Slide 1: Investor presentation: Update on Unitech Wireless
17th September, 2009 Investor presentation Update on Unitech Wireless Unitech Wireless
Slide 2: Delivering the telecom business plan
Delivering the telecom business plan • High market growth with huge potential • Integrated go-to-market strategy • Efficient and scalable operating model • On track to secure funding • Management is confident to deliver on business plan 2
Slide 3: Indian economy is still growing
Indian economy is still growing • Outlook for sustained GDP growth GDP growth projections (%) of more than 7% 7.9 8.0 8.0 • Impact of global recession is limited 6.1 6.3 7.8 8.1 7.9 5.5 6.6 • Majority Congress government 5.3 5.0 expected to provide political stability • India’s benchmark stock marke
Slide 4: Mobile growth continues
Mobile growth continues Mobile subscribers (million) • Indian mobile market exceeding 912 802 500 million subscribers in 2009 710 626 • Penetration level around 35% 509 347 indicates significant growth remaining • Average monthly net adds of 12 2008 2009 2010 2011 2012 2013 million from Q208 to Q209
Slide 5: Competitive intensity
Competitive intensity Revenue market share (Q109) • Currently 6-8 operators in most 3% 1% 8% circles 12% 29% • New launches from April 2009 to date: 11% 16% 20% • Aircel in 8 circles • Tata DoCoMo in 7 circles SIM market share (Q109) • MTS in 3 circles • Idea in 2 circles Bharti 24% RCOM 19% • New e
Slide 6: ARPU decline has continued in 2009
ARPU decline has continued in 2009 • ARPU already at the ARPU trends (INR per month) lower end of most Asian Airtel markets 400 Reliance Idea • Spectrum scarcity and 350 Vodafone continued GDP growth 300 Telenor original market projections will act as a buffer 250 • Significant number of 200 inactiv
Slide 7: Market revenue growth expected to remain robust
Market revenue growth expected to remain robust Market revenue projections (INR bn) CAGR 17% 2,550 2,249 2,004 1,702 1,309 1,145 2008 2009 2010 2011 2012 2013 Sources: Cellular Operators Association of India, Association of Unified Service Providers of India, Pyramid research 7
Slide 8: Spectrum scarcity
Spectrum scarcity • Spectrum scarcity continues, especially in dense urban areas • Established operators face sever spectrum constraints in key cities • Government to decide on methodology for allocation of further 2G spectrum • 3G spectrum reserve price set at INR 35 bn for pan-Indian licence 8
Slide 9: Integrated go-to-market strategy
Integrated go-to-market strategy • Higher ARPU customers: Offer best value for money Distinct value • Mass-market: Offer simple products at attractive prices proposition • Provide attractive offers based on customer insight and local Targeted and tailoring simple offerings • Focus on selected market
Slide 10: Regulations encouraging competition and partners' reputation create a strong platform
Regulations encouraging competition and partners’ reputation create a strong platform Recent policy changes are attempting to level Owners’ reputation and brand make UW one the playing field for new entrants of the most attractive new entrants Active & passive • Passive sharing will decrease upfront
Slide 11: Unique operating model set up
Unique operating model set up IT systems WiPro: • Pan-Indian passive HRO implementation, Ericsson/Huawei/ WiPro support O& M Alcatel Lucent sharing contract with Placement Turnkey Tata/Quippo for towers consultants implementation Outsourced Managed and transmission payroll services • IT systems outs
Slide 12: Organisation model based on 11 hubs
Organisation model based on 11 hubs # Hub HQ Circles covered RoTN Hub leader in 1 Chennai Chennai place Kerala 2 Bangalore Karnataka 10 Chandigarh 3 Hyderabad Andhra Pradesh Kolkata 6 Delhi 4 Kolkata West Bengal Lucknow Orissa 5 9 5 Lucknow UP (E) 7 Patna Guwahati UP (W) (Inc. Uttaranchal) 4 6 Delhi
Slide 13: Significant differences across circles
Significant differences across circles Metro circles A circles B circles C circles Punjab 55% Delhi 94% Kolkata 71% Population: 28.3 Population: 25.6 Population: 17.8 Subscribers : 15.7 Subscribers: 24.0 Subscribers: 12.7 J&K 37% Haryana 43% Mumbai 89% Chennai 79% Population: 11.4 Population: 24.6 P
Slide 14: Local micro market understanding is critical – Andhra Pradesh example
Local micro market understanding is critical – Andhra Pradesh example Adilabad (Telengana) Visakhapatnam (coastal belt) • Population: 2.5m • Population: 3.8m Srikakulam • Pop. density: 154/sq km Adilabad Vizianagaram • Pop. density: 343/sq km • Mobile penetration: 30-35% • Mobile penetration: 45-50%
Slide 15: Targeting 8% pan-Indian market share
Targeting 8% pan- Indian market share • Targeting both churners and new subscribers • Large share of net adds first years due to low churn from own subs • Significant differences in market share between circles • Sub-market ARPU first years UW pan-Indian market share 10% 8% 6% 4% Share of gross adds
Slide 16: Organization in place and launch well underway
Organization in place and launch well underway Man. Director • More than 8,500 BTS Stein-Erik Vellan sites installed EVP Marketing EVP Finance EVP Operations • More than 900 people David Meneghello Johan Lindgren Rohit Chandra on-board EVP Corp. Affairs EVP HR EVP Hubs • More than 1,200 Rajiv Bawa K
Slide 17: Financing on track
Financing on track • INR 61 bn from Telenor Group in 2009 • No more equity assumed – 67/33 ownership long term • Bridge facility of INR 50 bn from State Bank of India • Work on long term project financing started 17
Slide 18: Financial outlook and long term ambitions
Financial outlook and long term ambitions • Capex of INR 25-32 bn and Outlook for 2009 (INR bn) EBITDA loss of INR 11-14 bn in 2009 EBITDA Capex • EBITDA breakeven in 39-46 approximately three years from 25-32 launch • OCF* breakeven in approx five years from launch • Accumulated OCF loss of INR 155
Slide 19: Summary
Summary • Have the right formula to win and are building the necessary tools • On track for launch in Q4 2009 • Highly committed management team • Focus on delivering on the business plan and creating shareholder value 19
Slide 20: Thank You
Thank You Unitech Wireless