rcom investor ppt november 2010

8/8/2019 RCOM Investor Ppt November 2010

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Forward looking statements - Important Note

This presentation and the discussion that follows may contain "forward lookingstatements" by Reliance Communications Ltd ("RCOM") that are not historical in nature.

RCOM

These forward looking statements, which may include statements relating to future

results of operation, financial condition, business prospects, plans and objectives, are

based on the current beliefs, assumptions, expectations, estimates, and projections of the

directors and management of RCOM about the business, industry and markets in which

RCOM operates. These statements are not guarantees of future performance, and are

subject to known and unknown risks, uncertainties, and other factors, some of which arebeyond RCOM's control and difficult to predict, that could cause actual results,

performance or achievements to differ materially from those in the forward looking

statements. Such statements are not, and should not be construed, as a representation

as to future performance or achievements of RCOM. In particular, such statements

should not be regarded as a projection of future performance of RCOM. It should be

noted that the actual performance or achievements of RCOM may vary significantly from

such statements.Wireless | Infratel | Globalcom | Enterprise | Home2 of 43


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Contents

Reliance Communications - an integrated telco

Wireless

Globalcom

Key takeaways Enterprise

HomeWireless | Infratel | Globalcom | Enterprise | Home3 of 43


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Reliance Communications

Journey so far .FY 2007 & FY 2008

FY 2005 & FY 2006Mobile

FY 2009 & FY 20103GMobile

CDMA & GSM Services

IDC

World's

Largest N/WGlobalcom

NGNEnterprise

GlobalcomInfratel

2L slots

Deepest backhaulMobileGlobalcomEnterpriseHome

FoundationGrowthIntegration

Evolution path towards a profitable integrated Telco


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Wireless | Infratel | Globalcom | Enterprise | Home4 of 43


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Current position of our businesses

Wireless #2 in India, #4 globally (single country), dual technology

Globalcom Largest global private submarine cable network, blue-

chip global clientsEnterprise One stop shop for all large corporates and SMBs for

communications, networking and IT infrastructure needsInfratel 200k+ slots, unique ability to provide space and

connectivityHome Rapidly growing national DTH business, rich content

access

Strong market presence in every businessWireless | Infratel | Globalcom | Enterprise | Home5 of 43


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Strategy for focused and profitable growth

bl th Address mass mobility market thru' GSM with special focus on rural distribution Consolidate data market leadership with high ARPU high speed datacards

Increased revenue from new service streams (share of VAS & In-roaming revenue)

Maximize revenues from existing assets of Towers, OFC & Ducts

Huge potential of value unlocking for Reliance Communication shareholdersUK

LondonNetherland

Austria

CanadaUSABelgium

France

Spain

NetherlandGermany

GermanyAustria

Spain

FranceRussiaBelgiumSwitzerlanddJapan

SwitzerlandItaly l Bahrain

Qatar

QatarOman

ItalySaudi Arabia

UAE

Pakistan

PakistanChina

Japan

South Korea

Hong KongBangladesh

Malaysia

Taiwan

MalaysiaTaiwanHong Kong

Bahrain IndiaOman

Saudi ArabiaSudanUAESri LankaNigeria

South Africa

South AfricaSouth KoreaNewZealand

Australia

Sign long term contracts with existing and new operators to provide pan-Indiainfrastructure and bandwidth

Ramp up Managed Services business; Complete NGN Mediterranean and continue to

maintain leadership in the Carriers Carrier marketNewZealand

Increasing IDC capacity and launching new high margin product/service lines

Expanding Managed Services portfolio for higher share of customer's wallet and to

increase stickiness of our products

Aggressive acquisitions to build the subscriber base for long-term revenue Rigorous program management framework for capex and opex cost efficiencies, esp.

ssleeWir

a

rInf

lte

lobaGl

com

rpre


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Set-top box and ContentWireless | Infratel | Globalcom | Enterprise | Home6 of 43

i

se

Ent

eHom


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Reliance Communications : Recent initiatives

3G license in 13 circles; Pan-India data leadership

dihiWon 13 circles with a spend of Rs.

