Slide 1: Idea – Vodafone India Merger Investor Presentation
Idea – Vodafone India Merger Investor Presentation 20th March 2017
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Idea Cellular Limited (a Aditya Birla Group company) (“Idea”) solely for information purposes in relation to a potential arrangement between Idea and Vodafone India Limited (a group company of Vodafone Group Plc) pursuant to scheme of arrangement wit
Slide 3: Merger of Idea and Vodafone India
Merger of Idea and Vodafone India A strong proposition for all stakeholders Realizing the ‘Digital India’ vision Delivering benefits for consumers Creating value for shareholders 3
Slide 4: Realizing the 'Digital India' vision
Realizing the ‘Digital India’ vision Transform India into a digitally empowered society Accelerate the availability of high-speed mobile broadband services throughout India Support sustained investment to create a ‘World-Class’ telecom infrastructure Better utilisation of national resources and crea
Slide 5: Delivering benefits for consumers
Delivering benefits for consumers Deliver consumer benefits through combination of networks & spectrum holdings Excellent consumer experience & industry leading coverage on back of complementary footprint Largest broadband and voice capacity to market unlimited voice plans & very large mobile broadb
Slide 6: Creating value for shareholders
Creating value for shareholders Ability to generate better returns Substantial Opex & Capex synergies Creating a stronger listed business with a deep spectrum position – Accretive transaction Improved Return on capital from higher scale. Synergy benefits to enable faster de-leveraging of balance she
Slide 7: Key highlights
Key highlights 1 Creation of India’s largest telecommunications company 2 Equal partnership between Aditya Birla Group and Vodafone Group 3 Strategic fit and complementary assets 4 Significant synergies 5 Unlocking further value through monetisation of tower assets 7
Slide 8: Current holding structure
Current holding structure Idea Vodafone India Promoters Public Vodafone 42.45%(1) 57.55% 100% Transaction perimeter 100% Idea VMSL VIL 42% 100% 49% 100% Subs / JVs of Indus Other ABTL ABIPBL VIL / VMSL Towers Subs • M-Pesa 11.15% • ICISL • You Broadband(2) • Payments • ICSL • Firefly (3) Bank • ITL
Slide 9: Resulting structure
Resulting structure Idea Promoters Public Vodafone 21.1% → 26.0% 28.9% 50.0% → 45.1% Merged entity Mobility(1) Towers Payments Bank(3) Other Subs / JVs • Captive towers and tenancies(2) • Idea Money • Idea:8,886/15,418 • You Broadband(4) • Both mobility • M-Pesa • Vodafone(1): • Firefly businesses •
Slide 10: Aditya Birla Group and Vodafone: A strong partnership
Aditya Birla Group and Vodafone: A strong partnership Aditya Birla Group Vodafone Group Leading conglomerate Enterprise • One of India’s most respected and • Leader in enterprise mobility largest conglomerates with over internationally, PoP in 73 150 years of heritage countries • Aggregate revenues
Slide 11: Principles of partnership
Principles of partnership 1 • Idea promoters and Vodafone Group will be joint promoters of the Equal Partnership combined entity • Equal affirmative rights to both promoters on key matters 2 • 12 member board with 6 independent directors Board Composition • Equal representation from Aditya Birla Gro
Slide 12: Highlights of combination
Highlights of combination 1 • Creating India’s largest telecommunications company Largest Telecom • Combined Subscriber base of nearly 400 million1 Operator • Combined RMS of 40.7%2 and CMS of 35.1%1 • Leadership position (#1 / #2 rank)2 in 21 (out of 22) telecom circles 2 • Largest existing Mobile
Slide 13: Highlights of combination (cont'd)
Highlights of combination (cont’d) 4 • Substantial overall spectrum holding of 1,850 MHz1 across multiple bands Largest Spectrum • Auction acquired liberalised spectrum quantum of 1,645 MHz1 Portfolio • Large broadband (3G/4G) spectrum portfolio of 1,429 MHz2 • Premium 900 MHz band in 17 circles3 5
Slide 14: Highlights of combination (cont'd)
Highlights of combination (cont’d) 7 Unparalleled • Service footprint of 19,000 company branded stores Service • More than 28,000 contact centre agents to serve 400mn customers Infrastructure • Managing daily volume of 2.3 mn consumer calls 8 • Rationalisation of operating expenses including Network
Slide 15: Creating the leading Indian mobile operator
Creating the leading Indian mobile operator Customers (in Mn.) Gross Revenue (in INR Bn.) Customer market share (%)1 As of Dec 16 Revenue market share (%)2 For Q3 FY17 35% 28% 18% 17% 16% 9% 6% 41% 34% 23% 18% 10% 9% 6% 395 197 320 166 205 191 110 183 87 100 72 47 43 29 Gross Revenue (in INR Bn.) EB
Slide 16: Creating the leading Indian mobile operator (cont'd)
