Reliance Communications Limited · NSE:RCOM
Reliance Communications — Investor Presentation (March 2011)
39 slides from Reliance Communications's investor presentation, March 2011
Slide 1: Reliance Communications Investor Presentation
Reliance Communications Investor Presentation March, 2011
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 p Global Enterprise Home Ke takea Key takeaways a s Confidential 3 of 39
Slide 4: Journey so far
Reliance Communications FY 2011 Journey so far far…. FY 2009 & FY 2010 3G Mobile M bil FY 2007 & FY 2008 CDMA & GSM Services FY 2005 & FY 2006 IDC Mobile • World’s Largest N/W • NGN Enterprise • 2L slots • Deepest backhaul Infratel Mobile Enterprise IPTV Foundation Growth Integration Evolution path
Slide 5: Current position of our businesses
Reliance Communications Current position of our businesses Wireless #2 in India, #4 globally (single country), dual technology Largest global private submarine cable network, blue-chip Globalcom global clients One stop shop for all large corporates and SMBs for Enterprise communications, netwo
Slide 6: Strategy for focused and profitable growth
Reliance Communications Strategy for focused and profitable growth Address mass mobility market thru’ GSM with special focus on rural distribution eless Consolidate data market leadership with high ARPU 3G services & high speed datacards Wire Increased revenue from new service streams (share o
Slide 7: Financial Highlights
Reliance Communications Financial Highlights Key Financial Parameters (Rs. Mn) Revenue EBITDA Net Profit Consistent & substantial increase in profitability Confidential 7 of 39
Slide 8: Cost management (% of revenue)
Reliance Communications Cost management (% of revenue) revenue)… Margins 31.5% 31.9% 32.4% 33.3% 100% Network expenses - Decrease in network cost due to 90% savings in Power & Fuel, 80% 25.6% 27.0% 25.0% Consumption of stores & spares and 29 9% 29.9% maintenance i t 70% al Revenue 60% SG&A expen
Slide 9: Contents
Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeaways Confidential 9 of 39
Slide 10: Industry outlook: India's growing mobile market
Wireless Business Industry outlook : India’s India s growing mobile market India, the world’s fastest growing & second biggest mobile market, has fifteen telecom service providers. Industry Subscriber Net Additions Customer Market Share (December, (December 2010) MTNL MTS 747 1% 1% 23 Aircel Relianc
Slide 11: Indian telecom: Fast changing landscape
Wireless Business Indian telecom : Fast changing landscape Operators Hyper competition - Number of players increased from 7 to 15 in last one year Price Wars Multiple product offerings with innovation on price and tariff cuts only Call Rates 2007 2010 Intense Price cuts reduced the call rate from Rs
Slide 12: Strengths of Wireless Business
Wireless Business Strengths of Wireless Business 1 Dual technology advantage 2 Data leader (HSD / EVDO) 3 125 Million+ customer base 3G License winner in 13 circles 4 (All 900 Mhz circles covered) 5 Integrated Telco with segmented play All this with only 7 years of existence in industry as compared
Slide 13: 3G license in 13 circles; Pan-India data leadership
Wireless Business 3G license in 13 circles; Pan Pan-India India data leadership Won 13 circles with a spend of Rs. 8,585cr Geographical mix of top 3 metros, 4 “B” circles & 6 “C” circles Marginal capex for 3G upgrade on our EDGE GSM network 2G Circles Ci l 2G + 3G Circles Delhi & Mumbai Nationwide E
Slide 14: Launched 3G within 100 days of receiving the spectrum
Wireless Business Launched 3G within 100 days of receiving the spectrum 3G services kick off in 3 key metros of Mumbai, Delhi & Kolkata and city of Chandigarh on 13th December, 2010 Currently, 3G services are available in 25 cities and soon will be available in 140 cities Confidential 14 of 39
Slide 15: Unbeatable choice and value proposition
Wireless Business India s billion people can now expect an unbeatable India’s choice and value proposition across…. 1. Coverage 2. Customer choice 3. HSD/Internet on the move 4. Product & Service innovations 5. Distribution & Reach Unmatched customer proposition Confidential 15 of 39
Slide 16: Coverage
Wireless Business Coverage 24,000 Towns 600,000 Villages 1 Billion Indians Voice Data VAS CDMA GSM Seamless coverage wherever you go Confidential 16 of 39
Slide 17: Customer Choice
Wireless Business Customer Choice Mobile Handheld Dongles 3G HSPA CDMA HSD Voice CDMA GSM Data Video Wide options for Voice, Data & Video across CDMA & GSM platforms Confidential 17 of 39
Slide 18: HSD/Internet on the Move
Wireless Business HSD/Internet on the Move Competitive differentiation Fastest internet broadband service in India’s top 500+ cities Seamless handover & connectivity through CDMA 1X in over 24K towns and 6 lakh villages covering 90% of the Indian population Wide reach compared to limited reach
Slide 19: Product & Service innovations
Wireless Business Product & Service innovations Group Talk Tune Maker Simply Music Nokia Life Tools Bubbly (voice twitter) App Store Location Based Services WAP Portal Confidential 19 of 39
Slide 20: Distribution & Reach
Wireless Business Distribution & Reach World-class design , fit out & ambience at 2 000 exclusive retail showrooms on High 2,000 streets/Malls High quality reach & national footprint through 5,000 distributors & 1.2 million retailers 5 000+ Direct & indirect outbound sales 5,000+ force to cate
Slide 21: Financial Performance
Wireless Business Financial Performance Revenue (Rs. Mn) EBITDA (Rs. Mn) 40 900 40,900 41 528 41,528 41 613 41,613 40,644 11,989 12,101 11,815 11,792 40,000 12,000 8,000 20,000 4,000 , 0 0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY10 1QFY11 2QFY11 3QFY11 EBITDA Margin 80% 60% 40% 28.9% 28.9% % 29.0% 29 1% 29.
