Bharti Airtel Limited · NSE:BHARTIARTL
Bharti Airtel — Bharti Airtel Africa Analyst Day 2017
72 slides from Bharti Airtel's conference presentation, Dec 8, 2017
Slide 1: Exchange filing: participation at Africa Analyst Day
bharti December 08, 2017 National Stock Exchange of India Limited Exchange Plaza, C-1 Block G Bandra Kurla Complex, Bandra (E) Mumbai — 400051 : BSE Limited Phiroze Jeejeebhoy Towers | Dalal Street | Mumbai — 400001 | Ref: Bharti Airtel Limited (532454 / BHARTIARTL) Sub: Participation at the Investo
Slide 2: Airtel Africa Day
AIRTEL Africa Day 7th December 2017 1
Slide 3: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 4: Index
Index Airtel journey in Africa, 2010 - 16 Africa learnings What has happened in Africa in last 6 quarters? What did we do? Financial performance Way ahead 3
Slide 5: Airtel journey in Africa, 2010 - 2016
Airtel journey SECTION in Africa, 2010 - 2016 HEADER GOES HERE 4
Slide 6: A lot has happened in Africa
A lot has happened in Africa Acq. Zain Africa Acq. Warid in 15 operations; Congo B & Uganda Acq. Yu telecom’s Acq. Rwandatel’s & Telecom customers in GSM license in Seychelles Kenya Rwanda 2010 2012 2013 2014 2015 2016 Airtel Warid Tower Sale – 10 OPCOs RMS % RMS % Eaton GH, UG, KE, BF Uganda 23.3%
Slide 7: We believed we could replicate the India success story
We believed we could replicate the India success story Aggressive network expansion 9000+ sites added in 6 yrs 3G roll out in all OPCOs Pricing drop to fuel elasticity, like in India Replicated India outsourcing model e.g., Call center, IT, Managed services In-country merger Uganda, Congo B, Kenya 6
Slide 8: Financial performance
Financial performance 4,000 3,364 3,448 3,500 3,116 3,106 3,000 2,819 30.0% 2,500 2,363 GR 25.0% 2,000 EBITDA % 24.9% 24.4% 20.0% 23.3% 23.9% 1,500 21.4% 15.0% 19.3% 1,000 10.0% 500 5.0% 0.0% - FY11 FY12 FY13 FY14 FY15 FY16 7 Note: GR in $ mn & constant currency (Mar’2016), EBITDA margin in %
Slide 9: Africa learnings
Africa learnings S ECTION HEADER GOES HERE 8
Slide 10: Learnings: wide range of GDP per capita
Learnings Population GDP GDP per capita Country (mn) ($bn) (PPP) Wide range of GDP per Capita, across Countries DRC 79 35 742 Niger 21 7.5 907 Malawi 18 5.4 1,084 Madagascar 25 10 1,396 Uganda 42 26 1,714 Rwanda 11 8 1774 Chad 14 10 1,846 Tanzania 50 47 2,583 Kenya 49 71 2925 Zambia 17 20 3,636 Ghan
Slide 11: Learnings: vast geography with high urbanization
Learnings Population Population Area Urbanization Country density (mn) (sq km) % Wide range of GDP per Capita, across Countries (person/sq km) Seychelles 0.1 455 206 54% Gabon 2 267,667 8 87% Vast geography with high urbanization Congo B 5 342,000 15 65% Rwanda 11 26,338 483 29% Chad 14 1,284,000 11
Slide 12: Learnings: market infrastructure
Learnings Wide range of GDP per Capita, across Countries Vast geography with high urbanization Market infrastructure Few large businesses control the market Low capital availability Common distributors/wholesalers Fast evolving into modern trade High cost of infrastructure 9.3 Source: tradingeconomi
Slide 13: Africa Telecom: scale is small, moderate competition
Africa Telecom Market size Key Telecom Airtel RMS % Country (Mn $) operators (2016) Nigeria 7,116 6 ~20% Scale is small, with moderate competition intensity Kenya 2,071 3 <10% Ghana 1,151 5 10-20% DRC 1,125 6 20-30% Tanzania 1,090 5 20-30% Uganda 697 5 30-40% Congo B 438 3 >40% Zambia 415 3 >40% Gab
Slide 14: High on-net minutes and dual SIM usage
Africa Telecom Local IUC rate Dual SIM Country On-net % ($ cents) penetration % Rwanda 2.7 >80% 79% Scale is small, with moderate competition intensity Uganda 4.0 >80% 64% Chad 11.0 >80% 48% Zambia 1.3 >80% 56% Madagascar 4.3 >80% 40% High on-net minutes & dual SIM usage Malawi 4.0 >80% 43% DRC 3.4
Slide 15: High site OPEX
Africa Telecom Scale is small, with moderate competition intensity High on-net minutes & dual SIM usage High site OPEX, ranging from 30k - 75k USD p.a. per site More spectrum, high OPEX per site 10.3 In Mar’16 Constant Currency
Slide 16: Africa Airtel - 2016
Africa Airtel - 2016 Airtel money – great potential but inadequate distribution High data prices & low penetration High revenue per site, wide disparity in spread High cost structure but scope to optimize operational design 11
Slide 17: What has happened in Africa in last 6 Quarters?
