Indus Towers Limited · NSE:INDUSTOWER
Indus Towers — Bharti Infratel — Investor Presentation (May 2016)
34 slides from Indus Towers's investor presentation, May 2016
Slide 1: Investor Presentation May 2016
Investor Presentation May 2016
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by Bharti Infratel Limited (the “Company”) for use in presentations by the Company
Slide 3: Table of Contents
Table of Contents Company Overview Industry Overview Business Model Strengths In Summary 3 of 34
Slide 4: Company Overview
(, Company Overview
Slide 5: Bharti Infratel – Who We Are?
Bharti Infratel – Who We Are? A Leading Tower Infrastructure Operator Pan India Presence across all 22 Telecommunications Circles Indus Towers – JV between Bharti Infratel, Vodafone and Aditya Birla Telecom Top 3 Operators – Anchor Customers & Relationships with all other Operators Marquee promoter
Slide 6: Performance at a Glance
Performance at a Glance 88,808 towers and 195,035 co-locations(1) Market share in terms of installed tower base, FY15 38,458 towers of Bharti Infratel and 50,350 towers from 42% stake in Indus (1) Infratel + Indus(1) : 40.8% Others 10.1% Indus FY16 Consolidated Revenue of US$1,858m Viom 31.0% 11.3%
Slide 7: Pan India Footprint: Leading Positions Across India
Pan India Footprint : Leading Positions Across India Pan India presence ⁻ Opportunities for voice growth in rural areas given rural penetration of 50.26%(1) ⁻ 3G/4G services to drive data consumption ⁻ Given inadequate wire-line infrastructure, wireless services expected to cater to new demand Bhart
Slide 8: Industry Overview
(, Industry Overview
Slide 9: Operator Industry Dynamics
Operator Industry Dynamics Market Concentrated in Hands of Select Players The Indian market is dominated by the top 3 operators: BIL's Anchor Tenants Others BSNl+MTNL Aircel 3.3% 5.6% 5.5% Rcom Bharti Airtel TTSL 6.6% 5.2% 31.7% Idea Cellular 19.0% Vodafone 23.1% Anchor tenants : 73.8% RMS Non-discr
Slide 10: Continuing Voice Led Growth
Continuing Voice Led Growth Wireless Base continues to rise – while MOU / Sub has held steady India: Wireless Subscriber Base1 (m) 1,027 Growth opportunities remain in rural 919 970 868 905 and semi urban voice market 812 Rural penetration still ~ 50% - significant headroom 2011 2012 2013 2014 2015
Slide 11: Increasing Operator Focus on Data
Increasing Operator Focus on Data An operator agnostic business model, superior network footprint and service quality standards allow Bharti Infratel to capitalize on the growth in the data market Operator Investment in Licenses Investments by Anchor Operators5 3G/4G auctions held since 2010 led t
Slide 12: Data Revolution Unfolding
Data Revolution Unfolding • Favorable demographics –Median Age of India’s population ~26 years • Broadband penetration ~1%1 & Urban Internet penetration ~6%2 • Technology Adoption and smartphone penetration leading to higher data uptake Superior Technology will lead to Subscriber growth3 Smartphone
Slide 13: Network & Data Growth Forecasts
Network & Data Growth Forecasts Exponential Growth in Data is expected for a long time to come 6–Fold 4–Fold 22–Fold Increase Increase Increase 3G and 4G will be the leading technologies in 2020 India Population Coverage by GSM/EDGE, WCDMA/HSPA and LTE technologies Source: Ericsson Mobility Report –
Slide 14: Phases of Data led Tower Revenue Growth
Phases of Data led Tower Revenue Growth Airtel has 100 sites in Delhi Due to Propagation effect Total Towers available with Circle (900 + 1800 Mhz) for 2G Airtel will need 150 sites on Indus in Delhi - 135 coverage 2100 MHz for 3G Loading all the existing Loading Revenue for STAGE 1 100 sites with 3
Slide 15: Business Model Strengths
(, Business Model Strengths
Slide 16: Business Model Strengths
Business Model Strengths 1 A Leading Tower Infrastructure Operator 2 Visibility of Future Revenues Through Long Term Contracts 3 Demonstrated Operational and Financial Performance 4 Implementation of Green Initiatives 5 Experienced Management 16 of 34
Slide 17: A Leading Global Tower Infrastructure Operator
1 A Leading Global Tower Infrastructure Operator Indian Tower Companies(1) Global Listed Tower Companies(1) Sharing Ratio: 2.19(2) 1.00 2.2 1.80 1.53 1.9 2.3 1.8 1.7 0.9 180 160 140 Bharti Infratel + 42% equity interest in Indus 120 70 Towers (‘000s) 100 80 143 60 88 40 69 57 20 44 40 30 26 24 11 10
Slide 18: Long Term Contracts with Visibility of Future Growth
2 Long Term Contracts with Visibility of Future Growth Key Features of Master Service Agreements (MSAs) Tenor Long term (10 to 15 years) with built in escalations (2.5% p.a) Termination Penalty Significant exit penalties A base rental rate is applicable, based on the following factors: Base Re
