Investor Presentation

Bharti airtel limitedFebruary 2012

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 theapplicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been takencare off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, futureevents or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any informationcontained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in anyjurisdiction or countries were such distribution or use would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon thispresentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You mayalso contact us directly for any questions or clarifications at our end.

This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our generalbusiness plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive andregulatory environment In addition to statements which are forward looking by reason of context the words ‘may will should expects plans intendsregulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends,anticipates, believes, estimates, predicts, potential or continue’ and similar expressions identify forward looking statements.

Actual results, performances or events may differ materially from these forward-looking statements including the plans, objectives, expectations,estimates and intentions expressed in forward looking statements due to a number of factors, including without limitation future changes ordevelopments in our business, our competitive environment, telecommunications technology and application, and political, economic, legal and socialconditions in India. It is cautioned that the foregoing list is not exhaustiveg g

“The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold inthe United States absent registration or an exemption from registration under the U S Securities Act of 1933 as amended Any publicthe United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any publicoffering of securities to be made in the United States will be made by means of a prospectus and will contain detailed information aboutthe Company and its management, as well as financial statements. No money, securities or other consideration is being solicited, and,if sent in response to the information contained herein, will not be accepted.”

Investor Relations :- http://www.airtel.inFor any queries, write to: ir@bharti.in

The Company...Bharti airtel – An Integrated Telco

Wireless Services2G

Enterprise ServicesCarriers

3GRural Market

Corporates

Passive Infrastructure Services

Telemedia ServicesFixed LineB db d

InfratelIndus

DTHBroadbandIPTV

DTHPay per view / HDInteractive Services including

GamingGaming

Fully integrated telecom player offering end to end solutions and entering new geographiesand entering new geographies

The Company…Bharti airtel

No. of circles (India) Today Countries1 5 15 22 19

‘

1996 2001 2003 2004 2010

Fully integrated telecom player offering end to end solutions and entering new geographies

Growth trajectory reflected in the numbers

Single Circle Operator Company Profile Largest integrated private telecom

1996 2011Single Circle Operator Company Profile Largest integrated private telecom

operator

< 25k Customers ~ 221 mn

USD 17 mn R USD 13 b~ USD 17 mn Revenue ~ USD 13 bn

~ USD 2.5 mn EBITDA ~ USD 4 bn

~ USD 1.4 mn Cash Profit ~ USD 4 bn

~ USD 16 mn Market Capitalization ~ USD 30 bn

Continuing on our journey of Value Creation

Note: 1) 2011 financials are as per FY 2011 results. 2) Exchange rate: Financials as of 31st Mar 11 : Rs 44.65

Financials & Positioning

Positioning in the world & in India3rd LARGEST in country wireless operator in the

Key financial metrics

FY 11 (in Mn)

Customers 220.9

3rd LARGEST in ‐country wireless operator in the 

world (1)

LARGEST private INTEGRATED telecom company in Revenue $ 13,319

EBITDA $ 4,472

Cash Profit $ 3 983

India

5th LARGEST Mobile telecom operator in the world

Cash Profit $ 3,983

Net Income $ 1,354

EBITDA Margin (%) 34.6

Amongst the largest providers of Passive 

infrastructure (by towers) (2)

ROCE (%) 10.8

Note: FY11 numbers are as per IFRS as per March11 quarterly report. Exchange rate for Re to $ conversion: 44.65.    (1) 3rd largest wireless operator in the world refers to in‐country (single country) operator based on the number of subscribers. 5th largest mobile operator on basis of number of subscribers.(2) Through its subsidiary Bharti Infratel & Indus Towers in which Bharti Infratel owns 42%  stake.

Latest Results – 2Q’12

Key operating and financial metrics Continued Strong Performance

Q3 FY 12* Y‐on‐Y

Customers 243.3 mn 17%

Wireless CMS 19.7%

Wireless RMS 30.0%

Total MOU carried in Qtr 253 bnRevenue $ 3,649 mn 17%

EBITDA $ 1,177 mn 19%

Total MOU carried in Qtr 253 bn 

Balance sheet strength:

Assets $ 31.9 bn

Cash Profit $ 1,021 mn 21%

Net Income $ 200 mn ‐22%

Net debt  $ 12.7 bn

Net debt to EBITDA  2.6 Times

(annualized)EBITDA Margin 32.2%

ROCE 7.3%

Continues to be FCF positive on at South Asia 

Level.