8,585cr

Geographical mix of top 3 metros, 4

"B" circles & 6 "C" circles

Marginal capex for 3G upgrade on

our EDGE GSM network

2G Circles

2G + 3G Circles

Delhi & Mumbai

Nationwide EVDO/ 3G footprintWireless | Infratel | Globalcom | Enterprise | Home7 of 43


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DigiCom acquisition - Key highlights

RCOM acquired DigiCable, India's No. 1 Cable TV service provider

Combined entity comprising RCOM DTH and DigiCable to be named "RELIANCE

DigiCom"

Game changing move to usher Digital TV and ultra high speed broadband revolution

across addressable universe of over 100 Mn. homes in India

Offering over 500 Digital quality and 100 HD channels; and ultra high speed

broadband access upto 100 Mbps speeds

Asia's largest and world's 5th largest Pay TV service provider

Reliance DigiCom to start with combined subscriber base of 11 million homes

Market leadership in 110 towns, including top 6 metros, with 16% subscriber market

share of pay TV homesWireless | Infratel | Globalcom | Enterprise | Home8 of 43


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Reliance DigiCom - Market position

India Top 5Rank Players

(India & Globally)

Global Top 5

1

2

3

4

5

Reliance + Digi

Sun + SCV

Hathway

Dish TV +

WWIL


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DENSubscriber

Base (Mn)

11

9

8

8

7

Rank

1

2

3

4

5

Players


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Comcast

DirecTV

Dish Network

Time Warner

Reliance + Digi

Subscriber

Base (Mn)

24

19

14

14

11Note : Market position, post acquisition.Wireless | Infratel | Globalcom | Enterprise | Home9 of 43


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Financial Highlights

Key Financial Parameters (Rs. Mn)RevenueEBITDANet Profit229,485221,32393,05060,44981,98954,011190,67878,20546,550144,68357,20831,637107,66424,7624,438

FY06FY07FY08FY09FY10FY06FY07

FY08FY09FY10FY06FY07FY08FY09FY10

Consistent & substantial increase in profitabilityWireless | Infratel | Globalcom | Enterprise | Home10 of 43


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Cost management (%(% of revenue)Margins

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

34.1%31.5%31.9%32.4%29.9%25.6%27.2%31 5%.5%

Network expenses

- Increase in network cost due to

expansion of coverage & GSMlaunch

eunveeR

laotT

fo

%


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- Opex of other new businesses like

DTH, Vanco, etc

SG&A expenses

- Focused marketing & various cost

control measures

Staff cost

Access charges & LF

- MTC reduction

- Expansion of fiber optic assets &

increase in PoIs16.5%6.7%6.9%7.0%11.8%14 3%.3%14.6%6.9%15.7%17.6%19 0%.0%18 8%.8%3Q FY104Q FY101Q FY112Q FY11

inspite of launch of multiple new businessesWireless | Infratel | Globalcom | Enterprise | Home11 of 43


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Contents

Reliance Communications - an integrated telco Wireless

Globalcom




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Wireless Business

Industry outlook : India's growing mobile marketIndustry Subscriber Net Additions682 Mn

17

1817

Customer Market Share (September, 2010)

Others

4.4%6.8%

4.4%

Aircel17.1%1817

Vodafone21.3% Airtel

451

Mn16

2019201819171515

17.2%

Reliance10.6%

BSNLAug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

11.6%


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TATA10.9%

Idea

682 Mn wireless subscribers at the end of September 2010Source: TRAI

India, the world's fastest growing market, has fifteen service providersWireless | Infratel | Globalcom | Enterprise | Home13 of 43


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Wireless Business

Indian telecom : Fast changing landscape

Operators

Hyper competition - Number of players increased from 7 to 15 in last one year

Price WarsMultiple product offerings with innovation on price and tariff cuts only

