Indus Towers Limited · NSE:INDUSTOWER
Indus Towers — Bharti Infratel — Investor Presentation (March 2017)
35 slides from Indus Towers's investor presentation, March 2017
Slide 1: Investor Presentation
Investor Presentation March 2017 Building and Sharing Vital Infrastructure
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by Bharti Infratel Limited (the “Company”) for use in presentations by the Company
Slide 3: Table of Contents
Table of Contents Company Overview Industry Overview Business Model Strengths In Summary 3 of 35
Slide 4: Company Overview
Ss » 2 Bharti Infratel Limited Company Overview 4 0f35
Slide 5: Bharti Infratel – Who We Are?
Bharti Infratel – Who We Are? A Leading Tower Infrastructure Operator Pan India Presence across all 22 Telecommunications Circles Indus Towers – JV between Bharti Infratel, Vodafone and Aditya Birla Telecom Top 3 Operators – Anchor Customers & Relationships with all other Operators Marquee promoter
Slide 6: Performance at a Glance
Performance at a Glance 90,255 towers and 204,934 co-locations(1) Market share in terms of installed tower base, FY15 38,997 towers of Bharti Infratel and 51,258 towers from 42% stake in Indus (1) Infratel + Indus(1) : 40.8% Others 10.1% FY16 Consolidated Revenue of US$1,861m Indus Viom 31.0% Q3 FY1
Slide 7: Pan India Footprint: Leading Positions Across India
Pan India Footprint : Leading Positions Across India Pan India presence ⁻ Opportunities for voice growth in rural areas given rural penetration of 51.24%(1) ⁻ 3G/4G services to drive data consumption ⁻ Given inadequate wire-line infrastructure, wireless services expected to cater to new demand Bhart
Slide 8: Industry Overview
Ss » 2 Bharti Infratel Limited Industry Overview 8 of 35
Slide 9: Operator Industry Dynamics
Operator Industry Dynamics Market Concentrated in Hands of Select Players The Indian market is dominated by the top 3 operators: BIL's Anchor Tenants Uninor, 2.0% Others, 0.7% RCom, 2.8% Aircel, 5.1% Rjio, -1.0% Bharti Airtel, TTSL, 6.4% 33.3% BSNL+MTNL, 6.5% Anchor tenants : 77.4% RMS Idea Cellular
Slide 10: Continuing Voice Led Growth
Continuing Voice Led Growth Wireless Base continues to rise – and MOU / Sub remain healthy Growth opportunities remain in rural and semi urban voice market Rural penetration still ~ 51% - significant headroom Both coverage and capacity requirements to fuel tower and co-location demand Lower ARPUs fu
Slide 11: Increasing Operator Focus on Data
Increasing Operator Focus on Data An operator agnostic business model, superior network footprint and service quality standards allow Bharti Infratel to capitalize on the growth in the data market Operator Investment in Licenses1 Investments by Anchor Operators4 3G/4G auctions held since 2010 led
Slide 12: Data Revolution Unfolding
Data Revolution Unfolding • Favorable demographics –Median Age of India’s population ~26 years • Broadband penetration ~15%1 & Internet penetration ~29%2 • Technology Adoption and smartphone penetration leading to higher data uptake Superior Technology will lead to Subscriber growth3 Data growth dri
Slide 13: Network & Data Growth Forecasts
Network & Data Growth Forecasts Exponential Growth in Data over the next five years 3G and 4G will be the leading technologies in 2021 India Population Coverage by GSM/EDGE, WCDMA/HSPA and LTE technologies Source: Ericsson Mobility Report – June 2016 13 of 35
Slide 14: Phases of Data led Tower Revenue Growth
Phases of Data led Tower Revenue Growth Airtel has 100 sites in Delhi Due to Propagation effect Total Towers available with Circle (900 + 1800 Mhz) for 2G Airtel will need 150 sites on Indus in Delhi - 135 coverage 2100 MHz for 3G Loading all the existing Loading Revenue for STAGE 1 100 sites with 3
Slide 15: Business Model Strengths
Business Model Strengths 15 of 35
Slide 16: Business Model Strengths
Business Model Strengths 1 A Leading Tower Infrastructure Operator 2 Visibility of Future Revenues Through Long Term Contracts 3 Demonstrated Operational and Financial Performance 4 Implementation of Green Initiatives 5 Experienced Management 16 of 35
Slide 17: A Leading Global Tower Infrastructure Operator
A Leading Global Tower Infrastructure Operator Indian Tower Companies(1) Global Listed Tower Companies(1) Sharing Factor 2.27(2) 1.00 2.2 1.74 1.63 1.9 2.2 1.8 1.7 1.6 180 160 140 71 120 Towers (‘000s) 100 Bharti Infratel + 42% equity interest in Indus 80 144 60 90 40 69 58 20 44 40 28 26 26 15 13 0
Slide 18: Long Term Contracts with Visibility of Future Growth
Long Term Contracts with Visibility of Future Growth Key Features of Master Service Agreements (MSAs) Tenor Long term (10 to 15 years) with built in escalations (2.5% p.a) Termination Penalty Significant exit penalties A base rental rate is applicable, based on the following factors: Base Rent
Slide 19: Business Model Unique to India
