analyst meet q1 fy10 v2 - aceanalyser.com meet/132371_20090728.pdf1 build indicom brand & focus...
TRANSCRIPT
VisionTo be the most admired Telecom service
provider in Maharashtra and Goa
MissionWe will become the most admired company delivering sustainable value by –
Balancing the needs of all stakeholders and encouraging value creation throughout the organization
Continuously satisfying customers’ growing needs and expectations with innovative and customized cutting edge solutions
Creating an engaged and empowered workforce committed to delivering high performance
Analyst Meet
Q1 FY10
28 July 2009
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.
Key Milestones in Q1 on Subscribers
Crossed 8 million subscribersTTML
Crossed 5 million Subscribers – largest
Tata circle in India today
Rest of Maharashtra
TTML ADSL base has crossed the 50,000 subscribers milestone
Digital Mumbai™
Agenda
Operations Priorities decided for FY 09-10
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
Operations Priorities decided for FY 09-10
Build Indicom Brand & Focus on InnovationBuild Indicom Brand & Focus on Innovation11
Events
Internet, TVCs & Radio
Schemes & Offers
Outdoors
Value Added Services
Device Innovation
Building Indicom Brand & Focus on Innovation
OutdoorsOutdoors
Mumbai – Juhu SNDT Mumbai - Mahim Causeway
Pune - Pimpri, Finolex Chowk Mumbai - Worli
Building Indicom Brand & Focus on Innovation
OutdoorsOutdoors
Bushy Dam – a prominent weekend destination visited by travelers from Mumbai, Pune, Nasik etc. especially during the monsoons
Building Indicom Brand & Focus on Innovation
EventsEvents
Building Indicom Brand & Focus on Innovation
EventsEvents
Building Indicom Brand & Focus on Innovation
Internet, TVC & RadioInternet, TVC & RadioScreen Grabs - rediff.comScreen Grabs - Orkut
Screen Grabs - Zapak Gamplex Screen Grabs - rajshri.com
Building Indicom Brand & Focus on Innovation
Internet, TVC & RadioInternet, TVC & Radio
Go One TVC
Let’s RockTVC
Prepaid RCVRadio
VASRadio
Let’s RockRadio
Build Indicom Brand & Focus on Innovation
Highlights of Let’s Rock PlanThis year’s edition launched in June end, when campuses opened
5 years validity compared to 3 years earlier
Special tariffs at night after 9pm
Over 60K subscribers in one month
Schemes & OffersSchemes & Offers
Build Indicom Brand & Focus on Innovation
Highlights of Go One Life PlanLaunched in mid April
Objective: To increase acquisition by being most competitive in the Lifetime segment
50 paise per minute for all local calls to any network
Schemes & OffersSchemes & Offers
Build Indicom Brand & Focus on Innovation
Schemes & OffersSchemes & Offers
May Day Press Ad RCV 115
Build Indicom Brand & Focus on Innovation
Home Zone tariff offerProduct: Special tariff for customers calling through BTSs with low utilization to increase loading
Tariff Offered: 10 paisa local T2T and 50 paisa other local calls, with 6 months validity
Tariff has been launched in the last 2 quarters across 500 sites and the average RF utilization shows a growth of 50%
Schemes & OffersSchemes & Offers
Build Indicom Brand & Focus on Innovation
Value Added ServicesValue Added Services
Mobile Millionaire Contest SMS Pack
Building Indicom Brand & Focus on Innovation
Device InnovationDevice Innovation
Wireless EPABX GatewayAllows penetration into unwired buildings
One extension with DID/DOD facility for each desk