What has happened in Africa in last 6 Quarters? 12
Slide 18: GPS
GPS Win through Win with Win with Win with more from Win with Distribution Network right cost Existing People Excellence Excellence model Customers Key Position Airtel as the Smartphone Network Build an enabling IT infrastructure and support Enablers Leverage legal and regulatory frameworks to suppo
Slide 19: Win with Distribution Excellence
Win with Distribution Excellence Build alternate channels for SIM sale/ Money Freelancers Exclusive mini shops, kiosks Increase KYC locations through simplified KYC app - BYOD Disciplined field working 14 18
Slide 20: Win through more from existing customers
Win through more from Existing customers VRPM 1.49 1.47 1.49 Ease price war 1.46 1.39 Increase bundle sales Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 DRPM Separate voice & data bundles, for enhanced ARPU 0.45 0.36 0.35 0.33 0.28 Simplified access to USSD Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 KYC, SIM SWAP failure reduc
Slide 21: Win with Network Excellence
Win with Network Excellence OPCO U900 LTE Uganda Zambia U 900 Malawi Madagascar Gabon LTE Seychelles Kenya Congo B Planned Chad Planned Radio frequency planning & optimization Tanzania - Niger Planned Planned Rwanda Planned - Improved NW KPIs through operational rig
Slide 22: Win with right cost model
Win with right cost model Recharge margin correction in some OPCOs DRC Tanzania SIM/ RCV cost reduction MW Lusaka P & L focus for each retail store Zimbabwe Logistics, Warehousing revamped Bandwidth: Flow redesign & optimized planning Re-scope fuel distribution & managed services Rightsizing of site
Slide 23: Win with People
Win with People Delayered sales structure HQ functional ownership & collaboration HQ transition Governance SMEs Rigorous monthly planning meeting with each OPCO Organizational re-structuring in some OPCOs 18 22
Slide 24: Financial performance
Financial performance SECTION HEADER GOES HERE 19
Slide 25: Business performance
Business performance REC Base (mn) Mins (bn) 81.9 39.6 80.4 80.1 80.0 36.6 35.9 78.1 35.8 76.3 75.8 33.8 34.2 34.0 75.4 33.5 74.7 32.6 72.6 31.5 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Data ARPU 3.36 3.33 3.31 3.31 3.26
Slide 26: Financial performance
Financial performance GR EBITDA 400 32% 35% 782 26% 28% 775 350 30% 23% 24% 762 300 19% 21% 25% 17% 18% 18% 251 746 749 20% 744 250 206 738 736 186 192 15% 732 200 176 132 140 134 151 10% 717 150 123 5% 100 0% 50 -5% - -10% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 16 Q2 16 Q3 1
Slide 27: Portfolio health – EBITDA %
Portfolio health – EBITDA % Period <20% 20-30% 30-40% >40% FY’ 16 8 4 3 0 Q2’18 4 4 2 5 TZ, KE, GH, RW MG, DRC, TD, CG NG, SC ML, UG, ZM, NE, GA 22 26
Slide 28: Opcowise Status
Opcowise Status: Key Our Market size Key Country Telecom Airtel RMS % EBITDA range Position (mn $) competitors operators Uganda 5 2 699 >40% MTN >40% Zambia 3 1 479 >40% MTN >40% Gabon 4 2 348 >40% Maroc >40% Niger 4 1 329 >40% Orange >40% Malawi 4 1 222 >40% TNM >40% Congo B 3 2 375 >40% MTN 30-40%
Slide 29: Airtel Africa today
Airtel Africa today 14 OPCO Operation Airtel Operation Sold to Orange JV with Millicom 24 28
Slide 30: Way ahead
Way ahead SECTION HEADER GOES HERE 25