Creating the leading Indian mobile operator (cont’d) Total Spectrum holding (in MHz) Broadband spectrum holding (in MHz) Spectrum market share (%) Post October 2016 auctions Broadband spectrum market share (%)1 Post October 2016 auctions 27% 22% 18% 14% 14% 13% 13% 30%2 27% 24% 14% 14% 11% 7% 1,850
Slide 17: Creating the leading Indian mobile operator (cont'd)
Creating the leading Indian mobile operator (cont’d) Subs (mn) 190.5 204.7 395.2 320.3 72.2 RMS (Q3FY17) 18.1% 22.7% 40.7% 34.3% 0.3% CMS 16.9% 18.2% 35.1% 28.4% 6.4% (Q3FY17) # 3G / 4G circles 15 / 20 16 / 17 22 / 22 22 / 22 NA / 22 GSM / BB sites (‘000s) 132 / 100 141 / 89 273 / 189 185 / 171 NA /
Slide 18: Competitive revenue position across 21 circles
Competitive revenue position across 21 circles Circle share Idea Vodafone Combined Idea RMS Vodafone Combined Circles in Industry RMS RMS RMS Rank RMS Rank Rank Revenue Maharashtra 8% 31.7% 24.3% 56.0% 1 2 1 Delhi 8% 11.7% 26.7% 38.4% 3 2 1 JAMMU & Mumbai 7% 8.9% 33.0% 41.9% 6 1 1 KASHMIR Uttar Prad
Slide 19: World's 2nd largest mobile telecom operator
World’s 2nd largest mobile telecom operator^: servicing ~400mn subscribers Circle share Idea Vodafone Combined Combined Idea CMS Vodafone Combined Circles in Industry CMS CMS EoP (Mn.) CMS Rank CMS Rank Rank Subscribers Maharashtra 8% 28.1% 20.8% 44.4 48.9% 1 3 1 JAMMU Gujarat 6% 18.8% 28.9% 32.6 47
Slide 20: Enhanced spectrum position: Pan India 3G and 4G offerings
Enhanced spectrum position: Pan India 3G and 4G offerings Total No of Carriers Spectrum Circles Holding GSM 3G 4G FDD 4G TDD 3G+4G (in MHz) Maharashtra 122.8 22.8 3 3 6 12 JAMMU Kerala 114.8 24.8 2 4 5 11 & KASHMIR Gujarat 113.6 23.6 2 4 5 11 Haryana 106.0 26.0 2 4 3 9 HIMACHAL PRADESH Uttar Pradesh
Slide 21: New / emerging businesses
New / emerging businesses • Bouquet of digital services to catalyse mobile data demand • Strong offerings across categories such as Digital Entertainment (incl. Digital Services Movies, Music, Games, Live TV), VoIP and VoLTE, Information and Cloud & Storage Services • Launch of Payments Bank service
Slide 22: Significant estimated synergies of ~INR 670bn
Significant estimated synergies of ~INR 670bn1 • Rationalisation of co-located sites following network consolidation (~20%) Network • Energy savings & operational efficiencies with elimination of older GSM sites • Savings related to small cells, IBS and connectivity cost Customer OPEX related Acquis
Slide 23: Pro-forma Financials (LTM December 2016)
Pro-forma Financials (LTM December 2016) All figures in Aggregate INR bn Revenue 369 447 816 EBITDA 114 130 244 Net debt 527(1) 552(2) 1,079 Net debt / 4.6x 4.2x 4.4x EBITDA Capex 75 79 153 Total Spectrum 617 788 1,405 investment Net Debt : LTM EBITDA at ~3x on pro forma basis Post sale of Idea & Vo
Slide 24: Rapid de-leveraging for Merged Co
Rapid de-leveraging for Merged Co Net debt / LTM EBITDA (as at Dec 16) Debt Breakdown (as at Dec 16) 4.4x 20% 3.0x 80% PF leverage¹ PF leverage post Market DoT Debt Other Debt tower disposal² with recovery expected4 run-rate synergies³ 1. Based on 2 x Idea’s net debt of INR527 bn (US$7.9bn) as at 31
Slide 25: Unlocking further value through tower assets
Unlocking further value through tower assets Own towers1 Own towers1 11.15% stake2 Tenancy ratio 1.5x 1.7x 2.3x 31,544 15,846 15,418 13,608 10,926 8,886 No. of Tenancies No. of Towers Strong monetisation potential for both combined entity’s captive towers & Idea’s 11.15% Indus stake 25 1. Excludes t
Slide 26: Key activities
Overview of key approvals • Filing of Scheme with Stock Exchanges and SEBI for approval • Apply for regulatory approvals (CCI, DoT, RBI, FIPB (if applicable)) • Filing of Scheme with NCLT Key activities • Shareholder and creditor meetings • Scheme approved by NCLT • Regulatory approval • Listing app
Slide 27: Summary
Summary 1 Creation of India’s largest telecommunications company with nearly 400 mn subscribers, combined RMS of 40.7% and CMS of 35.1% 2 Combination a strong proposition for all stakeholders realize ‘Digital India’ vision, deliver benefit to consumers and create shareholder value 3 Equal partnershi
Slide 28: Thank You
Thank You
Slide 29: Supporting materials
Supporting materials
Slide 30: Idea: Current holding structure
Idea: Current holding structure Promoters Public Description • ABTL (Aditya Birla Telecom Ltd): Holds 42.45% (1) 57.55% 11.15% stake in Indus Towers and is engaged in the business of sale and purchase of communication devices • ABIPBL (Aditya Birla Idea Payments Idea Bank Ltd): An association with A
Slide 31: Vodafone India: current holding structure
Vodafone India: current holding structure Description Vodafone Excluded from the • VIL (Vodafone India Ltd): Mumbai mobile circle 100% transaction perimeter operations • VMSL (Vodafone Mobile Services Ltd): Other mobile circles excluding Mumbai. Includes ILD, 42% Indus VIL NLD and ISP Towers • VMPL
Slide 32: Aditya Birla Group
ADITYA BIRLA GROUP