Reliance Communications Limited · NSE:RCOM
Reliance Communications — Investor Presentation (September 2010)
43 slides from Reliance Communications's investor presentation, September 2010
Slide 1: Reliance Communications Investor Presentation
Reliance Communications Investor Presentation September 2010
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”) statements RCOM ) that are not historical in nature. nature These forward looking statements, which may include statements r
Slide 3: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 3 of 43
Slide 4: Journey so far
Reliance Communications J Journey f so far…. FY 2009 & FY 2010 Mobile 3G FY 2007 & FY 2008 CDMA & GSM Services IDC FY 2005 & FY 2006 Mobile • World’s Largest N/W • NGN Globalcom Enterprise Globalcom • 2L slots Infratel • Deepest backhaul Mobile Globalcom Enterprise Home Foundation Growth Integration
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- Globalcom chip global clients One stop shop for all large corporates and SMBs for Enterprise communications, netw
Slide 6: Strategy for focused and profitable growth
Reliance Communications St t g for Strategy f focused f d and d profitable fit bl growth g th Address mass mobility market thru’ GSM with special focus on rural distribution eless Consolidate data market leadership with high ARPU high speed datacards Wire Increased revenue from new service str
Slide 7: 3G license in 13 circles; Pan-India data leadership
Reliance Communications : Recent initiatives 3G li license in i 13 circles; i l P Pan-India I di ddata t leadership l d hi 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 2G +
Slide 8: DigiCom acquisition - Key highlights
Reliance Communications : Recent initiatives DigiCom acquisition - Key highlights RCOM acquired DigiCable, India’s No. 1 Cable TV service provider Combined entity comprising RCOM DTH and DigiCable to be named “RELIANCE DigiCom” Game changing move to usher Digital TV and ultra high speed broadb
Slide 9: Reliance DigiCom – Market position (India & Globally)
Reliance Communications : Recent initiatives Reliance DigiCom – Market position (India & Globally) India Top 5 Global Top 5 Subscriber Subscriber Rank Players Rank Players Base ase ((Mn)) Base (Mn) 1 Comcast 24 1 Reliance + Digi 11 2 DirecTV 19 2 S Sun + SCV 9 3 Hathway 8 3 Dish Network 14 Dish TV +
Slide 10: Financial Highlights
Reliance Communications Financial Highlights Key Financial Parameters (Rs. Mn) Revenue EBITDA Net Profit 229,485 93,050 60,449 221,323 81,989 54,011 190,678 78,205 46,550 144,683 57,208 31,637 107,664 24,762 4,438 FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 Consistent
Slide 11: Total Revenue and cost management
Reliance Communications C Cost management (% off revenue)… ) Margins 35.4% 34.1% 31.5% 31.9% 100% Network expenses - Increase in network cost due to 90% expansion of coverage & GSM 80% 25.6% launch 27 9% 27.9% 29 9% 29.9% 31.5% - Opex of other new businesses like Total Revenue 70% DTH, Vanco, etc
Slide 12: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 12 of 43
Slide 13: Industry outlook: India's growing mobile market
Wireless Business Industry outlook : India’s growing mobile market 650 17.7 629 17.0 Others 16 Aircel 20.0 Reliance 18.9 550 20.1 Idea 3% 7% 18% 18.9 11% 17.5 16.8 14.6 11% Airtel 50 450 15.1 TATA 22% 14 11% 17% BSNL Vodafone 350 July Aug Sept Oct Nov Dec Jan Feb Mar Apr May JuneJune 629 Mn wireless
Slide 14: 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 15: Strengths of Wireless Business
Wireless Business Strengths of Wireless Business 1 Dual technology advantage 2 Data leader (HSD / EVDO) 3 100 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 16: Unbeatable choice and value proposition