Slide 31: Way ahead - Opportunities: mobile penetration
Way ahead - Opportunities Unique mobile Population Covered Country penetration (mn) population Mobile penetration & population covered %** Nigeria 186 84% 45% DRC 79 64% 26% Tanzania 50 78% 42% Kenya 49 77% 59% Uganda 42 77% 41% Madagascar 25 34% 23% Niger 21 38% 26% Malawi 18 70% 26% Zambia 17 79%
Slide 32: Way ahead - Opportunities: abundant spectrum
Way ahead - Opportunities Frequency Band (MHz) OPCO Mobile penetration & population covered 800 900 1800 2100 2600 2300 Total Seychelles 10.0 12.0 20.0 20.0 - - 62.0 Gabon 10.0 8.0 14.0 15.0 20.0 - 67.0 Abundant spectrum for high throughput/site Congo B - 11.8 15.0 15.0 - - 41.8 Malawi - 11.6 19.8 1
Slide 33: Way ahead - Opportunities: data
Way ahead - Opportunities 3G Handset Country Data rev % Penetration % Mobile penetration & population covered Zambia 31% >20% Uganda 31% >20% Seychelles 15% >20% Abundant spectrum for high throughput/site Rwanda 11% >20% Kenya 13% >20% DRC 24% <20% Data: 3G handsets & Revenue contribution Malawi 15%
Slide 34: Way ahead - Opportunities: mobile money potential
Way ahead - Opportunities Banking Max. branches Unique SIM Country penetration % by largest bank* penetration %** Mobile penetration & population covered Niger 3% 16 26% Madagascar 5% 89 23% Chad 7% 14 30% Abundant spectrum for high throughput/site DRC 10% 90 26% Malawi 15% 30 26% Congo B 15% 16 58%
Slide 35: Potential for profitable growth
Way ahead - Opportunities Market Key Telecom Our Airtel EBITDA Country size operators Position RMS % range Mobile penetration & population covered (mn $) Uganda 5 2 699 >40% >40% Zambia 3 1 479 >40% >40% Abundant spectrum for high throughput/site Gabon 4 2 348 >40% >40% Niger 4 1 329 >40% >40% Malaw
Slide 36: Thank you
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Slide 37: U900
U90 U900
Slide 38: Disclaimer
Disclaimer The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context
Slide 39: Bharti Airtel Africa Day, Kampala, Uganda
Bharti Airtel Africa Day 08 December 2017 Kampala, Uganda 3
Slide 40: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 4
Slide 41: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 5
Slide 42: Bharti Airtel In Uganda
Bharti Airtel In Uganda 1995 : Celtel Uganda – 1st Telco in Uganda 2007 : Celtel Uganda changed to Zain 2010 : Airtel launched in Uganda 2013 : Successful acquisition of Warid 6
Slide 43: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 7
Slide 44: Uganda – Country profile
Uganda – Country profile Political: Government: Presidential Republic Area: 241,038 sq km Administration : 123 Districts Demographics: Population: 41.5 Mn Median Age: 15.7 years Growth Rate: 3.04%a 0-14 years (48.3%), 15-64 years (49.7%), > 65 years (2.01%) Languages: Official : English & Swahili. O
Slide 45: Uganda Macroeconomic Overview
Uganda Macroeconomic Overview Real GDP (PPP) ($Bn) Population (Mn) 2010-2017 CAGR: 3.3% 2010-2017 CAGR: 2.9% 41.5 41.5 27.9 40.1 38.8 25.8 25.2 25.3 25.4 37.6 24.5 36.3 35.1 33.9 21.1 20.2 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 USD-UGX 2010-2017 Consumer Pric
Slide 46: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 10
Slide 47: Telecom Landscape – Regulators