Slide 22: Revenue Per Minute (RPM) trend
Wireless Business Revenue Per Minute (RPM) trend Change 2Q‘10 3Q‘10 4Q‘10 1Q'11 2Q'11 3Q’11 over last 6 Qtrs. Player 1 0.56 0.52 0.47 0.45 0.44 0.44 -21.4% Player 2 0.56 0.51 0.47 0.44 0.42 0.42 -25.0% RCOM 0.47 0.45 0.44 0.44 0.44 0.44 -6.4% 0.60 Revenue Per Minute (Rs.) 0.55 0.50 0.45 0.40 2QFY10
Slide 23: Contents
Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeaways Confidential 23 of 39
Slide 24: Global Enterprise Business Overview
Global Enterprise Business Overview Global Enterprise Business Carrier Enterprise p Consumer Among Top 15 largest Leading Enterprise services Offer virtual international long distance provider in India international calling carriers with over 14 billion Among the Top 6 Leader-board of servic
Slide 25: Key Highlights
Global Enterprise Business Key Highlights 1 Infrastructure Geared for exponential growth of application and content traffic 2 Customers Diverse base includes the largest data users in developed and emerging markets 3 Products & Services Complete suite of products to capture growth across the value c
Slide 26: Network reach
Global Enterprise Business Network reach Own 277,000 RKms of optic fiber cable with landing points in 30 countries & world’s largest private undersea cable system spanning 65,000 Kilometers Manage over 60,000 customer sites in 163 countries through 700 carrier partners This cable system is sea
Slide 27: Biggest data center player in India
Global Enterprise Business Biggest data center player in India Nine data centres with level 3+ accreditation – more than 450,000 sq ft of facilities space Geographic redundancy Wide & complex application hosted Core Banking, ATM/ Internet Banking Complex ERP/ SAP Applications Complex Int
Slide 28: Diverse and extensive customer base
Global Enterprise Business Diverse and extensive customer base Over 200 wholesale customers based on strong long term relationships with over 70% repeat orders; Carrier Particularly strong in China, Asia, the Middle East and India. Among Top 5 Managed Network Service providers with over 200 gl
Slide 29: Product Landscape – Enterprise Market
Global Enterprise Business Product Landscape – Enterprise Market Voice Wireless Enterprise NLD/ILD IDC Collaboration Broadband • Landline • Mobile Data • Reliance • Hosting • Video Internet prepaid p p and • MPLS VPN India Call Conferencing g • Prepaid and postpaid • Fixed • Storage & postpaid BB •
Slide 30: Financial Performance – Global Business
Global Business Financial Performance Revenue (Rs. Mn) EBITDA (Rs. Mn) 25,000 20,278 3,966 18,391 19,233 20,000 18,137 4,000 3,555 3,317 3,393 15,000 10,000 2,000 5,000 0 0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY10 1QFY11 2QFY11 3QFY11 EBITDA Margin 40% 30% 20% 18.3% 20.6% 17.5% 18.4% 10% 0% 4QFY10 1QFY11
Slide 31: Financial Performance – Enterprise Domestic
Enterprise Business: Domestic Financial Performance Revenue (Rs. Mn) EBITDA (Rs. Mn) 8,000 3,000 6 798 6,798 6 763 6,763 6 617 6,617 2 526 2,526 2 477 2,477 2 481 2,481 6,184 2,267 6,000 2,000 4,000 1,000 2 000 2,000 0 0 4QFY10 1QFY11 2QFY11 3QFY11 4QFY10 1QFY11 2QFY11 3QFY11 EBITDA Margin 60% 37.2%
Slide 32: Contents
Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeaways Confidential 32 of 39
Slide 33: Indian Cable & Satellite Market
Home Business Indian Cable & Satellite Market Source : Industry y Estimates DTH penetration at ~20%% of TV homes; gaining momentum Confidential 33 of 39
Slide 34: Reliance Digital TV (DTH)
Home Business Reliance Digital TV (DTH) Pioneering HD experience in India Pioneering DVR – “Watch when you want” Key service differentiators More channel choice Pure Digital viewing 32 Cinema channels Easy program guide Quick channel select Interactive applications (iNews, iGames,
Slide 35: Digital TV Services: Complete suite of services
Home Business Digital 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
Slide 36: The Pillars of Growth
Home Business The 4 Pillars of Growth Content Reach and service 250+ channels 6,500 towns 20+ exclusive movie channels 2,000+ exclusive Reliance in English, Hindi and other retail stores regional languages 24x7, 11 language Interactive features – Games, customer service News, Cricket, St
Slide 37: Contents
Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeaways Confidential 37 of 39
Slide 38: Drivers for future growth and shareholder value
Looking ahead Drivers for future growth and shareholder value Drivers Impact Financials at inflection point as GSM and 3G Increase revenue momentum scales up generating ability RCOM not only reliant on wireless business for ffuture t growth; th massive i opportunity t it ini newer Large pipeline
Slide 39: Thank you
RELIANCE Thank you
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