idea cellular limited - vodafone idea · 2020. 9. 8. · this presentation is not being used in...

Idea Cellular Limited

Investor Presentation

Disclaimer

The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwiseshall be subject to the applicable laws and regulations as amended from time to time. There is no representation that allinformation relating to the context has been taken care of in the presentation and neither we undertake any obligation as to theregular updating of the information as a result of new information, future events or otherwise. We will accept no liabilitywhatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation orfor any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction orcountries were such distribution or use would be contrary to the applicable laws or regulations. It is advised that prior to actingupon this presentation, independent consultation / advise may be obtained and necessary due diligence, investigation etc maybe done. You may also contact us directly for any questions or clarifications.

This presentation contain certain statements of future expectations and other forward-looking statements, including thoserelating to our general business plans and strategy, our future financial condition and growth prospects, and futuredevelopments in our sector and our competitive and regulatory environment. In addition to statements which are forwardlooking by reason of context, the words‘may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue’ and similarexpressions identify forward looking statements.

Actual results, performances or events may differ materially from these forward-looking statements including theplans, objectives, expectations, estimates and intentions expressed in forward looking statements due to a number offactors, including without limitation, future changes or developments in our business, our competitiveenvironment, telecommunications technology and application, and political, economic, legal and social conditions in India. It iscautioned that the foregoing list is not exhaustive.

This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be usedas a basis for any investment decision.

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

Indian Wireless Sector – Revenue Trend

263.8 273.7285.9 288.9

302.4 309.2 318.7 319.3 321.440.6

43.146.0 46.9

50.854.4

55.8 53.4 55.8

304.4316.7

331.9 335.8353.2

363.6374.4 372.7 377.2

0

35

70

105

140

175

210

245

280

315

350

385

Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13

Others Idea

*1 USD = INR 50

Source: Data released by the TRAI & Company estimates; revenue for UAS and Mobile licenses only

Idea 14.8%

Others 85.3%

Idea 12.7%

Others 87.3%

Q3FY10

Q3FY13

Sector Gross Revenue (INR bn)

In USD (bn)*6.09 6.33 6.64 6.72 7.06 7.27 7.49 7.45 7.54

Idea - Increase in Revenue Market Share

3

4

Idea – An Overview

A pan India 2G-GSM service provider.

Provide 3G services in 20 service areas.

Third largest operator in India, by Mobility Revenues#

and VLR subscribers.

Minutes on network ~ 1.44 bn per day(Q3FY13), placing it among the top 10 operatorsglobally

Leads the industry, in terms of active subscribers, asmore than 98% of reported subscribers are on VLR

Owns 9,325 towers, besides 11,094 towers transferredto Indus under IRU

Over 71,600 km optical fibre cable (OFC) network

Idea’s NLD carries ~96% of captive outgoingminutes

Idea’s International Long Distance Operations (ILDOs)carry 98% of captive outgoing minutes. Total Minutescarried on ILD ~ 1,294mn in Q3FY13

Idea ISP carries ~76% of it’s own data traffic. Totaldata traffic carried is over 100 TB per day

# Data released by the TRAI & Company estimates; revenue for UAS and Mobile licenses only

900 MHz Spectrum

1800 MHz Spectrum

5

2.7%

4.7%5.2% 5.3% 5.6%

7.0%

8.7%9.3%

9.7%

0%

2%

4%

6%

8%

10%

12%

Har. Pun. UPW Ker. M.P. Guj. Kar. A.P. Maha.

900 MHz spectrum band provides capex/opexadvantage, compared to 1800 MHz

900 MHz spectrum also accompanied by earlymover advantage

Idea holds 900 MHz spectrum in 9 serviceareas, covering~ 48% of national revenue and ~73% of Idea’s revenue

~ 58% of national revenue base (excl. metros*)

Idea’s spectrum profile is very attractiveacross all private operators

Service areas share of gross revenue (excl. metros)58%

Competitiveness Lever 1 - Spectrum

Source: Data released by the TRAI & Company estimates for Q3FY13, revenue for UAS and Mobile licenses only * Metros as Mumbai, Delhi and Kolkata

6

Competitiveness Lever 2 - Scale within Service Area

Service Area (900 MHz)

Revenue Mkt Share 1

(RMS)Rank 2

Kerala 34.2% 1

M.P. 33.3% 1

Maharashtra 27.3% 1

UP (W) 27.0% 1

Haryana 22.3% 2

Punjab 20.8% 2

Gujarat 18.1% 2

A.P. 18.9% 2

Karnataka 9.4% 4

Total 22.6% 2

In 9 service areas, comprising ~ 48% of national revenue market & ~73% of Idea’s revenue, Idea’s competitiveness is intrinsically strong based on a) 900 MHz spectrum and b) scale of operations

