rcom investor ppt_may_2012

Reliance Communications

Investor Presentation

May, 2012

Confidential 2 of 41

Forward looking statements – Important NoteThis presentation and the discussion that follows may contain “forward looking

statements” by Reliance Communications Ltd (“RCOM”) that are not historical in nature.

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

are beyond 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.

Contents

Reliance Communications – an integrated telco

Wireless

Global Enterprise

Home

Key takeaways



Journey so far….FY 2009 to FY 2012

Mobile

FY 2007 & FY 2008

FY 2005 & FY 2006

CDMA , GSM, 3G, Netconnect

3G

Mobile

GlobalcomFLAG Telecom, Vanco,Yipes, Falcon & NGN

CDMA Service

EnterpriseIDC

Mobile Infratel200K slots; deepest backhaul

DigitalReliance Digital TV, IPTV, DigiCom

Integration

Globalcom

Enterprise

Growth

CDMA Service

Globalcom

Foundation


Evolution path towards a profitable integrated Telco


Current position of our businessesPan India Voice and Data network

3G license in 13 circles (highest number of circles by single

Wireless

GlobalEnterprise

Infratel

Home

Confidential5 of 41

operator)

Data leadership – Widest footprint of wireless high speeddata

Largest global private submarine cable network, blue-chipglobal clients

One stop shop for all large corporates and SMBs forcommunications, networking and IT infrastructure needs

Amongst Top 10 Data Centers in the world and # 1 in India

200k+ slots, unique ability to provide space and connectivity

Rapidly growing national DTH business, rich content access

Industry’s 1st offering of its kind – All 250 channels in HighDefinition like quality

Strong market presence in every business

ess

Wir

ele

bal E

nter

pris

e G

lob

tel I

nfra

te

Hom

e

Austria FranceNetherlandLondonBelgium Switzerland

dAustria

Switzerland SaudiArabiaFrance

Japan

Qatar SouthKoreaQatar

Bahrain IndiaOman

Malaysia HongKongUAE

SouthAfrica Africa


Strategy for focused and profitable growth

Address mass mobility market thru’ GSM with special focus on rural distribution

Consolidate data market leadership with high ARPU 3G services & high speed datacards

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

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

Complete NGN Mediterranean and continue to maintain leadership in the Carriers Carriermarket

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

USA

Canada

Oman HongKongTaiwan

Russia

Bangladesh

Taiwan

NetherlandSpain

UKGermany JapanGermany

Belgium

Italy

Italy Bahrain China

UAE

Spain

PakistanPakistan

SaudiArabia

NigeriaSudan Sudan Malaysia

Expanding Managed Services portfolio for higher share of customer’s wallet and to increasestickiness of our products

Australia

Nigeria

South

SouthKorea

SriLanka NewZealand

NewZealand

Maximize revenues from existing assets of Towers, OFC & Ducts

Infratel

Confidential

Huge potential of value unlocking for Reliance Communication shareholders

Aggressive acquisitions to build the subscriber base for long-term revenue

Rigorous program management framework for capex and opex cost efficiencies, esp. Set-top box and Content

6 of 41


Financial HighlightsConsolidated Revenue* (Rs. Mn) Consolidated EBITDA* (Rs. Mn)

221,323 231,07690,816100,000

203,823

150,000

250,000

200,000 78,205

64,89975,000

100,000

50,000

0

FY' 10 FY' 11 FY' 12

50,000

25,000

0

FY'10 FY'11 FY'12

35.3%39.3%

40%

EBITDA Margin

60%

31.8%

20%

0%

FY' 10 FY' 11 FY' 12


*FY’11 revenue and EBIDTA includes one time IRU License income in Global Enterprise business of Rs. 2,545 Cr. and associated EBIDTA of Rs. 2,530 Cr.