Provides scalability from 16 to 160 extensions
Patent filed for this innovation
Building Indicom Brand & Focus on Innovation
Device InnovationDevice Innovation
Photon+
Following the launch of Photon+ in Mumbai in March ‘09, the product has now also been launched in Nagpur with effect from July 25th ‘09
Operations Priorities decided for FY 09-10
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
18 towns and 22 BTSs rolled out for CDMA in Q1, taking the total to 1166 towns and 2703 BTSs
Major focus during the quarter has been on building out the GSM network
Operations 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
Operations Priorities decided for FY 09-10
Optimize Costs & Enhance Margins Prepaid channel commission reduced by 36% over Q4 FY09, mainly due to lower prepaid activation pack prices
RCV distributor margin being further reduced from 4.5% to between 3.75% to 4%
Reuse of CDMA infrastructure to the extent of 90% of CDMA sites in Mumbai and over 90% of CDMA sites in RoM in the areas where GSM rollout is being done
Operations Priorities decided for FY 09-10
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
Focus on Customer Service
TTML has been rated as the only congestion free network across Mumbai and Maharashtra in the last four consecutive reports published by TRAIThis follows its earlier rating in independent studies commissioned by TRAI as the No. 1 wireless operator in terms of overall customer satisfaction across Mumbai and Maharashtra
Focus on Customer Service
Mahim Causeway 61x10
Worli AB Road (Opp Poddar Hospital
Agenda
Economic Overview
Indian EconomyAgainst earlier estimates in the AOP of 7.1% growth, the Indian economy in fact only grew 6.8% in 2008-09The Government is indicating a projected growth of 7% in FY10
Maharashtra EconomyAgainst earlier projections of 8% growth in FY09, the State economy in fact only grew 7.1%Worryingly, against earlier indications that the agricultural sector was likely to register positive growth, the agrarian economy in fact showed negative growth of 7.1%; since the agrarian economy supports over 55% of the population, due caution needs to be exercised in projecting growth this year of rural and semi-urban subscribers, in particular the revenue they might generate
Source: Maharashtra Economic Survey, 2008-09
Market Overview
India
Population as of 2009 (Mln)Population as of 2009 (Mln) 1166.91166.9 101.2101.2 2020
Maharashtra(excl. Mumbai) Mumbai
Wireless TeledensityWireless Teledensity 37%37% 33%33% 102%102%
Q1 FY10 subscriber growth over Q4 09Q1 FY10 subscriber growth over Q4 09 9.1%9.1% 7.4%7.4% 6.2%6.2%
Wireless Base as on June 2009 (Mln)Wireless Base as on June 2009 (Mln) 427.4427.4 33.233.2 20.420.4
Q1 FY10 TTML subscriber growth over Q4 09
Q1 FY10 TTML subscriber growth over Q4 09 6.1%6.1% 8.5%8.5%
* Source: MMRDA report (Population and Employment profile of Mumbai Metropolitan region), Wikepedia & TRAI Subscriber ReportNote: BSNL CDMA numbers not released
Reliance14.2%
Bharti20.8%
Tata Indicom64.9%
Reliance14.6%
Bharti35.7%
Tata Indicom49.8%
Q1 FY10 Wireline Incremental Market Share
MumbaiMumbai
ROMROM
Source: TRAI Subscriber report (Only Private players)Source: TRAI Subscriber report (Only Private players)
(9 K)(9 K)
(20K)(20K)
Reliance19.1%
Bharti31.9%
Tata Indicom48.9%
Q1 FY10 Wireline EOP Market Share
Reliance27.9%
Bharti20.7%
Tata Indicom51.4%
MumbaiMumbai
ROMROM