•Includes  full quarter numbers for Africa• (a) Closing Exchange rate as of 31sr Dec 2011: 53.27 . (b) Average Exchange rate as on 31sr  Dec 2011 : 50.63  •**RMS as per  Sept  quarter released by TRAI (IIFL report dated 24th Nov’11)

Performance dashboard - 3 line graph

184,767 70.8%69.9% 68.6%

70 0%

80.0%

180 000

190,000

157 721162,930 169,749

172,698

71.2% 70.9%

60.0%

70.0%

170,000

180,000

157,721

46.9%44.8% 44.6% 44.5% 45.4%

40.0%

50.0%

150,000

160,000

30.0%140,000

Q3

FY11

Q4

FY11

Q1

FY12

Q2

FY12

Q3

FY12

Productivity Indicators = growing revenues + cost efficiencies + capital productivity

Total Revenue (Rs mn) LHS Opex to Total Rev (RHS) Capex Productivity (RHS)

The above chart is for Airtel Consolidated including Africa

Wireless Services

Indian Market

Overall Telecom Market Wireless Market

Population 1 2 billion Sub Base   c.893.8 mn Population  1.2 billion

→ Relatively large youth population

Telecom penetration c.76.7% 

Wireless Penetration   c.74.0%

Operational metrics per month(~926.5 mn telecom subs) 

Sub number should go upto 1 Billion by 2015

Broadband penetration  40.2% (13.1 mn)

Usage per user 345 min

ARPU ~ US$ 3.51

Rate per minute ~ US$ 0.01→ Govt. target to reach 20 mn. Broadband subs by 2011

VAS  ~ 13.3%

Lot of opportunity ahead….

Note: (1) Subscriber numbers and wireless penetration numbers as on December 31, 2011 are as per TRAI (2) Other indicators on the slide are based on Global Wireless Matrix 3Q11 dated 28th September 11 by Merrill Lynch, and reflective of Industry numbers.

Rapidly Growing Indian Wireless Market

Net Adds in Dec 9.5 Mn… greater than over last 3months average run rate of 6.2 Mn S-curve triggered

70%

80%

90%

700

800

900

20

25

Closing Subs Net Adds

30%

40%

50%

60%

%

300

400

500

600

700

10

15

20

0%

10%

20%

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019-

100

200

300

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-06

-07

-07

-07

-08

-08

-08

-09

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5

India ‐ Fastest Growing Market in the World

Feb-

Jun-

Oct

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India  Fastest Growing Market in the World

Note: (1) Actual Data as per Industry Association Releases and Industry Estimates in India.  

Wireless Market Structure in India

Subscriber Trends Customer Market Share – CMS (%)

176

150152180

200

19.7%20.3%21%

23%

25%

150 148

102 106

83

128

152

126 124

9282 84 92

60

80

100

120

140160

(mn)

11.5%

9 3%

19.7%

16.8% 16.5%

11.9%

14.3%

16.7%16.5%

12.2%

10.9% 11.2%12.2%

11%

13%

15%

17%

19%

23 24 2310

2536

-

20

4060

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CMS(Dec'11) CMS(Dec'10)

• Airtel continuously consolidating its market leadership position despite intense competition• Airtel current monthly net adds at 0.96 million vs. 3.1 million a year ago• Airtel ranks 1& 2 in 16 circles in terms of number of subscribers• Over 65% of net adds coming from B&C circles (rural India)

Airtel Continues to lead on Revenue Market Share 

Note: Based on subscriber data for India as on  December31 2011 as per TRAI press release. 