1Based on gross revenue for Q3FY13, as released by TRAI & Company estimates2Based on revenue market share

# 1 Player# 2 Player# 1 Player# 2 Player Improved combined revenue market share

from 21.0% in Q3FY11 to 22.6% in Q3FY13

7

1800 MHz Operations (6 Service Areas)Emerging Stronger – Ranked #3

Service AreaRevenue Mkt Share 1

(RMS)Rank 2

UPE 12.2% 3

Rajasthan 11.0% 3

Delhi 10.9% 3

Bihar 9.9% 4

H.P. 9.1% 5

Mumbai 8.4% 5

Total 10.4% 3

Idea has increased its combined RMS from9.0% in Q3FY11 to 10.4% in Q3FY13, improvingits position from 4th to 3rd ranked operator, inthese service areas

These service areas cover ~32% of all Indiarevenue and ~22% of Idea’s revenue

With continuous improvement in RMS, Idea isemerging stronger

1Based on gross revenue for Q3FY13, as released by TRAI & Company estimates2Based on revenue market share

8

1800 MHz Operations (7 New Service Areas)Focus On Optimisation, Not Maximisation

In Nov’12 1800 MHz spectrum auction Ideaacquired 5 MHz (6.25 MHz in West Bengal) ofliberalized spectrum (can be used for 2G,3Gor 4G) in these service areas, for 20 years foran amount of Rs. 19.9 bn.

Leverage synergies of pan India operationsi.e. roaming, NLD, ad spend, commonnetwork elements, etc.

Focus on operational and financial goals, notleague tables

Combined RMS of 3.3% in Q3FY13.Inevitably, as the number of operators in theIndian market shrink, these new market willoffer good growth potential

3G Footprint

Idea’s 3G Service Areas

Roaming arrangements with other operators

9

Idea launched 3G services in 10 serviceareas, out of 11 service areas where it won3G spectrum

Having 15,545 3G sites in these serviceareas (Q3FY13)

Launched 3G services under roamingarrangements for the service areas ofMumbai, Bihar, Karnataka, Rajasthan, WestBengal, Delhi, Kolkata, Tamil Nadu (incl.Chennai), Assam and North East

With these arrangements Idea currentlyoffers 3G services in 20 service areas

Around 4.1 mn 3G subs with data ARPU ofRs. 97

Existing 21mn 2G EDGE data subscribers &growing, offer excellent long term 3Gupgrade opportunity

Note :For Punjab service area, authorisation for commercial use of 3G spectrum is awaited

10

Idea – Long Term Shareholder Value

Cover ~48% of national revenue market

Strong position in these service areas

900 MHz spectrum accompanied by early mover advantage

900 MHz spectrum provides capex and opex advantage

900 MHz( 9 Service Areas )

Leverage spectrum and scale to enhance

leadership

Pan India Footprint

Leverage synergies of scale and footprint

Emerging Stronger in 6 service areas of

UP(E), Rajasthan, Delhi, Bihar, H.P. and Mumbai

Focus on operational & financial goals, not league tables in 7 New

service areas

Calibrated Capex with infra sharing

1800 MHz( 13 Service Areas )

Sustainable and profitable growth

3G Value Drivers

Market power to drive new business: Ranked #1 or #2, in 8 out of 11 service areas, where it won 3G

spectrum

Protecting existing business value:11 service areas cover ~74% of company revenue and ~ 49% of

Industry revenue

Roaming arrangements: Ability to provide 3G service in almost all

parts of India

Other value: Besides enhanced data performance, High 2G spectrum

utilisation makes the 3G spectrum also valuable for voice

Best placed to exploit 3G

11

The Indus Advantage

Indus Service Areas

Indus Share Holding

Provides passive infrastructure services in15 service areas

Largest independent tower company in theworld with more than 111,200 towers

Indus benefits from assured tenancy frompromoters (combined revenue marketshare of ~67%*), apart from other operators

Idea benefits by reduced capex, speed tomarket, and embedded value ofshareholding

Bharti Infratel Ltd 42%

Vodafone Essar Ltd

42%

Idea Cellular Ltd** 16%^

Indus Share Holding

**through Aditya Birla Telecom Ltd.

* Data released by the TRAI & Company estimates ; revenue for UAS and Mobile licenses only

^In addition, Idea also own more than 9,300 towers

12

Idea – A Power Brand

13

World Class Operations and Cost Management

*ARR is based on service revenue (exclusive of infrastructure and device revenues)

** Includes Depreciation & Amortisation, but excludes Interest & Finance Cost

Paisa

50.7 54.0 55.4 53.5 56.1

114.0124.0

130.9125.6

132.243.3

42.241.2 41.3 41.1

33.9 33.8

32.5 32.5 32.5

40.0 39.6

38.3 38.8 38.7

29

32

35

38

41

44

0

34

68

102

136

Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13

Revenue (INR bn) Minutes (bn) ARR* Pre-EBITDA Cost/Min Operational Cost/Min**(Pre- EBIT)

14

Strong Balance Sheet to Support Strategic Intent

Note: Figures for Idea including its 100% subsidiaries and excluding Joint Venture Spice (till February 28,2010) and Indus.