Call Rates20072010

Intense Price cuts reduced the call rate from Rs.2/- in 2007 to just 1p in 2010Wireless | Infratel | Globalcom | Enterprise | Home14 of 43


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Wireless Business

Strengths of Wireless Business1

2

Dual technology advantageData leader (HSD / EVDO)

345100 Million+ customer base

3G License winner in 13 circles

(All 900 Mhz circles covered)

Integrated Telco with segmented play

All this with only 7 years of existence in industry as compared to 15+

years for competitionWireless | Infratel | Globalcom | Enterprise | Home15 of 43


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Wireless Business

India's billion people can now expect an unbeatable choice

and value proposition across.1.Coverage2.Customer choice3.HSD/Internet on the move4.Product & Service innovations5.Distribution & Reach

Unmatched customer propositionWireless | Infratel | Globalcom | Enterprise | Home16 of 43


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Wireless Business

Coverage

24,000Towns

600,000 Villages

1 Billion Indians

VoiceDataVASCDMAGSM

Seamless coverage wherever you goWireless | Infratel | Globalcom | Enterprise | Home17 of 43


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Wireless Business

Customer ChChoice

Mobility

117 million

Happy customersWireless DataFixed WirelessMarket leadership

in all segments

**CDMA

PCO

shall replicate success with nationwide GSM serviceWireless | Infratel | Globalcom | Enterprise | Home18 of 43


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Wireless Business

HSD/Internet on the Move

Fastest internet broadband service of up to 3.1

Competitive differentiation

Mbps in India's top 84 cities

Seamless handover & connectivity through CDMA1X in over 24K towns and 6 lakh villages covering

90% of the Indian population

Wide reach compared to limited reach of wireline

networks

- Broadband coverage expansion the wireless way

ARPUs are 3-4 times higher than the voice usage

Increased capacity utilization in CDMA network

Easy availability & instant activation within

minutes compared to few weeks or even months in

case of wired broadband

Fastest internet connectivity under wireless platform


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Wireless Business

Product & Service innovationsGroup Talk

Tune MakerSimply MusicNokia Life ToolsBubbly (voice twitter)HandsetsISD PacksMobile NetWireless | Infratel | Globalcom | Enterprise | Home20 of 43


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Wireless Business

Distribution & Reach

World-class design , fit out & ambience

at 2,000 exclusive retail i l showrooms on

High streets/Malls

High quality reach & national footprint

through 5,000 distributors & 1.2million retailers

5 ,000+ Direct & indirect outbound sales

force to cater to customers at their

premises

Dimensioned to handle over 35 mnsales transactions annually

One of the largest retail distribution network in the industryWireless | Infratel | Globalcom | Enterprise | Home21 of 43


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Wireless Business

Financial Performance

Revenue (Rs. Mn)40,22 22540,90 90041,52 52841,61 61340,000

EBITDA (Rs. Mn)11,81511,98 98912,54512,10 10112,0008,00020,0004,000003QFY104QFY101QFY112QFY11

EBITDA Margin3QFY104QFY101QFY112QFY1180%60%

40%31.2%28.9%28 9%.9%29.1%20%0%3QFY104QFY101QFY112QFY11

Short term impact due to competitive intensity and tariff rebalancingWireless | Infratel | Globalcom | Enterprise | Home22 of 43


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Wireless Business

Revenue Per Minute (RPM) trendPlayer 1

Player 2

RCOM

2Q'10

0.56 56

0.56

0.47 473Q'10

0 52.52

0.51

0 45.45

4Q'10

0.47 47

0.47

0.44 44

1Q'11


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0 45.45

0.44

0 44.44

2Q'11

0.44 44

0.42

0.44 44Change

over last 5 Qtrs.