Amongst highest EBIDTA margin in the industry in hyper competitiveenvironment

Contents


Wireless

Global Enterprise

Home

Key takeaways


Wireless Business

Strengths of Wireless Business

Widest Coverage and Product Portfolio

Data Leadership ( 3G, High Speed Data & 1x)

Youth & Innovation Centric Brand

Focus on Quality of Minutes

1

2

3

4


All this with only 6 years of existence in industry, as compared to 15+ yearsfor competition

Wireless Business






1

2

3

4



Voice

Wireless Business

Widest Coverage – Pan India presence

24,000 Towns

600,000 Villages

1 Billion Indians

DataVAS

3G HSD

GSMCDMA


Wireless Business

Widest Product Portfolio (Enhanced Data Offering)Mobile Handheld Dongles / Tabs

CDMA HSD

Voice

3G HSPA

CDMA GSM


Data

Video

Wide options for Voice, Data & Video across CDMA & GSM platforms

Wireless Business






1

2

3

4



High speed data internet (3G, HSD)Srinagar

Wireless Business

Data Leadership : Leading the 2nd telecom revolutionenabling “Wire Free” India

Number of 3G towns

Number of HSD towns

Total high speedinternet towns

333

~1,000

~1,300towns

Mobile internet (1X , EDGE)Porbandar

Imphal

Guntur

Total towns withMobile Internet

20,000 +towns

3G circles: Top towns with 3G,rest with EDGE coverage


Non-3G circles: Top towns withHSD, rest with 1X coverage

Kanyakumari

Offering the widest footprint of High Speed Data across the length and breadth of India

Wireless Business

Reliance - Google Android Partnership

Reliance + GoogleBrands Co-marketing

Android Community:Special Data Offer

+

Android ExperienceZone at Reliance Retail

Outlets

Exclusive CustomerCareBest Experience of

Google Mobile Services


Objective is to create innovative products, marketing and quality servicelevels to change the Smartphone landscape in India

16 of 41

Wireless Business

Driving the entire Data eco-system

Worry-free billing& tariffs with ‘My

Best Plan’

Enabling deviceecosystem through

proprietary tab & partnerhandsets

Signed marquee partnership withGoogle on Android to drive datausage on mobile devices

Confidential

Several S&D initiatives to expanddata distribution reach

Wireless Business

Driving the entire Data eco-systemLaunch of CDMA tab… … & partnering with 3G Smartphone Leaders

Samsung

Wave 525 Wave 3 Galaxy NoteGalaxy S+ Galaxy R Galaxy Tab 620

HTC LGReliance HSD Network

Android OS 2.3

7 inch Thin Film Transistor (TFT)capacitive multi-touch screen

Dual camera (front and rear)HTC Rhyme Optimus

HubOptimus

NetOptimus Net

Dual SIMOptimus

SOL

Confidential

Wi-Fi & Bluetooth enabledPersonal Wi-Fi Hotspot

Tie-up with Samsung, HTC & LG forten new smartphones and one tablet

17 of 41

Wireless Business


2Widest Coverage and Product Portfolio




1

2

3

4



Wireless Business

Youth & Innovation-centric Brand

Redefining Brand Positioning

Data

Establish Supremacy

Enable the wirefree Indiavision, rooted on speed,coverage and wireless

platform

2G Mobile

Instill Trust/ Reliability

Gain share in the GSMmarket, with improvednetwork and customer

experience(Reliance Promise)

3G Mobile

Own InnovationAlways ahead in

launching 3G propositions(devices, apps, content

etc.) and owning‘innovation’ mindspace in

the category


Wireless Business

3G | The ‘Blue Bot’ campaign


Wireless Business

Reliance 3G Tab



Wireless Business

3G Mobile - Just 3G Vs Reliance 3GKey proposition “Switch to Reliance for the fastest 3G experience”

Impact PropertyIndia v/s England Series,Presenting sponsorship of over250 properties covering movies &sports

