Reliance Communications Limited · NSE:RCOM
Reliance Communications — Investor Presentation (November 2015)
40 slides from Reliance Communications's investor presentation, November 2015
Slide 1: Investors' Presentation
Investors‟ Presentation November, 2015
Slide 2: Reliance Communications: An Overview
Reliance Communications : An Overview Leading integrated telecommunications operator in India with presence across wireless, enterprise, broadband, passive infrastructure, and DTH Leading global data Only pan-India GSM & CDMA communications business operator with long weighted under GCX, with sub-se
Slide 3: Contents
Contents Indian Telecom Scenario RCOM - Strategy for Growth o Operations o Financial Update Deleveraging and Asset Monetisation Investment Highlights
Slide 4: Data is the Next Big Opportunity
Data is the Next Big Opportunity Data: The key growth driver Indian Telecom - Moving from Voice to Data Communication Information The Past Present Future SMS Social Networking Mobile Broadband Radio Mobile Apps Convergence: M2M CRBT Mobile Gaming M-commerce Voice Calling Mobile
Slide 5: Regulatory Update
Regulatory Update Foreign Direct Investment is allowed up to 49% under the automatic FDI policy route and any equity infusion beyond 49% is to be made with the prior approval of the Foreign Investment Promotion Board Mergers only up to 50% of the market share of the resultant entity is allowed M
Slide 6: Regulatory Update contd.
Regulatory Update contd. All spectrum required for the Unified Access Services License has Spectrum been delinked from the license and spectrum is now being allotted Allocation through a transparent auction process Allowed in a Licensed Service Area (LSA), where both the licensees are having spe
Slide 7: Contents
Contents Indian Telecom Scenario RCOM - Strategy for Growth o Operations o Financial Update Deleveraging and Asset Monetisation Investment Highlights
Slide 8: Journey So far
Journey So far RCOM: A Multi-Technology Integrated Telecom Operator 1997 2009 2011 2014 2015-16 9 GSM 14 GSM 3G in 13 RevB LTE circles circles circles Services capabilities / launched launched launched launched Launch 2003 Pan India CDMA launch 30% >70% GSM + Data Growth 70% <30% 2009 2015 Revenue U
Slide 9: Strong Spectrum Assets & Robust Backhaul Network
Strong Spectrum Assets & Robust Backhaul Network Supporting and Enhancing Our Domestic Data Leadership Position Service Areas Spectrum Holding (MHz*) Leading network of backhaul optical fiber 2G CDMA GSM 3G LTE CDMA 2G 3G BWA Optical Fiber Layout for Operators (Kms) GSM Network Provider Length of Fi
Slide 10: High Quality Telecom Infra Assets
High Quality Telecom Infra Assets Tower Assets: Overview 43,379 towers, located in 22 circles in India and supported by an OFC network of over 190,000 Kms Young tower portfolio, with towers spread across all 22 circles High quality portfolio capable of housing 4 tenants; can be enhanced to 7 t
Slide 11: RCOM's Renewal Circles – Business Continuity Strategy
RCOM‟s Renewal Circles – Business Continuity Strategy Pre-auction Post-Auction 800 900 1800 2100 800 900 1800 2100 MHz MHz MHz MHz MHz MHz MHz MHz Business Continuity and Growth Plans Assam 2.5 6.2 - 5.0 5.0 - 5.0 ICR Arrangements, Shift of customers to 3G Bihar 5.0 6.2 - 5.0 5.0 - 5.0 ICR Arrangeme
Slide 12: RCOM's Spectrum Holding Post-Auction
RCOM‟s Spectrum Holding Post-Auction Cat Circle 800 MHz 900 MHz 1800 MHz 2100 MHz M Delhi 5.00 - 4.40 5.00 Acquisition of substantial spectrum M Kolkata 6.25 - 6.20 5.00 in 800/850 band - to augment Rev M Mumbai 5.00 - 5.00 5.00 B data strategy and future LTE A Andhra Pradesh 5.00 - 4.40 - plans w