Wireless Business India’s billion people can now expect an unbeatable 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 Wireless | Infratel | Globalcom | Enterprise
Slide 17: Coverage
Wireless Business C Coverage 24,000 Towns 600,000 Villages 1 Billion Indians Voice Data VAS CDMA GSM Seamless coverage wherever you go Wireless | Infratel | Globalcom | Enterprise | Home 17 of 43
Slide 18: Customer Choice
Wireless Business C Customer Choice Ch i Mobility 113 million Happy customers Wireless Data Fixed Wireless Market leadership in all segments PCO * *CDMA … shall replicate success with nationwide GSM service Wireless | Infratel | Globalcom | Enterprise | Home 18 of 43
Slide 19: HSD/Internet on the Move
Wireless Business HSD/Internet on the Move Competitive differentiation Fastest internet broadband service of up to 3.1 31 Mbps in India’s top 62 cities Seamless handover & connectivity through CDMA g covering 1X in over 24K towns and 6 lakh villages g 90% of the Indian population Wide reach co
Slide 20: Product & Service innovations
Wireless Business Product & Service innovations Group Talk Tune Maker Simply Music Nokia Life Tools Bubbly (voice twitter) Handsets ISD Packs Mobile Net Wireless | Infratel | Globalcom | Enterprise | Home 20 of 43
Slide 21: Distribution & Reach
Wireless Business Distribution & Reach World-class design , fit out & ambience att 2,000 2 000 exclusive l i retail t il showrooms h on High streets/Malls High g qquality y reach & national ffootprint p through 5,000 distributors & 1.2 million retailers 5,000+ 5 000+ Direct & indirect outbound
Slide 22: Wireless Financial Performance
Wireless Business Fi Financial i lPPerformance f Revenue (Rs. Mn) EBITDA (Rs. Mn) 13,132 40,100 40 225 40,225 40 900 40,900 41 528 41,528 12 545 12,545 11,815 11,989 40,000 12,000 8,000 20,000 4,000 0 0 2QFY10 3QFY10 4QFY10 1QFY11 2QFY10 3QFY10 4QFY10 1QFY11 EBITDA Margin 80% 60% 40% 32.7% 31.2% 28.
Slide 23: Revenue Per Minute (RPM) trend
Wireless Business R Revenue Per P Minute Mi (RPM) trend d Change Q2'09 Q3'09 Q4'09 Q1'10 over last 4 Qtrs. Player 1 0.57 0.52 0.47 0.45 -21.1% Player 2 0.56 0.51 0.47 0.44 -21.4% RCOM 0 47 0.47 0 45 0.45 0 44 0.44 0 44 0.44 -6.4% 6 4% RCOM, the only operator which has held on to the RPM over last 4
Slide 24: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 24 of 43
Slide 25: Globalcom Business Overview
Globalcom Business B i Business O Overview i Data Voice NLD WiMAX Among Top 10 Enterprise # 1 Retail brand for # 1 NLD Spectrum Bank: foray Access Provider in the US calling India from the Infrastructure and to deliver end to end Among Top 5 Enterprise U.S. Bandwidth services broadband on
Slide 26: Globalcom Business Overview: Who we are
Globalcom Business B i Business O Overview i We are more than… Who we are… Global service delivery provider of internet, Just a cable network developer data and rich media on an all IP-enabled network Higher Revenue from Enterprise; Over 1,500 Just a wholesale bandwidth provider Enterprise c
Slide 27: Network reach
Globalcom Business N t Network k reach h Over 275,000 RKms of optic fiber cable with landing points in 30 countries Managing over 60,000 customer sites in 160 countries through 700 carrier partners FEA FA-1 FNAL FALCON Hawk Network connecting over 85% of the world’s population Wireless | Infrate
Slide 28: Diverse and extensive customer base
Globalcom Business Di Diverse and d extensive t i customer t base b Over 200 wholesale customers based on strong long term relationships with over 70% repeat Carrier orders; Particularly strong in China, Asia, the Middle East and India. Among g Top p 5 Managed g Network Service p providers (Ga
Slide 29: Globalcom Financial Performance