Wireless Business


2Widest Coverage and Product Portfolio




1

2

3

4



Wireless Business

Quality of Minutes

0.54

0.52

0.51

0.50

0.52

0.47

0.45 0.45 0.44 0.47

0.45 0.45 0.45 0.45

0.46

0.48

0.43 0.43

0.43

0.43

0.45

0.43 0.45 0.44

0.44

0.44

0.44

0.42

0.44

0.42

0.44

0.44

0.42

0.44

0.42

0.41 0.41

0.40

Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12


RCOM has with-held its Rate Per Minute for the last 8 quarters despiteintense pricing pressure

Wireless Business

Financial PerformanceRevenue (Rs. Mn) EBITDA (Rs. Mn)

43,267 44,170 44,471 45,055

40,00011,727 11,756 11,823 12,022

8,000

20,000

4,000

12,000

0

1QFY12 2QFY12 3QFY12 4QFY12

0


27.1% 26.6%26.6%

26.7%30%

EBITDA Margin

40%

20%

10%

0%



Stable revenue and margins in hyper-competitive environment

Contents


Wireless

Global Enterprise

Home

Key takeaways


Global Enterprise Business

Overview


Carrier

Among Top 15 largestinternational long distancecarrier with over 15 billionminutes of traffic

World’s largest privatesubmarine cable system ownerand capacity provider

Leading NLD Infrastructureprovider in India

Consumer

2.5 million retailcustomers in 14countries

380 corporates havecontracted theseservices in 3 continents

1.25 million broadbandcustomers in India

Enterprise

Leading Enterprise servicesprovider in India

Among the Top 6 Leader-board ofglobal Ethernet service providers

Among Top 11 Managed Servicesproviders in the U.S. and Europe(Gartner Report March 2010)

Amongst Top 10 Data Centers inthe world and # 1 in India (in terms


of Saleable space)

Scalable and proven infrastructure and capabilities are in place.Target is to scale up the business

Global Network Long Distance Network in India


Carrier business: Global connectivity & assetsOwn 277,000 RKms of optic fiber cable with landing points in 30 countries & world’s largest

private undersea cable system spanning 65,000 Kilometers

Manage over 60,000 customer sites in 163 countries through 700 carrier partners

This cable system is seamlessly integrated with 1,90,000 kilometer of fiber optic in India

connecting 600,000 villages & 24,000 towns to key business markets in India, USA, Europe,

Middle East, and APAC regions

Over 1000 direct interconnects with 450+ top networks


Network connecting over 85% of the world’s population


Enterprise business : Enterprise Managed Network

Global Connectivity Global Network


60,000+ managedsites with reach in 160countries andterritories

Metro Ethernetconnectivity across 26Metros outside India

High Capacity AccessNetwork customized tomeet CustomerDemand

Unparalleled global reach and depth of network



Enterprise business : Biggest Data center player inIndia with more than 550,000 sq ft of space

18 (9 India; 9 Outside India)Data centers across the globewith more than 550,000 sq ft offacilities space

Geographic redundancy

Wide & complex application

hosted

Core Banking, ATM/ InternetBanking

Complex ERP/ SAP Applications

Complex Intranet/ CustomizedApps.

Large Messaging Applications

Expanding capacity to cater to fast growing demand


Consumer business : Calling g services to 160+ countriesacross the globe

Innovative Product Suite

31 of 41

Global ReachRetail services in 14 countries

including U.S, Canada, U.K.,

Australia, New Zealand, Hong

Kong, Singapore, France,

Canada, Spain, Belgium,

Netherlands, Austria and India

Leadership Position

Over 2.5 million customers

for Reliance Global Call

service.

Usage of Reliance Global

Call accounts for 40% of

total retail market calls from

the United States to India.