-21.4%

-25.0%

-6.4% 4%0.60

Revenue Per Minute (Rs.)0.550.50

0.450.402QFY103QFY10

RCOM

4QFY10

Player 1

1QFY11

Player 2

2QFY11

RCOM, the only operator which has held on to the RPM over last 3 quartersWireless | Infratel | Globalcom | Enterprise | Home23 of 43


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Contents


Globalcom




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Globalcom Business

Business OverviewData

Among Top 10 Enterprise To 10 Enterprise

Access Provider in the US

Among Top 5 Enterprise

Solution provider in US

and Europe

# 1 Carrier Bandwidth

service providerVoice

# 1 Retail brand for

calling India from the

U.S.

# 1 Carrier's carrier for

ILD inboundinbound traffic intointo

IndiaNLD

# NLD1 NLD

Infrastructure and

Bandwidth services

provider in IndiaWiMAX

Spectrum Bank: foray foray


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Spectrum Bank: foray foray

to deliver end to end

broadband on

WiMAX

Unique play on the exponential growth of digital application and

content distribution spanning developed and emerging marketsWireless | Infratel | Globalcom | Enterprise | Home25 of 43


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Globalcom Business

Business Overview

We are more than Just a cable network developer

Just a wholesale bandwidth provider

Who we are Global service delivery provider of internet,

data and rich media on an all IP-enabled

network

Higher Revenue from Enterprise; Over 1,500

Enterprise customers

Established customer relationships spanning

developed & emerging markets, including

China, Asia, Middle East

Strong revenue and EBITDA momentum,

scalable low cost base, expansion financed

from cashflows and customer commitments

Just an India focused company


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Just an India focused company Just an "emerging carrier"

Strong franchise, uniquely positioned for profitable growthWireless | Infratel | Globalcom | Enterprise | Home26 of 43


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Globalcom Business


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Globalcom Business

Network reach Over 277,000 RKms of optic fiber cable with landing points in 30 countries

Managing over 60,000 customer sites in 160 countries through 700 carrier partners

FEAFA-1FNALFALCONHawk

Network connecting over 85% of the world's populationWireless | Infratel | Globalcom | Enterprise | Home27 of 43


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Globalcom Business


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Globalcom Business

Diverse and extensive customer base

Over 200 wholesale customers based on strong

long term relationships with over 70% repeat

CarrierEnterprise

orders;

Particularly strong in China, Asia, the Middle East

and India.

Among Top 5 Managed Network Service providers

(Gartner 2008) with over 200 corporate customers;

Among Top 6 Global Ethernet Service providers

(Vertical Systems 2009) with over 1,200

customers;

# 1 or # 2 service provider to world's top

exchanges including CME, NYSE, NASDAQ.

Retail Over 2.5 million retail customers in 15 countries

including U.S, Canada, U.K., Australia, New

Zealand, Hong Kong, Singapore, Malaysia, France,

Canada, Spain, Belgium, Netherlands, Austria and

India

Over 1,500 enterprise and 2.5 million retail customer base outside IndiaWireless | Infratel | Globalcom | Enterprise | Home28 of 43


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Short term margin pressure; due to macro global environment


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Short term margin pressure; due to macro global environmentWireless | Infratel | Globalcom | Enterprise | Home29 of 43


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Contents


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Contents


Wireless Globalcom




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Enterprise Business


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Enterprise Business

Business overviewEnterprise Segment

Data Connectivity Solutions

Voice Solutions

Data Center based Services

Retail Segment

Plain Old Telephony

Services (POTS)

Broadband Internet

Access (BIA)

Serves es E nterprise, SME and Retail customer stomer s for theirconnectivity needs31 of 43Wireless | Infratel | Globalcom | Enterprise | Home


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Enterprise Business


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te p se us ess

Market leadership

Segments where we lead the market

Largest share in the MPLS-VPN market

Largest share of the Centrex market

Market leader in Data Centers - More than 50% market share

Our customer portfolio

850 of top 1000 Enterprises in India

10,000+ Small & Medium Businesses (SMBs)1.48 Mn. Access lines

India's leading provider of enterprise servicesWireless | Infratel | Globalcom | Enterprise | Home32 of 43


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Enterprise Business


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IDC: Largest in India with >50% market share

Nine data centres with level 3+ accreditation -more than 400,000 sq ft of facilities space

Hosting >20,000 systems and >1400 terabyte

of information

Geographic redundancy

Wide & complex application hosted-

-

-

-

Core Banking, ATM/ Internet Banking

Complex ERP/ SAP ApplicationsComplex Intranet/ Customized Apps.