Globalcom Business Fi Financial i lPPerformance f Revenue (Rs. Mn) EBITDA (Rs. Mn) 25,000 22,643 6,000 5,227 19,818 20 278 20,278 20,000 18,844 18,137 4,515 4,194 4,000 3,555 15,000 3,317 10,000 2,000 5,000 0 0 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 EBITDA Margin 40% 3
Slide 30: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 30 of 43
Slide 31: Enterprise Business overview
Enterprise Business B i Business overview i Enterprise Segment Retail Segment Data Connectivity Solutions Plane Old Telephony Services (POTS) Voice Solutions Broadband Internet Data Center based Services Access (BIA) Ser es Enterprise Serves Enterprise, SME and Retail ccustomers stomers fo
Slide 32: Market leadership
Enterprise Business Market leadership Segments where we lead the market Largest share in the MPLS-VPN market Largest share of the Centrex market Market leader in Data Centers – More than 50% market share Our customer portfolio 850 of top 1000 Enterprises in India 10,000+ Small & Medium Bus
Slide 33: IDC: Largest in India with >50% market share
Enterprise Business IDC: Largest in India with >50% market share Nine data centres with level 3+ accreditation – more than 400,000 400 000 sq ft of facilities space Hosting >20,000 systems and >1400 terabyte of information Geographic redundancy Wide & complex application hosted - Core Bankin
Slide 34: 850 of Top 1,000 Indian enterprises are our customers
Enterprise Business 850 of Top 1,000 1 000 Indian enterprises are our customers FMCG Segment Services Segment Telecom Operators IT/ ITES Segment BFSI Segment Media Segment Winning >50% of new business generated in the segment Wireless | Infratel | Globalcom | Enterprise | Home 34 of 43
Slide 35: Enterprise Financial Performance
Enterprise Business Fi Financial i lPPerformance f Revenue (Rs. Mn) EBITDA (Rs. Mn) 7,700 8,000 4,000 6,842 6,8 7,045 6,798 6 763 6,763 3,199 2,994 6,000 3,000 2,755 2,526 2,477 4,000 2,000 2,000 1,000 0 0 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 EBITDA Margin 60% 43.8%
Slide 36: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 36 of 43
Slide 37: Indian Cable & Satellite Market
Home Business Indian Cable & Satellite Market 180 18 160 20 22 140 26 120 33 41 100 110 47 Cable Dark 108 C&S 80 105 DTH 98 60 90 83 40 70 20 45 37 28 21 12 0 2 5 2007 2008 2009 2010 2011E 2012E 2013E Source : Industry y Estimates DTH penetration at 14% of TV homes; gaining momentum Wireless | Infra
Slide 38: Reliance Big TV (DTH)
Home Business R li Reliance Bi Big TV (DTH) Pioneering g HD experience p in India Pioneering DVR – “Watch when you want” Key y service differentiators ff - More channel choice - Pure Digital viewing - 32 Cinema channels - Easy program guide - Quick channel select - Interactive applications (iN
Slide 39: BIG TV Services: Complete suite of services
Home Business BIG 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 / V
Slide 40: The 4 Pillars of Growth
Home Business Th 4 Pillars The Pill off Growth G h Content Reach and service 200+ channels 6,500 towns 32 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,
Slide 41: Contents
Contents Reliance Communications – an integrated telco Wireless Enterprise Globalcom Home Key takeaways Wireless | Infratel | Globalcom | Enterprise | Home 41 of 43
Slide 42: Drivers for future growth and shareholder value
Looking ahead Drivers for future growth and shareholder value Drivers Impact Financials at inflection point as GSM momentum Increase revenue scales up generating ability RCOM not only reliant on wireless business for future growth; massive opportunity in newer Large pipeline of segments includin
Slide 43: Thank you
RELIANCE Anil Dhirubhai Ambani Group Thank you
Reliance Communications — Investor Presentation (September 2010) on 6ix