Airtel…Performance Indicators (Operational)

Customers & Market Share Prepaid/PostpaidCustomers & Market Share Prepaid/Postpaid

98.2% 98.1% 97.3%

93.7%96.2%

94%

98%

102%

20.3% 20.0% 19.9% 19.8% 19.8%

120

180

18%

22%

96.2% 96.3% 96.3% 96.3% 96.3%

78%

82%

86%

90%

152.5 162.2 169.2 172.8 175.7

0

60

6%

10%

14%

ARPU & RPM MoU/Sub/Month & MON

Q311 Q411 Q112 Q212 Q312

Prepaid Subs Prepaid Net Adds

0Q311 Q411 Q112 Q212 Q312

6%

Customers (mn) CM S (%)

198 194 190 183 187

40

50

60

200

250

300449 449 445 423 419

205,018

218,190 228,331 242,683

227,115440

450

200,000

250,000

44.19 43.13 42.76 43.18 44.56

-

10

20

30

Q311 Q411 Q112 Q212 Q3120

50

100

150

400

410

420

430

Q311 Q411 Q112 Q212 Q3120

50,000

100,000

150,000

RPM (Paise) ARPU (INR)

M oU/Sub (M in) Total minutes on Network (M n M in)

Current positioning and way forward…

Leadership Positioning Growth strategy and plans

RevenueRevenue New RevenueRevenueRevenue New Revenue Streams

Revenue size (>$ 12Bn)

Revenue Market Share

Changing face of growth through M‐Com,  M‐entertainment & 3G

Cost

Non financial Maximizing

Net AddsImproving cost efficiencies

L t t GSM t kDriven by rural strategy

vitals usage

BrandDistribution Churn lower than industrySpectrumMix (900/1800 MHz)

Lowest cost GSM network

Increasing the usage through U&R driveWallet share  

Spectrum Mix (900/1800 MHz)

Telemedia Services

A Snapshot

Largest private operator having presence in the voice , broadband , IPTV and data.

Focus on SMB segment & Broadband at Homes

Key Performance Indicators 

1. Voice (wire‐line) and Data (DSL) Presence in 87 top cities of India.

2. Target Segment : Retail and Small and Medium Enterprises.

3. Customer base: 3.3 million (end Dec 2011)

4. Broadband (DSL with speeds>256 kbps) penetration at 40.2% of customer base.

5. Average ARPU for Quarter ended  Dec’11 $ 18.1 per month.

6. Segment contributing to 7% of overall revenues of the company.

7 EBITDA i f 38 8%7. EBITDA margin of over 38.8%.

Broadband revolution to follow wireless revolution in India

SMB opportunity across ICT stream

E i S iEnterprise Services

A Snapshot

Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers

Corporates: Single point of contact for all telecommunication needs for Top 2500 corporate customers, 

providing full suite of voice, data, and managed communications solutions  p g f f g

Carriers: Wholesale voice and data services to over 130 domestic and 450 international 

telecommunications carriers, as well as ILD and NLD carriage for Airtel’s own customers 

E t i ti l d i t ti l i f t tExtensive national and international infrastructure 

Pan‐India network with 154,744 Route kms of optical fiber, over 4,150 MPLS and SDH POPs

Access network (terrestrial) in 87 cities, Wimax network in 143 cities, and over 1,500 local POIs 

International network with 225,000 Route Kms, connecting over 50 countries and 5 Continents.

Key Performance Indicators  (Q3‘12)

NLD Minutes Carried: 20.6 Billion ; ILD Minutes Carried: 3.5 Billion 

Revenue:  Rs.11,881 Million (9% Segment Contribution Share)

EBITDA:  Rs. 2,008 Million  (16.9% EBITA Margin) IT A: Rs. ,008 Million ( 6.9% ITA Margin)

Emerging Growth EnginesEmerging Growth Engines

Passive InfraAfricaAfrica

Financial Performance – Passive Infra

Revenue EBITDARevenue EBITDA

490 493

509

486 482480

510

180182

192

183189

180

200

38.6 37.0 37.7 37.5 37.3

360

390

420

450

Q311 Q411 Q112 Q212 Q312120

140

160

180

Q311 Q411 Q112 Q212 Q312

100Q311 Q411 Q112 Q212 Q312

Focus on tenancy enhancement…driving Revenue & Profitability

The above nos for Revenue & EBITDA are in IFRS as per Quarterly Report & includes proportionate share (42%) in Indus . 

