analyst meet q2 & h1 fy09 v5
TRANSCRIPT
Analyst MeetQ2 & H1 FY09
Tata Teleservices (Maharashtra) Limited
10 November 2008
Disclaimer
Certain statements in this release concerning our Company objectives, future prospects, expectations may be forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Tata Teleservices (Maharashtra) Limited may, from time to time, make additional written and oral forward looking statements, including our reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.
Market Overview
India
Population as on July 2007 (Mln)Population as on July 2007 (Mln) 1129.81129.8 99.899.8 1818
Maharashtra(excl. Mumbai) Mumbai
Source: Department of Economics & Statistics, Tata Services Ltd. & TRAI Subscriber Report
Wireless TeledensityWireless Teledensity 28%28% 25%25% 88%88%
H1 09 subscriber growth over H2 08H1 09 subscriber growth over H2 08 21%21% 19%19% 16%16%
Wireless Base as on Sep 2008 (Mln)Wireless Base as on Sep 2008 (Mln) 315.4315.4 24.724.7 15.815.8
H1 09 TTML subscriber growth over H2 08
H1 09 TTML subscriber growth over H2 08 24%24% 18%18%
13.1%
2.6%
19.7%
3.2%
16.1%
23.0%
16.4%
6.0%
15.5%
3.9%
27.9%12.4%
22.7%
17.5%
8.6%
4.6%
9.0%
23.0%
23.4%
14.4%
17.0%
H1 09 Wireless Incremental Market ShareMumbaiMumbai ROMROM
TTMLTTML
11
22 44 11
22
33
11
2233
33
Vodafone
Reliance
BPL
MTNL
Airtel
Idea
Idea
Vodafone Airtel
Reliance
BSNL
Idea
Vodafone Airtel
BSNL
MTNL
BPL
Reliance
Tata IndicomTata Indicom
Tata Indicom
8.3%
15.1%5.2%
18.5%
4.1%
14.1%
18.3%
16.5%
19.4%
24.3%
14.3%
13.6%
14.6%
13.8%
16.5%
10.5%
13.4%20.6%
25.1%
13.2%
0.6%
H1 09 Wireless EOP Market ShareMumbaiMumbai ROMROM
TTMLTTML
44 55
11
22
33
11
22
33
4455
11 22
33
Vodafone
Reliance
BPL
Tata Indicom
MTNL
Airtel
Idea
Idea
Vodafone Airtel
Reliance
BSNL
Idea
VodafoneAirtel
BSNL
MTNL
BPL
Reliance
Tata Indicom
Tata Indicom(FY 08 EOP MS = 13.5%)
Reliance30.4%
Bharti19.1%
Tata Indicom50.5%
Reliance20.6%
Bharti29.8%
Tata Indicom49.7%
H1 09 Wireline EOP Market Share
MumbaiMumbai
ROMROM
(Only Private players)(Only Private players)
(354K)(354K)
(106K)(106K)
Business Priorities
Optimize Costs & Enhance MarginsOptimize Costs & Enhance Margins33
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Enhance Network RolloutEnhance Network Rollout22
Focus on Customer ServiceFocus on Customer Service44
Business Priorities
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Schemes & Offers
Value Added Services
Devices
Concerts & Events
TVCs & Radio
Build Indicom Brand & Focus on Innovation
Highlights of Let’s Rock Plan
Launched in June end
3 years validity
Special tariffs at night after 9pm
Accounts for over 23% of sales since launch
Schemes & OffersSchemes & OffersLet’s Rock
Build Indicom Brand & Focus on Innovation
Schemes & OffersSchemes & OffersTata-to-all Rs. 475 Recharge
Build Indicom Brand & Focus on Innovation
Launched in September 08Feature enhanced to connect upto 29 users at one time Major marketing campaign planned
Value Added ServicesValue Added Services
Build Indicom Brand & Focus on Innovation
Value Added ServicesValue Added Services
Build Indicom Brand & Focus on Innovation
Value Added ServicesValue Added Services
VAS + Data Revenues as a % of Wireless Revenue increased from 11.8% to 13.4%, Q408 to Q209
VAS + Data Revenues as a % of Wireless Revenue increased from 11.8% to 13.4%, Q408 to Q209
TTML V-Data EOP Subscriber GrowthTTML V-Data EOP Subscriber Growth
Q4FY08 Q1FY09 Q2FY090
>150K>150K
100
150
50
Build Indicom Brand & Focus on Innovation
DevicesDevices
Plug2Surf with 1GB MemoryNovatium – Nova NetPC
Build Indicom Brand & Focus on Innovation
DevicesDevices
Blackberry world editionWalky-Talky
Build Indicom Brand & Focus on Innovation
DevicesDevices
Samsung, Haier & ZTE Handset Offerings
Build Indicom Brand & Focus on Innovation
Concerts & EventsConcerts & Events
Build Indicom Brand & Focus on Innovation
Concerts & EventsConcerts & Events
Build Indicom Brand & Focus on Innovation
TVCs & RadioTVCs & Radio
Go One (TVC)Go One (TVC) Shree Ganesha (TVC)Shree Ganesha (TVC)
Business Priorities
Optimize Costs & Enhance MarginsOptimize Costs & Enhance Margins33