Telecom Landscape – Regulators Telecommunications Ministry Of ICT & National Guidance Mobile Financial Services Ministry of Finance, Planning and Economic Development, Uganda 11
Slide 48: Telecom Landscape – Market Overview & Industry Players
Telecom Landscape – Market Overview & Industry Players Strong Distribution Network Strategic tilt to mass market Focus on mass market & voice Gov’t Owned with limited Market GSM Activity Largest 3G & 4G Network Large Mobile Money Ecosystem Aggressive free SIM, Voice & data campaign (Jio Strategy) Un
Slide 49: Telecom Landscape – Mobile SIM Penetration
Telecom Landscape – Mobile SIM Penetration 45 100% 40.1 41.5 38.8 90% 40 37.6 35 80% 70% 30 52.4% 50.4% 55.0% 60% 25 48.1% Million 50% 20 22.8 20.4 20.2 40% 18.1 15 30% 10 20% 5 10% 0 0% 2013 2014 2015 2016 Uganda Popn - UN Est. (Mn) 37.6 38.8 40.1 41.5 Mobile SIMs - UCC Est. (Mn) 18.1 20.4 20.2 22.
Slide 50: Telecom Landscape – Industry Revenue
Telecom Landscape – Industry Revenue 3,000 25% 2,495 2,500 2,305 20% 2,170 18.2% 21.6% 2,000 15% UGX Bn 1,500 1,050 10% 1,000 864 8.2% 731 6.2% 5% 500 0 0% CY 2014 CY 2015 CY 2016 Airtel LC Bn 731 864 1,050 Ind Rev LC Bn 2,170 2,305 2,495 Airtel %age Growth 18.2% 21.6% Ind %age Growth 6.2% 8.2% Airt
Slide 51: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 15
Slide 52: Airtel In Uganda History and Milestones
Airtel In Uganda History and Milestones Fiber Expansion Warid Acquisition Merger Completion 300 Sites in 300 Days Distribution Best Overall Reorganization OpCo Entry into Uganda Launch 2010 2011 2012 2013 2014 2015 2016 2017 Mcommerce Services Uganda Cranes Strong Local Partnerships 4G Launch16 16
Slide 53: Airtel Uganda CMS Evolution
Airtel Uganda CMS Evolution Telecom Operators in Uganda CMS Trends 65% 58.7% 55% 50.7% 6.7% 45% 36% 44.0% 35% Merger in 25% May-13 16.2% 15% 5% -5% Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17 Bharti Airtel Op 1 Warid Others In December 2010, the CMS gap between Airtel and O
Slide 54: Airtel Uganda RMS Evolution
Airtel Uganda RMS Evolution Telecom Operators in Uganda RMS Trending Combined 70% 65.0% RMS of ~ 94% 60% 51.4% 50% Merger in May-13 9.0% 48.7% 40% 42.5% 30% 20% 16.3% 10% 0% Dec -08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17 Bharti Airtel Op 1 Warid Others In March 2010, the RMS
Slide 55: Uganda Ad Campaign Video
? airtel THINK LIKE AN Uganda Ad Campaign Video
Slide 56: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities 20
Slide 57: Airtel Uganda GPS
Airtel Uganda GPS GPS Win through Win with Win with Win with more from Win with Distribution Network right cost Existing People Excellence Excellence model Customers Key Position Airtel as the Smartphone Network Build an enabling IT infrastructure and support Enablers Leverage legal and regulatory f
Slide 58: Win with Distribution Excellence
Win with Distribution Excellence Direct Indirect Own Store SSO Mini Shops Kiosks • Airtel Shops (owned + • Independent multi • Exclusive Franchise • Exclusive Kiosks Franchised) brand outlets shops AM float supply, shops AM float • Sales and Services SIM and RCV supply, SIM and RCV 22
Slide 59: Win through more from existing customers
Win through more from existing customers Grow data penetration Our Existing Products & Services and consumption through Grow Airtel money through CLM comprehensive service offerings Airtel Money Data Enhance customer ARPU through relevant price offering Voice SMS Deliver simplest customer experience