Operational Performance – Passive Infra

Infratel Indus

Towers (nos) & Sharing Factor Towers (nos) & Sharing Factor

34,000 1.901.911.891.871.83

1.80109,000 2.00

33,20333,05632,94232,79232,424

1.811.791.77

1.731.68

32 000

33,000

1 40

1.50

1.60

1.70

1.80

109,101108,998108,922108,586107,789

97 000

99,000

101,000

103,000

105,000

107,000

1 20

1.30

1.40

1.50

1.60

1.70

1.80

1.90

Sharing Revenue per Sharing Operator per Month (Rs) Sharing Revenue per Sharing Operator per Month (Rs)

32,000Q311 Q411 Q112 Q212 Q312

1.40

No of t owers Shar ing Fact or

97,000Q311 Q411 Q112 Q212 Q312

1.20

No of t owers Sharing Fact or

30,847 30,50131963

3111232,272

25,000

30,000

35,00037,859

36,599 36203 37,11737,623

33,000

37,000

41,000

15,000

20,000

Q311 Q411 Q112 Q212 Q312

Sharing Revenue per Sharing Operat or per mont h

25,000

29,000

Q311 Q411 Q112 Q212 Q312

Sharing Revenue per Sharing Operat or per mont h

Aims to enhance the tenancy ratio & be the preferred choice of vendor for all existing and new operators

Transaction Rationale

Shareholding and Management Control

Brand – ‘Airtel’

100% Cash Transaction

Focus on CoreMiddle EastGlobal

Clean / certaintyof transaction

Brand Airtel Middle East Operators

Global Stature

Emerging Market Characteristics

St Pl tf

ManageableDeal Size

Strong Platformfor Future Expansion

Low Competitive Intensity

Diversification of India Risk

Avoid Greenfield

Speed inTransaction

Repayment of Debt

Significant Synergies

Avoid Greenfield Debt

The transaction meets the objectives of Airtel with long term strategic benefits and creates tremendous shareholder value

Differences between the two markets

Mobile Penetration 40%77%

India Africa(1)

Average Number of Competitors 3‐510‐12

Business Model

Minutes of Usage

Low usage, high pricing model

~125

High usage, low pricing model

~419Minutes of Usage

ARPU (US$)

125

~$7.1

419

~$3.7

ARPM (US cents ¢) 5.7¢0.9¢

A d th f h t itAnd therefore huge opportunity space

Source: Global Insight, annual / quarterly reports.1. Data pertaining to the 16African countries where Zain Africa has operations.

Another Growth Engine - Africa

Customer  Base : 50.9 Mn

Performance Indicators (CY 2011):

Revenue: $ 2,878 Mn

EBITDA: $ 6,30 Mn

Prepaid Base: 99.3%

→one of the highest in the→one of the highest in the world

Usage per sub per month: 125 Minutes

→one of the lowest o e of e o es

ARPU: ~ US$ 7.1

Rate per minute: ~ US¢ 5.7

→ one of the highest

VAS: ~ 8.0%

→One of the lowest

Note: Above numbers based on Quarterly report ended 31 Dec ,2011. 

Recent Honors

Bharti airtel – Leadership in business Recent HonoursEconomic Times Telecom Awards 2011

Innovative Product Value Added Service 

Customer Experience Enhancement 

Frost & Sullivan 2011 Asia Pacific ICT Awards

Enterprise Telecom Service Provider of the Year

Wholesale Data Service Provider of the year

Mobile VAS Provider of the Year

India’s Most Innovative company  ‐Wall Street Journal 

Telecom Operator award 2011 ‐Won in 5 categories.

Most Admired companyBest VAS provider

Best National Mobile operator

Operator with Rural performanceBest Enterprise services 

DSCI Excellence Award 2011 for Security in Telecom‐ ‘Security Leader of the Year' 

Bharti Airtel rated as India’s Best Enterprise Connectivity Provider‐ Users choice award Instituted by PC Quest

Sunil Bharti Mittal :     – Global Game changer at Economic Times Telecom Awards 2011

– Global Telecom Leader ‐ Voice & Data magazine

Akhil Gupta, Deputy Group CEO and MD  ‐ CFO India Hall of Fame by CFO India

Manoj Kohli, CEO( International) & Joint MD ‐ Telecom Man of the year ‐ Tele.net

Star News Brand Excellence Award in the Telecom Sector 2011

thank youthank you