Large Messaging Applications

Expanding capacity to cater to fast growing demandWireless | Infratel | Globalcom | Enterprise | Home33 of 43


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Enterprise Business


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850 of Top 1,000 Indian enterprises are our customersFMCG SegmentServices SegmentTelecom OperatorsIT/ ITES SegmentBFSI SegmentMedia Segment

Winning >50% of new business generated in the segmentWireless | Infratel | Globalcom | Enterprise | Home34 of 43


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Enterprise Business


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p

Financial Performance

Revenue (Rs. Mn)8,0007,0456,7986,763 636,61 6176,000

EBITDA (Rs. Mn)2,5262,47 4773,0002,7552,4812,0004,0001,0002,000

003QFY104QFY101QFY112QFY11

EBITDA Margin3QFY104QFY101QFY112QFY1160%39.1%40%37.2%36.6%37.5%20%0%3QFY104QFY101QFY112QFY11

Steady business with strong marginsWireless | Infratel | Globalcom | Enterprise | Home35 of 43


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Contents


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Wireless Globalcom




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Home Business


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Indian Cable & Satellite Market18016018

2014022261203341100110471088010598

Cable Dark

C&S

DTH609083407020374521280

2

20075

200812

2009

20102011E2012E2013ESource : Industry Estimates

DTH penetration at 14% of TV homes; gaining momentum



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Home Business


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Reliance Bi TV (DTH)li Big

Pioneering HD experience in India

Pioneering DVR - "Watch when you

want"

Key service differentiators

-

-

-

-

-

-

-

More channel choice

Pure Digital viewing

32 Cinema channels

Easy program guide

Quick channel select


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Interactive applications (iNews, iGames,

iCricket, iCooking, etc)

Superior MPEG 4 technology

Digital viewing experience will create revolution in TV entertainment platformsWireless | Infratel | Globalcom | Enterprise | Home38 of 43


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Home Business


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BIG TV Services: Complete suite of servicesBroadcastTV and Radio EPG / Mini EPGMosaic

PortalInformationNewsStockEntertainmentGameVoD / MoD / PVR Karaoke / Photo Album

ServicesAdvertismentsInteractive Promotion PromotionDedicated Advertiser LocationMessagingSMS / MMSMailPolling / VotingCommerceShopping / BankingPublic ServiceT - Government / T - LearningWireless | Infratel | Globalcom | Enterprise | Home39 of 43


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Home Business


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The 4 Pillars of Growth

Content

200+ channels

32 exclusive movie channels

in English, Hindi and other

regional languages

Interactive features - Games,

News, Cricket, Stocks,Astrology, Cooking

High-definition channels

Technology

MPEG 4

Digital Picture

Digital SoundWireless | Infratel | Globalcom | Enterprise | Home

Reach and service

6,500 towns

2,000+ exclusive Reliance

retail stores

24x7 11 language


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24x7, 11 language

customer service

Experience

High-definition DVR box

Next generation easy-to-

use guide

Most advanced mini guide40 of 43


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Contents


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Globalcom




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Looking ahead


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Drivers for future growth and shareholder valueDrivers

Financials at inflection point as GSM momentum

scales up

RCOM not only reliant on wireless business for

future growth; massive opportunity in newer

segments including DTH and expansion of

Enterprise/IDC

Potential for unlocking shareholder value at

subsidiary level (Infratel, Globalcom, DTH)

Peak investment phase is over

Acquisition of DigiCable creates leadership

position in Indian Pay TV marketImpact

Increase revenue

generating ability

Large pipeline of


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Thank you


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rcom investor ppt november 2010

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