Vodafone Idea Ltd · NSE:IDEA
Vodafone Idea — Idea Cellular — Investor Presentation (November 2014)
37 slides from Vodafone Idea's investor presentation, November 2014
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$ 11.8bn 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$4.3 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 Auction of 353.2 MHz of spectrum in Indian Mobile revenue market share 900 MHz (Metro) and 1800 MHz (pan Indian Active subscriber penetration (“RMS”). India) bands concluded in Feb’1
Slide 5: Since Inception, Idea Re-invented Itself Thrice
Public Since Inception, as Idea Grew & Evolved It Re-invented itself Thrice 2011 – 2014 2006 – 2010 1997 1998 – 2005 Upgraded Services to 3G & Expanded to 8 Became a Pan India Started with 2 added 4G Capability Service Areas Mobile Service Provider Service Areas From No.3 to 3-Way JV Single Promoter
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 825 791 807 65% ~68mn VLR YTD subs added in 64.8% FY12 FY13 FY14 723 Aug'14 FY14 vs ~40mn 60% 683 Industry EoP VLR (mn) 682.9 723.0 790.9 807.3 675 in FY13 63.8% 59.0% 55% Industry In
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: The Fastest Growing Indian Telco, Now Among 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: 15 Service Areas – Strength
Public 15 Service Areas – Strength 8 Established Service Areas (Leadership) Owns 3G Spectrum in all ‘8 RMS RMS Spectrum Leadership Service Areas’ Service Area Rank2 40.7% of Q1FY121 Q1FY151 Profile and ability to launch LTE in M.P. 31.2% 37.7% 1 2G/3G/4G India 6 service areas Mobility Kerala 31.3% 3
Slide 12: 7 New Service Areas - Opportunity
Public 7 New Service Areas - Opportunity Launched services during FY10; combined RMS of 4.5%1 in Q1FY15 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 114,100 towers and tenancy ratio of 2.12 (as of SeptemberIndus 30,Share 2014)Holding Combined revenue market share of three shareholders is 71.3%(1) Idea
Slide 15: Mobile Voice and Internet Users in India
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 Low Fixed Line Penetration, 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% 125.9% (YoY) 42,000 39,428 30 25% 26.4% 35,000 32,516 19,786 25 20% 27,299 15,719 21.5% 28,000 33.6 19.
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 45.7 44.5 45 46.8 42.4 42.6 41.5 40 8.6 13.6 12.5 40.0 (20.3%) (28.0%) (29.8%) 35 33.8 33.2 30 31.9 32.1 32.1 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 46.5 competitive phase 45.9 600 587.8 44.7 44.5 500 532.1 42.3 42.7 453.1 42.5 400 41.3 362.6 327.7 40.5 300 286.1 247.5 38.5 200 Q2FY11 Q2FY12 Q2FY13 Q2FY14 Q2FY15 ARPM US 100
Slide 19: Annual Financial Trending (Consolidated)
Public Annual Financial Trending (Consolidated) INR Bn Growth in Revenue INR Bn Growth in EBITDA 265.2 85 EBITDA EBITDA% 82.9 33.0% 34% 250 224.6 195.4 75 32% 200 155.0 65 30% 151.3 59.8 31.3% 150 125.0 55 27.9% 50.4 28% 45 38.0 26.6% 49.9 26% 100 128.6 25.8% 35 34.9 40.1 24% 50 24.5% 25 22% 0 15 20
Slide 20: Quarterly Financial Trending (Consolidated)
Public Quarterly Financial Trending (Consolidated) INR Bn Growth in Revenue INR Bn Growth in EBITDA 80 75.7 EBITDA% 36% 63.2 24.9 24 34% 60 53.1 19.6 32% 46.2 18 32.9% 40 36.6 14.4 31.0% 30% 12 11.6 28% 8.8 20 27.1% 26% 6 24% 24.2% 25.0% 0 0 22% Q2FY11 Q2FY12 Q2FY13 Q2FY14 Q2FY15 Q2FY11 Q2FY12 Q2FY1
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) 27.2 47.6% As of Sept 30, 2014 (Rs bn) USD bn 50% Gross Block+ CWIP 583.50 9.47 24 [$ 441 mn] Value of Spectrum 210.70 3.42 16 11.2 40% Other Assets 372.80 6.05 8 [$ 182 mn] 30%
Slide 22: Idea H1FY15 Performance
Public Idea H1FY15 Performance YoY Consolidated (Rs mn)* H1FY14 H1FY15 Growth (%) Gross Revenue 1,28,620 1,51,309 17.6% EBITDA 40,115 49,945 24.5% EBITDA Margin (%) 31.2% 33.0% 1.8% Capex** 24,585 17,423 -29.1% EBITDA-Capex** 15,530 32,522 109.4% Gross Block+CWIP 4,99,445 6,43,813 28.9% KPI Summary
Slide 23: Appendix
Public Appendix 23
Slide 24: 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) $712 $4,304 6.0x EBITDA (US$
Slide 25: 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 $ 975 Mn $ 1,353 Mn 100 40 FY13 FY14 FY13 FY14 $ 3,645Mn $ 4,304
Slide 26: Idea – Key Capabilities & Strengths
Public Idea – Key Capabilities & Strengths Wide Cellular Network o Covers ~ 77% of all India Population extended to ~350,000 Towns & Villages on GSM network. o ~ 87,600 km of Fiber & 4500 2G+3G fibre POPs serve as data network backbone o Earnest drive to reduce carbon footprint – solar-powered cell
Slide 27: Idea – Key Capabilities & Strengths
Public Idea – Key Capabilities & Strengths Growing Data Business o ~ 30.9 Million data users ( more than 1mb/month users) on 2G EDGE and 3G HSPA services o ~13.3 Million subscribers use 3G services out of ~144 Million overall subscriber base o Idea’s own current range of ‘Idea Smartfones’ starting a
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 September ’14 Indian Others 6.11% Promoter Group Foreign Holding 42.28% 51.61% PROMOTERS’ HOLDING TOP 5 PUBLIC SHAREHOLDERS ADITYA BIRLA NUVO LIMITED 23.29% AXIATA INVESTMENTS 1 (INDIA) LTD. 12.92% BIRLA TMT HOLDINGS PRIVATE LIMITED 7.88% AXIATA INVESTMENTS 2 (INDIA) LTD
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 51 years o CA and Licentiate CS with over 27 years of industry experience Deputy Managing Director, aged 58 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 absolute 1 Incremental RMS revenue for Industry during the relevant period Incremental VLR Is Incremental Visitor L
Slide 37: Thank You
Thank You ADITYA BIRLA GROUP
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