Slide 13: 850 MHz Band - A Powerful LTE Spectrum
850 MHz Band - A Powerful LTE Spectrum Our Spectrum Holding in this band – Strategic Advantage in Data Leadership 850 MHz spectrum band is a powerful LTE spectrum. Global commercial services are already being provided by many reputed operators in various markets such as : Australia Philippines
Slide 14: Dominant Footprint of Data Capabilities
Dominant Footprint of Data Capabilities GSM – 3G CDMA – Rev B and Rev A LTE Ready Spectrum Capability Delhi Delhi Kolkat a Kolkata Pune Mumbai Mumbai Hyderabad Bengaluru Own Chennai Rev A/B ICR Rev A 3G coverage in 18 circles 7 metros on Rev B (14.7 Mbps) Pan-India (except Rajasthan) 5 MHz 3
Slide 15: Wireless Business Strategy
Wireless Business Strategy Contract / SIM / Connection Annuity like Business Business (Non-proprietary / Open Market Device Ecosystem) (Proprietary / Dedicated Devices) Unbundled Bundled Slide 15
Slide 16: GSM Voice Strategy: Market Portfolio Approach
GSM Voice Strategy: Market Portfolio Approach National Circles Hot Micro Markets 3 Clusters of Circles Participate & Grow 10 Circles Protect & Grow Disrupt & Grow 4 Circles 8 Circles Protect Participate Disrupt US$ 8bn Circles Del, Bh, Or, Asm, NE, TN, AP, KK, US$ US$ annual MP, WB Kol, Pb, Har, Ker
Slide 17: Bundled Sales (CDMA): The Key Pillars
Bundled Sales (CDMA): The Key Pillars Data Bundled Smart Device Dominance Sales Segmentation Ecosystem 1 2 3 4 Smart Smart Internet Large & Fastest Smart Bundled Segmentation & Device Ecosystem Data Network Products Products Bundled Offers & Tariff Universal Mode Internet Target Segmented Devices Pr
Slide 18: Bundled Sales (CDMA) contd.: WiPod
Bundled Sales(CDMA) contd. Data Coverage Advantage Into Play: WiFi WiPod – The WiFi Product To Capture Data From Over 180 Mn Internet Devices Slide 18
Slide 19: Focus on new Partnerships
Focus on new Partnerships Infrastructure Sharing Internet for All Internet of Things (IoT) Cloud Portfolio Establishing partnerships to consolidate dominant data position across businesses Slide 19
Slide 20: Extensive Distribution and Service Network
Extensive Distribution and Service Network Extensive Mass Distribution and Service Network One tier reach in urban towns (3,500 Distributors and 700k Retailers) Two tier format ( Distributor/sub-Distributor and Retailer) mainly for Distribution rural areas Over 1,000 exclusive full service fra
Slide 21: Future Expansion at Least Cost
Future Expansion at Least Cost Minimal Capex Due to ICR & Jio Reciprocity 1) Intra-Circle Roaming arrangements: “Test the waters” Agreement to share infrastructure in select areas Typical tenure 12 – 18 months De-risk Access to 10,000+ sites No capex growth “Pay as you use” model 2) Reciproc
Slide 22: Global Business: An Overview
Global Business: An Overview World‟s largest private submarine cable system Carrier owner with 68,000+ km of sub-sea fiber Serving top 290 carriers of the world Top 5 Managed Network Service provider globally Global Leading Ethernet services provider in the U.S. Enterprise Data connectivit
Slide 23: Strong Brand Recognition
Strong Brand Recognition RCOM- Among top 10 Most Reputed Indian Companies Reliance -14th Most Exciting Brand RCOM among top 10 most reputed Indian Companies & ranked 14th in most exciting brands Slide 23
Slide 24: SSTL Merger with RCOM
SSTL Merger with RCOM RCOM announced first consolidation in Indian telecom sector Wireless business of Sistema Shyam Teleservices Ltd. (SSTL) carried on in India under MTS brand to be demerged into RCOM RCOM to acquire approx. 9 mn customers and revenues of ~Rs 1,500 crore annually RCOM to a
Slide 25: SSTL Merger with RCOM Contd...
