company Profile CMS Rank 3 in FY14(1) circles Operations since IPO Customer Base (mm)(1) 14.0 135.8 9.7x Revenue (US$ mn) $730 $4,412 6.0x EBITDA (US$
Slide 26: Idea – Key Capabilities & Strengths
Public Idea – Key Capabilities & Strengths Wide Cellular Network o Covers ~ 76% of all India Population extended to ~347,000 Towns & Villages on GSM network. o ~ 84,000 km of Fiber & 2500 3G fibre POPs serve as data network backbone o Earnest drive to reduce carbon footprint – solar-powered cell sit
Slide 27: Idea – Key Capabilities & Strengths
Public Idea – Key Capabilities & Strengths Growing Data Business o ~ 27.9 Million data users ( more than 1mb/month users) on 2G EDGE and 3G HSPA services o ~10.6 Million subscribers use 3G services out of 139 Million overall subscriber base o Idea’s own current range of ‘Idea Smartfones’ starting at
Slide 28: Idea – Key Capabilities & Strengths
Public Idea – Key Capabilities & Strengths Strong IT Processes & Support o Modern Prepaid Vtop-Up system & Pan-India Postpaid billing system BSCS IX o Large Siebel based pan-India Prepaid and Postpaid CRM deployment o High emphasis on sales automation through advanced Dealer Sales Mgmt. application
Slide 29: Idea – Some Recent Awards & Recognitions
Public Idea – Some Recent Awards & Recognitions Corporate Awards oWon 2 Awards at Economic Times Telecom Awards 2013 Most Innovative Service Provider Awards under Enterprise category My Favourite Service Provider Award oAmity Telecom Excellence Award for 'The Best Rural Services Provider of the
Slide 30: Idea Brand Philosophy
Public Idea Brand Philosophy Transforming Indian consumers’ life through Mobile Telephony India’s No. 21 ‘Most Valuable Brand’ as per ‘Best Indian Brands 2013’ study by Interbrand, a leading global branding consultancy 30
Slide 31: Shareholding
Public Shareholding As on 30 June’14 Indian Others, 7.37% Foreign Promoter Holding, Group, 42.91% 49.72% PROMOTERS’ HOLDING TOP 5 PUBLIC SHAREHOLDERS ADITYA BIRLA NUVO LIMITED 23.63% AXIATA INVESTMENTS 1 (INDIA) LTD. 13.11% BIRLA TMT HOLDINGS PRIVATE LIMITED 8.00% AXIATA INVESTMENTS 2 (INDIA) LTD. 5
Slide 32: Aditya Birla Group
Public Aditya Birla Group Our Businesses Our Brands Agri Business Carbon Black Acrylic Fibre Cement Chemicals Financial services Insulators IT/ITes Metals & Mining Pulp & Fibre Retail Solar Trading Textile & Apparel Telecom A leading business conglomerate and one of the India’s most respected busi
Slide 33: Board Members
Public Board Members Mr. Kumar Mangalam Birla – Chairman (Non-Executive) Mr. Arun Thiagarajan – Independent Director Mr. Kumar Mangalam Birla is the Chairman of Idea and Aditya Birla Group. Mr. Arun Thiagarajan is currently a part-time Non-Executive Independent He chairs the Boards of the major
Slide 34: Board Members
Public Board Members Mr. R.C. Bhargava – Independent Director Mr. Sanjeev Aga – Non -Executive Director Mr. R.C Bhargava served in Indian Administrative Services and has held Mr. Sanjeev Aga served as the Managing Director of Idea for the period the post of Joint Secretary in the Ministry of Ene
Slide 35: Management Team
Public Management Team Chief Financial Officer, aged 50 years o CA and Licentiate CS with over 27 years of industry experience Deputy Managing Director, aged 57 years o Joined ABG in August 1986 at Grasim. Worked with ABG in o B.Tech. from IIT Delhi and Post Graduation from Indian Institute Thai
Slide 36: Glossary
Public Glossary Definitions/ S. No. Description/Full Form Abbreviation Is Incremental Revenue Market Share (RMS), calculated as change in absolute revenue for Idea divided by change in 1 Incremental RMS absolute revenue for Industry during the relevant period Incremental VLR Is Incremental Visitor L
Slide 37: Glossary
Public Glossary Definitions/ S. No. Description/Full Form Abbreviation Is calculated as total tax charged to Profit and Loss Account divided by Profit Before Tax (PBT) for the relevant 12 Effective Tax Rate period 13 EoP End of Period 37
Slide 38: Thank You
Thank You ADITYA BIRLA GROUP