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Enhance Network RolloutEnhance Network Rollout22
Focus on Customer ServiceFocus on Customer Service44
Enhance Network Rollout
Hindustan Times Business Standard Loksatta
1168 12421319
1538
1757
2050
500700
9001100
13001500
17001900
21002300
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
367415 449
565
679
812
0100200300400500600700800900
Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
Enhance Network Rollout
EOP Town CoverageEOP Town Coverage
EOP Wireless Cell SitesEOP Wireless Cell Sites
512512
247247
Enhance Network Rollout
Optical fiber backbone of more than 6500 Kms at end of H1
Wireline network in Mumbai upgraded to NGN MPLS network
Mumbai network successfully swapped in August ‘08
247 towns and 512 BTSs rolled out, taking the total to 812 towns and 2050 BTSs; best ever wireless rollout performance in any half yearly span
Business Priorities
Optimize Costs & Enhance MarginsOptimize Costs & Enhance Margins33
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Enhance Network RolloutEnhance Network Rollout22
Focus on Customer ServiceFocus on Customer Service44
Optimize Costs & Enhance Margins
Tower assets divested to 21st Century Infra Tele Ltd, with effect from 30th
September
Infra sharing arrangements with operators
Reduced reliance on free on-net calling; reduced free internet access on broadband plans
Recharge commission structure brought more in line with the market
Business Priorities
Optimize Costs & Enhance MarginsOptimize Costs & Enhance Margins33
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Enhance Network RolloutEnhance Network Rollout22
Focus on Customer ServiceFocus on Customer Service44
Focus on Customer Service
Lowest POI congestion among all operators as per TRAI report
Loyalty programs for customers (e.g. birthday greetings, movie tickets, privileged help-desk support, instrument health-check)
Acterna – Real-time monitoring of fiber cuts in Mumbai to improve restoration time
Automatic Switch-over of Optical Network (ASON) for multiple path redundancy for Mumbai
Q2 & H1 FY09 Performance
TTML EOP Subscribers & Market Share
EOP Subscribers in millionsEOP Subscribers in millions 3.073.07 5.085.08
Source: TRAI Subscriber Report
Wireless Incremental Market Share
Wireless Incremental Market Share 15.2%15.2% 15.8%15.8%
Wireless EOP Market ShareWireless EOP Market Share 12.1%12.1% 13.5%13.5%
FY06 FY07 FY08
EOP Subscriber Base (Mn)
H1FY090
3.073.07
1.81.8
6.156.15
5.085.08
1.81.8
12.5%12.5%
10.5%10.5%
Year FY06 FY07 FY08
6.156.15
16.4%16.4%
14.1%14.1%
H1 FY09
SCORECARD Q2 FY08 Vs Q2 FY09
Total Revenue (Rs.Crs.)Total Revenue (Rs.Crs.)
EBITDA (Rs.Crs.)EBITDA (Rs.Crs.)
EBITDA Margin % EBITDA Margin %
Cash Profit (Rs.Crs.)Cash Profit (Rs.Crs.)
Q2 FY08Actual
EOP Subscribers (Nos. in lacs)EOP Subscribers (Nos. in lacs)
PAT (Rs.Crs.)PAT (Rs.Crs.)
Q2 FY09Actual
429429
106106
25%25%
5555
41.341.3
(49)(49)
121%121%
152%152%
124%124%
124%124%
%Performance
149%149%
104%104%
Cash Profit (Rs.Crs.) (excl. Forex Loss/Gain)Cash Profit (Rs.Crs.) (excl. Forex Loss/Gain) 6363 162%162%
518518
161161
31%31%
6868
61.5461.54
(47)(47)
102102
SCORECARD H1 FY08 Vs H1 FY09
Total Revenue (Rs.Crs.)Total Revenue (Rs.Crs.)
EBITDA (Rs.Crs.)EBITDA (Rs.Crs.)
EBITDA Margin % EBITDA Margin %
Cash Profit (Rs.Crs.)Cash Profit (Rs.Crs.)
PAT (Rs.Crs.)PAT (Rs.Crs.)
10231023
316316
31%31%
148148
H1 FY09Actual
(82)(82)
Cash Profit (Rs.Crs.) (excl. Forex Loss)Cash Profit (Rs.Crs.) (excl. Forex Loss) 202202
EOP Subscribers (Nos. in lacs)EOP Subscribers (Nos. in lacs) 61.5461.54
H1 FY08Actual
839839
207207
25%25%
131131
41.341.3
(78)(78)
123123
Quarterly Performance
EOP Subscriber Base (`000)
2,350 2,711 3,0743,478
4,1275,079
5,617
2,104
6,154
4,696
600
1,600
2,600
3,600
4,600
5,600
6,600
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
EOP Subscriber Base (`000)
2,350 2,711 3,0743,478
4,1275,079
5,617
2,104
6,154
4,696
600
1,600
2,600
3,600
4,600
5,600
6,600
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Revenue (Rs.Cr.)