Q4 Q4 Q4 Q3FY10 FY11 FY12 FY13

Gross Debt 65,264 105,575 120,957 134,447

Cash & Equivalent 14,005 13,902 1,406 17,624

Net Debt 51,259 91,673 119,550 116,822

Net Worth 114,101 122,767 129,077 140,204

Cash Profit 7,657 9,031 10,135 11,085

Financial Ratios

Net Debt to Net Worth 0.45 0.75 0.93 0.83

Net Debt to Annualised EBITDA 1.54 2.41 2.48 2.22

ROCE 8.7% 6.1% 6.7% 6.2%

INR Million

15

Promoter Group, 45.9%Foreign

Holding, 45.6%

Indian Others, 8.5%

As on 31st Dec’12Shareholding

PROMOTERS’ HOLDING

ADITYA BIRLA NUVO LIMITED 25.3%

BIRLA TMT HOLDINGS PVT LTD 8.6%

HINDALCO INDUSTRIES LIMITED 6.9%

GRASIM INDUSTRIES LTD 5.2%

TOP 5 SHAREHOLDERS

TMI MAURITIUS 14.0%

P5 ASIA INVESTMENTS (MAURITIUS) 10.0%

AXIATA INVESTMENTS 2 (INDIA) LTD. 5.9%

NWB PLC AS DEP. OF FIRST STATE 2.9%

LIFE INSURANCE CORP. OF INDIA 1.5%

Appendix

17

Key Trends - 1* (Quarterly)

50.754.0

55.453.5

56.1

30

35

40

45

50

55

60

Q3 FY12 Q4 FY12 Q1 FY13 Q2 FY13 Q3 FY13

Cash Profits

EBITDA

12.0 12.1

12.9 12.6

13.2

8.00

9.00

10.00

11.00

12.00

13.00

14.00


Rs bn

Gross RevenueRs bn

Subscribers

106.4112.7

117.2 115.5 113.9

98.9105.3

108.4 109.1 111.9

60

70

80

90

100

110

120


Subscriber VLR Subscribers

9.5

10.110.5

12.3

11.1

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00


Rs bn In mn

*Represents Idea and its 100% subsidiaries

YoY Growth 10.8% YoY Growth

9.9%

YoY Growth 17.3% YoY Growth^

13.2%

^VLR Subs

18

Key Trends – 2* (Quarterly)

114.0

124.3

130.9125.6

132.2

75

85

95

105

115

125

135


VAS and Data as a % of Revenue

Realized rate per minute43.3 42.2 41.2 41.3 41.1

20.00

25.00

30.00

35.00

40.00

45.00


paisa

Minutes of use on Network (QoQ)

bn - Minutes

Cell Sites

80,637 83,190 83,860 85,779 87,662

10,90212,825 13,363

14,46715,545

45000

65000

85000

105000


2G Sites 3G Sites


4.5% 5.4% 5.7%

13.7% 14.3%

10.0%10.2%

8.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13

VAS% Data %

14.5%15.6%

14.6%

19

Financial Matrix (Standalone)*

67.4

99.7 121.4

156.4

196.8

165.0

0

25

50

75

100

125

150

175

200

FY08 FY09 FY10 FY11 FY12 9m FY13

19.8

23.5

29.0 30.9

36.1 33.9

5

10

15

20

25

30

35

40


10.4 9.6

10.3

8.4

6.0 7.4

0

2

4

6

8

10

12


Robust Growth in Top Line

INR bn

22.727.5

30.5 33.3

45.2

38.7

5

10

15

20

25

30

35

40

45

50


Robust Growth in EBITDA

INR bn

Net Profits

INR bn

Robust Growth in Cash Profits

INR bn


20

Financial Matrix (Consolidated)*

67.4

101.5 124.5

155.0

195.4

164.0

0

25

50

75

100

125

150

175

200


19.8 23.5

30.6 34.1

40.3 35.5

0

10

20

30

40

50


Robust Growth in Top Line

INR bn

22.7

28.4

34.137.9

50.9

43.3

15

20

25

30

35

40

45

50

55


Robust Growth in EBITDA

INR bn

Net Profits

INR bn

Robust Growth in Cash Profits

INR bn

*Represents Idea, its 100% subsidiaries and Joint Ventures

10.4 8.8

9.5 9.0

7.2 7.0

0

2

4

6

8

10

12


21

Thank You

idea cellular limited - vodafone idea · 2020. 9. 8. · this presentation is not being used in...

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