Slide 60: Win with Data Growth
Win with Data Growth Data & VAS contribution to GR 35% 30% Launch of Combo Bundles 25% 20% 15% 10% Launch of 100 Days of Launch 5% Happiness 0% 2013 2014 2015 2016 Data Revenue in absolute and as a % of GR is consistently growing 24 *includes Data & VAS revenue streams 24
Slide 61: Win with Airtel Money Growth
Win with Airtel Money Growth AM contribution to GR Business Growth Initiatives 2017/18 14% Scale up Distribution 12% Improve Liquidity 10% 8% Aggressive Customer Acquisition and Retention campaigns 6% 4% Drive Merchant acquisition 2% Product Development 0% Airtel Money platform 2013 2014 2015 2016 A
Slide 62: Win with Network Excellence
Win with Network Excellence Network Coverage & Infill Milestones Up-country U900 & LTE improvements Modernization & OCS upgrade Technology Improvement focus Launch TowerCo. Sale Coverage Expansion + 300 Warid Sites Consolidation 2010 2011 2012 2013 2014 2015 2016 2017 Technology Key Facts Key Partne
Slide 63: Win with IT Excellence
Win with IT Excellence 2017 Projects Completed 2017 Projects In Progress OCS 1.2 to OCS 5.5 KYC UCC regulatory Airtel Money Re-registration Platform Global KYC 27 27
Slide 64: Win with Right Cost Model
Win with Right Cost Model Improve profitability and cash flow Build functional operating model through effective asset management aligned to scale of operations Reduce CWIP > 180 days Bandwidth/ Backhaul Optimization Improve working Capital through Zonal Structure re-alignment Old debts recovery Opt
Slide 65: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities
Slide 66: Brand Positioning
Brand Positioning 80 80 TOMA Consideration 70 71 70 69 60 51 60 50 50 48 50 47 47 40 44 40 34 40 35 30 30 20 22 20 30 26 26 10 10 0 0 Oct-14 May'15 Dec-15 Oct 2017 Oct-14 May'15 Dec-15 Oct 2017 Airtel Operator 2 Airtel Operator 2 Uganda Cranes Sponsors from 2013 30 30
Slide 67: Our CSR Projects
Our CSR Projects Our Corporate Social Responsibility Pillars Education Health Sport Adopt A School Blood Donation Kabaka Birthday Run Uganda Cranes Maths and Reading Programs Regional Health Camps Masaza Cup ICT For Schools Airtel Rising Stars U900 31 31
Slide 68: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities
Slide 69: Airtel Uganda Financials
Airtel Uganda Financials Gross Revenue (Bn) EBITDA Margin (%) 2013-2016 CAGR: 28.5% 60.0% 1,033 50.0% 53.3% 846 722 40.0% 487 30.0% 34.7% 20.0% 22.6% 10.0% 11.8% 0.0% 2013 2014 2015 2016 2013 2014 2015 2016 • The revenue does not include Other Operating Income • 2014 – includes one-time integration
Slide 70: Agenda
Agenda Bharti Airtel in Uganda Uganda Country Profile & Economic Overview Telecom Market Overview Airtel Journey So Far Airtel GPS Brand and CSR Positioning Financial Overview Key Priorities
Slide 71: Our Priorities
Slide 35 Our Priorities Drive Customer Revenue Financial Experience Streams Superior Network Data Grow RMS & GR Hold Costs & & & Airtel Money Airtel Money Grow EBITDA Experience Network Expansion Distribution Rebalancing Brand U900 Airtel Money Platform 35 Innovation Culture
Slide 72: Thank you
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