Slide 19: Business Model Unique to India
2 Business Model Unique to India Key Features of Master Service Agreements unique to India unlike US Tower Cos Purpose Key Feature Result • It is not economically rewarding for the operators No Operator in India is building towers on Disarming The Operators to build new towers themselves their own n
Slide 20: Demonstrated Operational and Financial Performance: Towers and Co-locations
3 Demonstrated Operational and Financial Performance Stable tower growth… 90,000 CAGR: 3.1% 88,808 85,892 Towers(1) 85,000 83,368 82,083 80,000 78,442 79,064 75,000 73,921 70,000 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 …coupled with an increase in co-locations 1.57 1.75 1.85 1.90 1.9
Slide 21: Demonstrated Operational and Financial Performance: Revenues
3 Demonstrated Operational and Financial Performance Strong revenue growth… Strong Operating Leverage 1858 Revenues(1)(2) (US$m) 2000 CAGR: 9.8% 1761 Indexed to 100 1634 CAGR 1544 1427 1500 1283 1058 1000 500 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 47.1% … expanding margins… 900 816
Slide 22: Focus on Delivering Shareholder Value
3 Focus on Delivering Shareholder Value Bharti Infratel is focused on delivering return to its shareholders through multi-pronged strategy Pursuit of viable value accretive inorganic growth Bharti Infratel is focused on identifying opportunities for inorganic growth that are value accretive and fe
Slide 23: Quarterly Performance Reposed Significant Growth
3 Quarterly Performance Reposed Significant Growth Co-locations Revenue1 (US$m) 200,000 490 Y-o-Y Growth: 6.99% 195,035 477 480 Y-o-Y Growth: 7.30% 195,000 191,921 190,000 188,636 470 467 185,215 459 185,000 182,294 460 455 180,000 450 445 175,000 440 170,000 430 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 M
Slide 24: Implementation of Green Initiatives
4 Implementation of Green Initiatives Bharti Infratel has institutionalized ‘GreenTowers P7’ programme, aimed at minimizing dependency on diesel consumption and thereby, reducing the carbon footprint The ‘GreenTowers P7’ programme is based on seven innovative ideas deploying cleaner energy techn
Slide 25: Experienced Management Team
5 Experienced Management Team Joined Bharti Infratel in March 2008 as Director Work experience of 30 years Akhil Gupta Certified Chartered Accountant and fellow member of ICAI. Completed an advanced management program at Chairman Harvard Business School. Has received various awards including
Slide 26: CSR, Awards and Recognition
CSR, Awards and Recognition Awards and Recognition Best Employer Award 2016 • Aon Hewitt released the list and Bharti Infratel is one of the best Employers in India second time in row. Dun & Bradstreet Infra Awards 2015 • Bharti Infratel has won two awards under the Best Growing Infrastructure Compa
Slide 27: In Summary
(, In Summary
Slide 28: Company Strategy
Company Strategy Promote Tower Sharing Capitalize on the Rollout of New Technologies Organic Growth and Acquisition Opportunities and Data Services Achieving Cost Efficiencies Across Increasing Revenue and Capital Productivity Tower Portfolios 28 of 34
Slide 29: Investment Thesis
Investment Thesis Demonstrated Operational and Financial Performance Insulated from Major Concerns - $-Re, Continuing Voice led Growth Leverage, Import Dependence Operator Agnostic way to benefit Experienced Management Team from Data Growth High Standards of Corporate Regulatory Environment Favorabl
Slide 30: Appendix
Appendix
Slide 31: Bharti Infratel Overview
Bharti Infratel Overview Corporate Structure Public(1) Vodafone Idea #2 Wireless Operator(3) #3 Wireless Operator(3) 28.3% 42% 100% 71.7% Bharti Infratel Indus Towers 42% 16% Aditya Bharti Airtel Birla 88,808 Towers(2) Telecom 119,881 Towers(2) #1 Wireless Operator(3) #1 Tower Company(4) #2 Tower Co
Slide 32: Impact of Data Growth on Tower Industry
Impact of Data Growth on Tower Industry Expansion of 3G / 4G Networks by Operators will necessitate demand for towers Propagation on higher frequency band weaker Data usage to drive co-location growth 3G/4G only sites to drive tower demand Propagation effects in different bands Tower Multipl
Slide 33: Regulatory Environment Favourable
Regulatory Environment Favourable The Cabinet Committee on Infrastructure has included “Telecommunication towers” as a infrastructure sub-sector in the master list Potential Benefits Impact Accelerated depreciation Encourages further investments in expanding the telecom infrastructure to rural areas
Slide 34: Investor Presentation
Investor Presentation May 2016