Only Private playersOnly Private players
(138 K)(138 K)
(428 K)(428 K)
Q1 FY10 Wireless Incremental Market ShareMumbai ROM
TTML
11
4422
33
1122
44 33
11
22
44 33
Vodafone
MTNL
Bharti
Idea
Tata Indicom
Aircel
Loop
Vodafone
Bharti
Idea
Tata Indicom
Aircel
BSNL
Vodafone
MTNL
Bharti
Idea
Tata Indicom
Aircel
Loop
BSNL
Reliance (CDMA+GSM)
Reliance (CDMA+GSM)
Reliance (CDMA+GSM)
Source: TRAI Subscriber reportSource: TRAI Subscriber report
Q1 FY10 Wireless EOP Market Share
16.2%10.9%
0.001%
14.9%24.1%
18.4%
15.5%12.2%
13.8%
1.0%22.42%
12.3%11.3%
4.6%
22.44%
18.2%
18.5%
6.8%
13.9%
4.3%
4.7%
0.4%
16.7%
16.6%
11 22
4433
Mumbai ROM
TTML
11
22
55
33
44
11
22
55 33
44
Vodafone
MTNL
Bharti
IdeaTata Indicom
Aircel
Loop
VodafoneBharti
IdeaTata Indicom
Aircel
BSNL
Vodafone
MTNL
Bharti
Idea
Tata Indicom
Aircel
Loop
BSNL
Reliance (CDMA+GSM)
Reliance (CDMA+GSM)
Reliance (CDMA+GSM)
Source: TRAI Subscriber reportSource: TRAI Subscriber report
Market Evolution
With increased competition and falling tariffs, ARPUs and revenues from traditional voice services are going to be constantly underpressure
Subscriber growth in semi-urban and rural areas, while high, will not generate commensurate revenue and bottom-line growth
The urban revenue pie, which is nearing saturation, and already has many operators jostling for a share, will get further divided
While subscriber growth will continue to be relevant, the focus will have to be on trying to increase revenue market share (with strict control on costs), through smart segmentation (e.g. Let’s Rock), offering value added products and services (e.g. Conferencing), and churning high value subscribers from the competition (e.g. by leveraging mobile number portability)
Agenda
SCORECARD Q1 FY10 Vs Q4 FY09 and Q1 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.)
EOP Subscribers (Nos. in lacs)EOP Subscribers (Nos. in lacs)
PAT (Rs.Crs.)PAT (Rs.Crs.)
513513
158158
31%31%
8585
Q1 FY10Actual
80.080.0
(34)(34)
Cash Profit (Rs.Crs.) (excl. Forex Loss)Cash Profit (Rs.Crs.) (excl. Forex Loss) 7676
Q4 FY09Actual
517517
132132
26%26%
7979
75.075.0
(39)(39)
5151
Q1 FY09Actual
505505
155155
31%31%
8080
56.256.2
(35)(35)
100100
Note: Q4 FY09 & Q1 FY10 figures are consolidated results
Termination charges reduced with effect from April 2009
Key Parameters
Particulars UnitsJun-08 Sep-08 Dec-08 Mar-09 Jun-09 FY-08 FY-09
Wireless ServicesSubscribers Base Nos. '000 5,190 5,698 6,150 6,962 7,441 4,683 6,962 Prepaid Subscribers as a % of EOP Subscribers % 87% 88% 89% 91% 91% 86% 91%Wireless Subscribers Market Share % 14.0% 14.1% 13.9% 13.9% 13.9% 13.5% 13.9%Average Revenue per User * Rs. per month 232 210 196 178 154 268 198 Avg. MOU per User ** Min. per month 369 336 323 311 292 447 326 Rate per Minute Rs. 0.63 0.62 0.61 0.57 0.53 0.60 0.61 Postpaid Voluntary Churn % per month 0.8% 0.6% 0.8% 1.2% 1.3% 0.9% 0.9%Postpaid Company Initiated Churn % per month 1.2% 2.5% 2.4% 2.1% 1.6% 1.9% 2.2%Prepaid Churn % per month 0.8% 0.8% 1.8% 1.1% 1.2% 1.6% 1.1%VAS + Data Revenues as a % of Wireless Revenue % 12.3% 13.4% 13.4% 13.9% 15.4% 10.1% 13.2%
Wireline ServicesCustomers Nos. '000 427 456 489 533 563 396 533 ARPU *** Rs. per month 1,260 1,275 1,156 1,048 1,071 1,324 1,116
** Only Voice MOUs considered. Local on net MOUs have been counted twice.*** Wireline revenues are inclusive of Rs. 16.67 Cr. one time revenue from dark fibre and bandwidth sale in Q1-10.