SSTL Merger with RCOM Contd... Combined Spectrum Pool (800 – 850 MHz) RCOM New MTS Spectrum RCOM Legacy Total Spectrum Holding No. Category Circles Acquired (MHz) Spectrum (MHz) (MHz) Spectrum (MHz) 1 Metro Delhi 3.75 5.00 0 8.75 2 Metro Kolkata 3.75 3.75 1.25 8.75 3 A Circle Gujarat 3.75 3.75 2.50
Slide 26: Spectrum Sharing/Trading – Positive for RCOM
Spectrum Sharing/Trading – Positive for RCOM The Sharing and Trading policies have set the stage to extend our partnership with Jio to the next level of co-operation Will help in faster rolling out 4G services in the most potent band of 800 MHz by pooling spectrum with Jio Sharing/Trading will help
Slide 27: Financial Snapshot – Segment Reporting
Financial Snapshot – Segment Reporting India Operations US$ mn Q2 FY15 Q1 FY16 Q2 FY16 Q-o-Q % Y-o-Y% Revenue 714 730 717 -1.9% 0.4% Voice 523 525 510 -2.7% -2.5% Non-voice 168 188 190 1.3% 13.3% EBITDA 253 258 245 -5.3% -3.4% Margin % 35.5% 35.4% 34.2% Global Operations US$ mn Q2 FY15 Q1 FY16 Q2 FY
Slide 28: KPIs
KPIs Voice Voice KPIs Q2 FY15 Q1 FY16 Q2 FY16 Q-o-Q % Y-o-Y % ARPU (INR) 137 140 138 -1.4% 0.7% RPM (INR) 0.444 0.445 0.448 0.7% 0.9% Total MoU (Bn. Min.) 102.1 105 102.5 -2.4% 0.4% Voice Usage/ Cust/ Month (Min.) 307 316 307 -2.8% 0.0% Total Customer Base (Mn.) 111.3 111.1 111.6 0.5% 0.3% Churn (%)
Slide 29: Data Leadership
Data Leadership RCOM - Leading player in the Wireless Data Market Non-voice as % of Total Revenue No. of 3G Active Subscribers (mn) * 27.1% 27.4% 27.9% 24.3% 23.9 20.2% 21.1% 19.1 19.6 15.1 15.4 10.5 2QFY15 Rcom Airtel Idea 2QFY16 2QFY15 Rcom Airtel Idea 2QFY16 Total Data Traffic on Network (mn MBs)
Slide 30: Contents
Contents Indian Telecom Scenario RCOM - Strategy for Growth o Operations o Financial Update Deleveraging and Asset Monetisation Investment Highlights
Slide 31: Key Deleveraging Step – QIP - Completed
Key Deleveraging Step – QIP - Completed Largest Corporate Qualified Institutional Placement (QIP) in India - INR 48bn - Solid investor confidence in RCOM’s long-term business strategy Shareholding Pattern Promoters invested INR13bn (US$213m) through preferential allotment of warrants alongside QIP
Slide 32: Asset Optimization
Asset Optimization Comprehensive Business Co-operation Framework Between RCOM & Reliance Jio Tower Sharing Contract Nation-wide tower infrastructure sharing agreement with R Jio Duration: 15 years, till 2030 Upto ~43,000 towers to be shared RCOM to have reciprocal access to Jio tower infrastru
Slide 33: Deleveraging Initiatives: Potential Stake Sale in RITL
Deleveraging Initiatives: Potential Stake Sale in RITL Potential Deal Tower Companies‟ multiples at historically higher levels Tower industry very positive in view of the expected growth in tenancies due to data-led business growth Bidders engaged in advanced DD process Attractive asset due
Slide 34: Deleveraging Initiatives: Potential Stake Sale in GCX
Deleveraging Initiatives: Potential Stake Sale in GCX Potential Deal Multiple options being pursued simultaneously In discussions with strategic and financial investors Enterprise valuation should be attractive as per recent multiples One-step or two-step sale process Expected timeline: FY
Slide 35: Deleveraging Initiatives: Real Estate
Deleveraging Initiatives: Real Estate Phase-I Residential flats at Navi Mumbai NRI Complex – one of the most prestigious housing projects in Navi Mumbai; 46 spacious Blocks and over 1,500 Houses RCOM owns 2, 3 & 4 BHK flats including duplex and penthouses Prime property at Connaught Place, N
Slide 36: Contents
Contents Indian Telecom Scenario RCOM - Strategy for Growth o Operations o Financial Update Deleveraging and Asset Monetisation Investment Highlights
Slide 37: Higher Upsides & Lower Future Risks
Higher Upsides & Lower Future Risks Potential Future Upsides Status Potential Future Risks Impact on RCOM Data Leadership Capability Ready Regulatory Spectrum Payouts Low Intercity and Intracity Fiber Deal Done Capex Intensity Low with Jio Tower Tenancy Deal with Jio Done Business Operation Downside
Slide 38: Key Investment Highlights
Key Investment Highlights Future ready spectrum portfolio Future expansion at least RCOM‟s Lower regulatory cash cost Value outflow Proposition Arrangement / co-operation and Focused plans for Deleveraging reciprocity with Jio to assist and Asset monetization revenue & margin growth Immense Sectoral
Slide 39: Disclaimer
Disclaimer This presentation has been prepared by Reliance Communications Limited (the “Company”) solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distributed or d
Slide 40: Thank You
RELIANCE Thank You
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