Confidential


Global presence and strong customer baseOver 2,100 enterprise and 2.5 million retail customer base outside India

Over 200 carrier customers based on stronglong term relationships with over 70% repeat

Carrier

Enterprise

Consumer

Confidential32 of 41

orders;

Particularly strong in Asia, the Middle East andIndia

Among Top 5 Managed Network Serviceproviders with over 200 global corporatecustomers

Among Top 6 Global Ethernet Service providerswith over 1,200 customers in US alone;

# 1 or # 2 service provider to world’s topexchanges including CME, NYSE, NASDAQ.

Serve 850 of top 1000 enterprises in India

Over 2.5 million retail customers in 14 countriesincluding U.S, Canada, U.K., Australia, NewZealand, Hong Kong, Singapore, France,Canada, Spain, Belgium, Netherlands, Austriaand India

1.25 million broadband customers in India


Financial PerformanceRevenue (Rs. Mn) EBITDA (Rs. Mn)

22,916 23,353 23,516 24,395

30,000

5,893

8,000

22,500 5,643 5,694 5,6946,000

15,000

7,500

0


4,000

2,000

0


24.6% 24.4%24.2% 24.2%20%

EBITDA Margin

40%

30%

10%

0%



From 1Q FY’12 onwards, RCOM is reporting combined Global and Enterprise business units as a single operating business unit.

Synergies to improve operational efficiencies

Contents


Wireless

Global Enterprise

Home

Key takeaways


2220

18160

140

Home Business

Indian Cable & Satellite Market

200

180

26

Cable Dark

C & S

DTH

120

100

80

60

40

20

0

47

70

2

2007

41

83

5

2008

33

90

12

2009

98

21

2010

105

32

2011E

108

41

2012E

110

50

2013E


Source : Industry y Estimates

DTH penetration at ~20%% of TV homes; gaining momentum


Home Business

Reliance Digital TV (DTH)Industry’s 1st offerings of its kind - All 250channels in High Definition like quality

Pioneering HD experience in India

Pioneering DVR – “Watch when youwant”

Key service differentiatorsMore channel choice

Pure Digital viewing

8 Cinema channels

Easy program guide

Quick channel select

Interactive applications (iNews, iGames,iCricket, iCooking, etc)

Superior MPEG 4 technology

Digital viewing experience will create revolution in TV entertainment platforms

Home Business

Digital TV Services: Complete suite of services

BroadcastTV and Radio

Information

Entertainment

Advertisments

EPG / Mini EPG

News

Game

Mosaic

VoD / MoD / PVR

Portal

Stock

Karaoke / Photo Album

Interactive Promotion Dedicated Advertiser LocationServices

Messaging SMS / MMS Mail Polling / Voting


Commerce

Public Service

Shopping / Banking

T - Government / T - Learning

Home Business

The 4 Pillars of Growth

Content

250+ channels

8 exclusive movie channels inEnglish, Hindi and otherregional languages

Interactive features – Games,Shopping, Kids, Stocks,Astrology, Cooking

High-definition channels

Technology

MPEG 4

Digital Picture

Digital Sound

Confidential

Reach and service

8,100 towns

2,000+ exclusive Relianceretail stores

24x7, 11 languagecustomer service

Experience

High-definition DVR box

Next generation easy-to-use guide

Most advanced mini guide

38 of 41

Contents


Wireless

Global Enterprise

Home

Key takeaways



Drivers for future growth and shareholder value

Impact

Increase revenuegenerating ability

Operationalleverage improves margin &

Drivers

Peak investment phase over: RCOM continues to

be free cash flow positive. This trend to continue in

succeeding years

Financials at inflection point as GSM and 3G

momentum scales upprofitability

Besides wireless, massive opportunity exists in

expansion of Enterprise / IDC and newer segmentsPotential ofunlocking

shareholders value

including DTH

Potential for unlocking shareholder value at


subsidiary level (Infratel, Global Enterprise, DTH)

Stable business performance with significant free cash flow generation to placeRCOM in a much stronger financial position

Thank you

rcom investor ppt_may_2012

Education

data market leadership

data network

achievements of rcom

data centers

management of rcom

forward looking statements

high arpu

high definition