Year EndedQuarter Ended
* Q1-09 revenues include USO Subsidy for 2 quarters; Q2-09 has upfront USO subsidy, accounting change from 01.04.2008.
Other Details
Particulars Units Q2-09 Q3-09 Q4-09 Q1-1021st Century Infra Tele Ltd.Total Towers Nos. 1,294 1,380 1,492 1,829 Ground Based Towers Nos. 381 393 433 494 Roof Top Towers and Others Nos. 913 987 1,059 1,335 Occupancy Ratio Ratio 1.39 1.37 1.41 1.43
Particulars Units Q1-09 Q2-09 Q3-09 Q4-09 Q1-10Wireless ServicesMinutes on Network * Mn Min 5,463 5,487 5,741 6,113 6,301 Census Towns Nos. 295 311 324 330 330 Non-Census Towns and Villages Nos. 7731 7804 9,054 10,334 10,574 Population Coverage (excluding Mumbai) Nos. lacs 608 623 670 716 720 Network Sites Nos. 1757 2050 2,367 2,681 2,703 Optic Fibre Network Km 6536 6580 7,980 8,804 9,154
TTML Balance Sheet data (Standalone)Gross Debt Rs. Cr 2,781 2,894 3,096 3,112 3,185 Net Debt Rs. Cr 2,753 2,856 3,069 3,085 3,165 Gross Block (including Capital WIP) ** Rs. Cr 4,620 4,456 4,654 4,771 5,133
* Only Voice MOUs considered. Local on net MOUs have been counted twice.
** Passive Infrastructure assets hived off wef 30th Sep 2008.** Fully depreciated assets written off and removed from Gross Block of assets (Q1-09 Rs. 268 Cr and Q4-09 Rs.100 Cr).
409 429 460
491 505 518 518 517 513
130
230
330
430
530
630
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
Revenue (Rs.Cr.)
Quarterly Performance
Note: Figures from Q3 FY09 onwards are consolidated results
Crossed 500 Crs five quarters in a row
3,478 4,127
4,696 5,079
5,617 6,154
6,639 7,495
8,004
600
2,600
4,600
6,600
8,600 Q
1FY0
8
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
EOP Subscriber Base (`000)
314
283
250 233
218 202 192 182
154
70
140
210
280
350
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
Operational Cost per Sub (Rs.pm)
100 106
128
150 155 161 151
132
158
0
40
80
120
160
200
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
EBITDA (Rs.Cr.)
Quarterly Performance
25% 25%28%
31% 31% 31%29%
26%
31%
0%
7%
14%
21%
28%
35%
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
EBITDA Margin (%)
(3)2
15
33
41 46
35
15
39
-10
0
10
20
30
40
50
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
EBIT (Rs. Cr)
(28)
(49)
(27)
(21)
(35)
(47) (49)
(39)(34)
(60)
(45)
(30)
(15)
-
Q1F
Y08
Q2F
Y08
Q3F
Y08
Q4F
Y08
Q1F
Y09
Q2F
Y09
Q3F
Y09
Q4F
Y09
Q1F
Y10
PAT(Rs.Cr.)
Note: Figures from Q3 FY09 onwards are consolidated results
Market Capitalization & Share Price (As on 30th June 2009)
Source: BSE
(Fig. in Rs. Crs)
28.4528.45
40.3040.30
35.90
(Fig. in Rs.)TTML Share Price Trend
5387.195387.19
7646.06
6811.67
Market Capitalization Trend
15626.6215626.62
17600.1217600.12
14493.84
BSE Index Trend (Fig. in Rs.)
Thank You