342367 389 409 429
491 505
324
518460
150
250
350
450
550
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Operational Cost per Sub (Rs.pm)
415374 337 314 283
233 218250202
449
150
250
350
450
550
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
EBITDA (Rs.Cr.)
8397 106
150 155
34
6458
161
128
0
40
80
120
160
200
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Crossed 500 Crstwo quarters in a
row
Quarterly Performance
EBITDA Margin (%)
19%23% 25% 25%
31% 31% 31%
18%
25%28%
0%
7%
14%
21%
28%
35%
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
PAT(Rs.Cr.)
(93)
(28)
(49)
(35)(21)(27)
(47)
(112)
(46)(59)
(120)
(100)
(80)
(60)
(40)
(20)
-
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
EBIT (Rs. Cr)
215
3341 46
(18)
(52)(66)
(2) (3)
(80)
(60)
(40)
(20)
-
20
40
60
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Key Parameters
Particulars Units Year Ended Quarter Ended Sep-07 Dec-07 Mar-08 FY-08 Jun-08 Sep-08
Wireless ServicesSubscribers Base Nos. '000 3,794 4,333 4,683 4,683 5,190 5,698 Prepaid Subscribers as a % of EOP Subscribers % 85% 86% 86% 86% 87% 88%Wireless Subscribers Market Share % 13.6% 13.9% 13.5% 13.5% 14.0% 14.1%Average Revenue per User Rs. per month 265 254 254 268 232 210 Avg. MOU per User # Min. per month 356 313 302 338 288 260 Rate per Minute Rs. 0.74 0.81 0.84 0.79 0.81 0.81 Postpaid Voluntary Churn % per month 0.8% 0.7% 1.1% 0.9% 0.8% 0.6%Postpaid Company Initiated Churn % per month 2.3% 1.7% 1.4% 1.9% 1.2% 2.5%Prepaid Churn % per month 1.1% 1.8% 2.2% 1.6% 0.8% 0.8%VAS + Data Revenues as a % of Wireless Revenue % 9.3% 10.4% 11.8% 10.1% 12.3% 13.4%
Wireline ServicesCustomers Nos. '000 333 363 396 396 427 456 ARPU Rs. per month 1,411 1,284 1,269 1,324 1,260 1,275
# Only Voice & outgoing T2T MOUs considered
Quarter Ended
* Q4-08 revenues & ARPU include USO Subsidy for 3 quarters; Q1-09 revenues include USO Subsidy for 2 quarters; Q2-09 has upfront subsidy, accounting change from 01.04.2008
Other Details
Particulars Units Q1-09 Q2-09Wireless ServicesMinutes on Network Mn Min 4,258 4,241 Census Towns Nos. 295 311 Non-Census Towns and Villages Nos. 7731 7,804 Population Coverage Nos. lacs 608 623 Network Sites Nos. 1757 2,050 Optic Fibre Network Km 6536 6,580
21st Century Infra Tele Ltd.Total Towers Nos. - 1,294 Ground Based Towers Nos. - 381 Roof Top Towers and Others Nos. - 913
Balance Sheet dataGross Debt Rs. Cr 2,781 2,894 Net Debt Rs. Cr 2,753 2,856 Gross Block (including Capital WIP) * Rs. Cr 4,620 4,456
* Rs. 268 Cr fully depreciated assets written off and removed from Gross Block of assets in Q1-09; TDMA assets written off from Gross Block in FY-08.
* Passive Infrastructure assets hived off wef 30th Sep 2008.
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
3,000
6,000
9,000
12,000
15,000
18,000
-
5
10
15
20
25
30
35
40
Market Capitalization & Share Price
Source: BSE
(Fig. in Rs. Crs)
28.4528.45
37.6037.60
21.7021.70(Fig. in Rs.)
TTML Share Price TrendTTML Share Price Trend
5387.195387.197133.447133.44
4116.904116.90
Market Capitalization TrendMarket Capitalization Trend
15626.6215626.62
17600.1217600.12
12860.4312860.43
BSE Index TrendBSE Index Trend(Fig. in Rs.)
H1 Highlights – in Ending
TTML achieved incremental wireless market share of 16.4%; ranked number three in subscriber additions in TTML’s geography
TTML’s Maharashtra circle crossed 3 million subscribers; Mumbai crossed 2 million subscribers; overall TTML crossed 6 million subscribers
Half yearly revenues crossed Rs. 1000 Crs. for the first time
EBITDA margin maintained over 30% for the past three quarters and H1
Investments being made to create Next Generation Networks (NGN)
Tower assets divested to 21st Century Infra Tele Ltd, with effect from 30th September
Mumbai network swapped as per schedule
H1 Highlights – in Ending
High visibility created for the Tata Indicom brand
Increased focus on market segmentation, with products such as Let’s Rock targeted at students
New revenue streams being created through product and service innovation
Thank You