Business Model Unique to India Key Features of Master Service Agreements unique to India unlike US Tower Cos Purpose Key Feature Result • It is not economically rewarding for the operators Most operators in India are not building Disarming The Operators to build new towers themselves towers on their
Slide 20: Demonstrated Operational and Financial Performance: Towers and Co-locations
Demonstrated Operational and Financial Performance Stable tower growth… 95,000 90,255 90,000 CAGR: 2.8% 88,808 85,892 Towers (1) 85,000 83,368 (1) Towers 82,083 80,000 79,064 75,000 70,000 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Dec 2016 …coupled with an increase in co-locations 1.85 1.90 1.96 2.06
Slide 21: Revenues, EBITDA and Operating Free Cash Flow
Demonstrated Operational and Financial Performance Strong revenue growth… Strong Operating Leverage Revenues(1)(2) (US$m) 2000 CAGR: 9.8% 1858 Indexed to 100 1761 CAGR 1634 1544 1427 1500 1283 1058 1000 500 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 47.1% … expanding margins… 900 CAGR:
Slide 22: Focus on Delivering Shareholder Value
Focus on Delivering Shareholder Value Bharti Infratel is focused on delivering return to its shareholders through multi-pronged strategy Pursuit of viable value accretive inorganic growth Bharti Infratel is focused on identifying opportunities for inorganic growth that are value accretive and feas
Slide 23: New Opportunities under 'Smart Cities' Project
New opportunities for Telecom Infrastructure development under ‘Smart Cities’ Project Development of Smart Cities key for ‘Digital India’ Program Government has already announced the creation of 100 Smart Cities Communication backbone is key to a Smart City Smart City project entails setting up
Slide 24: Quarterly Performance Reposed Significant Growth
Quarterly Performance Reposed Significant Growth Co-locations Revenue1 (US$m) 510 501 210,000 Y-o-Y Growth: 6.8% 204,934 500 Y-o-Y Growth: 9.5% 198,795 490 485 200,000 196,401 195,035 480 473 191,921 468 470 190,000 457 460 450 180,000 440 430 170,000 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Dec-15 Mar-16
Slide 25: Implementation of Green Initiatives
Implementation of Green Initiatives Bharti Infratel has institutionalized ‘GreenTowers P7’ programme, aimed at minimizing dependency on diesel consumption and thereby, reducing the carbon footprint The ‘GreenTowers P7’ programme is based on seven innovative ideas deploying cleaner energy technol
Slide 26: Experienced Management Team
Experienced Management Team Joined Bharti Infratel in March 2008 as Director Work experience of 30 years Akhil Gupta Certified Chartered Accountant and fellow member of ICAI. Completed an advanced management program at Chairman Harvard Business School. Has received various awards including ‘
Slide 27: CSR, Awards and Recognition
CSR, Awards and Recognition Awards and Recognition Dun & Bradstreet Infra Awards 2016 • Bharti Infratel was announced as the winner under the category Telecom Infrastructure Development by Dun & Bradstreet Infra Awards 2016 TowerXchange A&ME Meetup • Bharti Infratel was also conferred with 'Green In
Slide 28: In Summary
Ss » 2 Bharti Infratel Limited In Summary 28 of 35
Slide 29: Company Strategy
Company Strategy Promote Tower Sharing Capitalize on opportunities of Data Organic Growth and Acquisition growth, Digital India, Smart Cities Opportunities Initiatives of Government Achieving Cost Efficiencies Across Increasing Revenue and Capital Tower Portfolios Productivity 29 of 35
Slide 30: Investment Thesis
Investment Thesis Demonstrated Operational and Financial Performance Insulated from Major Concerns - Continuing Voice led Growth $-Re, Leverage, Import Dependence Operator Agnostic way to benefit Experienced Management Team from Data Growth Regulatory Environment High Standards of Corporate Favorabl
Slide 31: Appendix
Ss » 2 Bharti Infratel Limited Appendix 31 of 35
Slide 32: Bharti Infratel Overview
Bharti Infratel Overview Corporate Structure Public(1) Vodafone Idea #2 Wireless Operator(3) #3 Wireless Operator(3) 28.04% 42% 100% 71.96%(5) Bharti Infratel Indus Towers 42% 16% Aditya Bharti Airtel Birla 90,255 Towers(2) Telecom 122,044 Towers(2) #1 Wireless Operator(3) #1 Tower Company(4) #2 Tow
Slide 33: Impact of Data Growth on Tower Industry
Impact of Data Growth on Tower Industry Expansion of 3G / 4G Networks by Operators will necessitate demand for towers Propagation on higher frequency band weaker Data usage to drive co-location growth 3G/4G only sites to drive tower demand Propagation effects in different bands Tower Multipl
Slide 34: Regulatory Environment Favourable
Regulatory Environment Favourable The Cabinet Committee on Infrastructure has included “Telecommunication towers” as a infrastructure sub-sector in the master list Potential Benefits Impact Accelerated depreciation Encourages further investments in expanding the telecom infrastructure to rural areas
Slide 35: Investor Presentation
Investor Presentation March 2017 Building and Sharing Vital Infrastructure