Investor Presentation
Bharti airtel limitedBharti airtel limited
December 2010
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 the applicable
laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the
presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We
will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any
omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use
would be contrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be
obtained and necessary due diligence, investigation etc may be done at your end. You may also 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 general business plans
and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory 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 andActual 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 or developments in our business, our
competitive environment, telecommunications technology and application, and political, economic, legal and social conditions in India. It is cautioned that the
foregoing list is not exhaustive
“The information contained herein does not constitute an offer of securities for sale in the United States. Securities may not be sold in the United States
absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities to be made in the
United States will be made by means of a prospectus and will contain detailed information about the 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.in
For any queries, write to: [email protected]
The Company...Bharti airtel – An Integrated Telco
� Wireless Services
� 2G
� 3G
� Rural Market
� Telemedia Services
� Enterprise Services
� Carriers
� Corporates
� Passive Infrastructure Services
� Infratel
� Indus� Fixed Line
� Broadband
� IPTV
� Indus
� DTH
� Pay per view / HD
� Interactive Services including Gaming
Fully integrated telecom player offering end to end solutions
and entering new geographies
The Company…Bharti airtel
No. of circles (India) Today Countries
1 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
operator
< 25k Customers ~ 137 mn
~ USD 17 mn Revenue ~ USD 9 bn
~ USD 2.5 mn EBITDA ~ USD 4 bn
1996 2010
~ USD 2.5 mn EBITDA ~ USD 4 bn
~ USD 1.4 mn Cash Profit ~ USD 4 bn
~ USD 16 mn Market Capitalization ~ USD 26 bn
Continuing on our journey of Value Creation
Note: 1) 2010 financials are as per FY 2010 results. 2) Exchange rate: Financials as of 31st Mar 10 : Rs 45.14
3) The above numbers do not include Africa which has 40 mn subs as on 30th Sept’10.
Revenue & Profitability trends
4,103
5,987
8,188 8,776
0
2,000
4,000
6,000
8,000
10,000
2007 2008 2009 2010
(In $
Mn)
Years
Total revenues
36%
CAGR
EBITDA
1,651
2,519
3,360 3,550
0
1,000
2,000
3,000
4,000
5,000
2007 2008 2009 2010
(In
$ M
n)
Years
39%
CAGR
Cash profit from operations Net profitCash profit from operations
1,619
2,467
3,103
3,679
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2007 2008 2009 2010
(In
$ M
n)
Years
42%
CAGR
943
1,484
1,876
2,017
0
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010
(In $
Mn)
Years
42%
CAGR
� Bharti Airtel – demonstrating robust performance
Source: Financials for the year ended March 31, 2006, 2007, 2008, 2009 & 2010 are audited and as per USGAAP.The above numbers are in Mn USD re-stated at 31st Mar 10 exchange rate..Exchange rate as of 31st Mar 10 : Rs 45.14
Financials & Positioning
Key financial metrics
FY 10 (in Mn)
Customers 137.0
Revenue $ 9,271
EBITDA $ 3,714
Positioning in the world & in India
� 3rd LARGEST wireless operator in the world (1)
� LARGEST private INTEGRATED telecom company in
India
� 5th LARGEST INTEGRATED telecom operator in the
EBITDA $ 3,714
Cash Profit $ 3,710
Net Income $ 1,989
EBITDA Margin (%) 40.3*
ROCE (%) 24.4
Note: FY10 numbers are as per IFRS as per June10 quarterly report. Exchange rate for Re to $ conversion: 45.14. * EBITDA Margin before acquisition related costs of Rs 976 mn for the quarter & FY ended Mar 31, 2010. (1) 3rd largest wireless operator in the world refers to in-country (single country) operator based on the number of subscribers.
world
� LARGEST operator in NLD, ILD and VSAT business
� LARGEST TELECOM company listed on Indian Stock
Exchanges
Latest Results – 2Q’11
Key operating and financial metrics Continued Strong Performance
Q2 FY 11* Y-on-Y
Customers 194.82 mn 68.2%
Revenue $ 3,387 mn 47.4%
EBITDA $ 1,140 mn 19.0%
� Wireless CMS 20.8%
� Wireless RMS 31.2%
� Total MOU carried in Qtr 216.4 bn
� Balance sheet strength:EBITDA $ 1,140 mn 19.0%
Cash Profit $ 1,066 mn 17.0%
Net Income $ 370 mn -27.0%
EBITDA Margin 33.7%
ROCE 10.9%
� Balance sheet strength:
� Assets $ 32.1 bn
� Net debt $ 13.4 bn
� Net debt to EBITDA 2.9 Times
(annualized)
� Continues to be FCF positive on at South Asia
Level.
•Includes full quarter numbers for Africa
•Exchange rate as of 30th Sept 2010: 44.92
•**RMS as per June quarter as Sept quarter nos are not yet released by TRAI
Performance dashboard - 3 line graph
107,491
122,308
152,150
38.4%39.9% 41.4%
42.7%45.7%
66%63% 63%
74%
72%
40.0%
50.0%
60.0%
70.0%
80.0%
105,000
115,000
125,000
135,000
145,000
155,000
To
tal R
eve
nu
e (
Rs.m
n)
Productivity Indicators = growing revenues + cost efficiencies + capital productivity
The above chart is for Airtel Consolidated including Africa
103,785 103,053
107,491
30.0%95,000
Q210 Q310 Q410 Q111 Q211
Total Revenue (Rs. Mn) (LHS) Opex to Total Revenue (RHS) Capital Productivity (RHS)
Wireless Services
Indian Market
Overall Telecom Market Wireless Market
� Population 1.2 billion
→ Relatively large youth population
� Telecom penetration c.62.51%
(~742 mn telecom subs)
Sub number should go upto 1 Billion by 2015
� Sub Base c.707 mn
� Wireless Penetration c.59%
� Operational metrics per month
� Usage per user 454 min
� ARPU ~ US$ 4.5
� Broadband penetration 0.89% (10.52 mn)
→ Govt. target to reach 20 mn. Broadband subs by 2010
� ARPU ~ US$ 4.5
� Rate per minute US$ 0.01
� VAS ~ 12.7%
Lot of opportunity ahead….
Note: (1) Subscriber numbers and wireless penetration numbers as on Oct 31, 2010 are as per TRAI (2) Other indicators on the slide are based on Global Wireless Matrix 3Q10 dated 24th September 10 by Merrill Lynch, and reflective of Industry numbers.
Rapidly Growing Indian Wireless Market
40%
50%
60%
70%
80%
90%
Net Adds in Oct 19.0 Mn…greater than over last 3
months average run rate of 17.4 MnS-curve triggered
12
14
16
18
20
22
400
500
600
700
800
(mn
)
Closing Subscribers Net Adds
0%
10%
20%
30%
40%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
India - Fastest Growing Market in the World
Note: (1) Actual Data as per Industry Association Releases and Industry Estimates in India.
-
2
4
6
8
10
-
100
200
300
400
No
v-0
3
Ma
y-…
No
v-0
4
Ma
y-…
No
v-0
5
Ma
y-…
No
v-0
6
Ma
y-…
No
v-0
7
Ma
y-…
No
v-0
8
Ma
y-…
No
v-0
9
Ma
y-…
Wireless Market Structure in India
Subscriber Trends Customer Market Share – CMS (%)
146
119 118
86
7681 80
113
88 86
64
53 51
3333 31 32
22 2330
47
20
40
60
80
100
120
140
160
(mn
)
20.7%
16.9%
12.2%11.4% 11.3%
10.8%
16.7%
6.7%
10.4%10.9%
13.1%
17.6%18.1%
23.2%
7%
9%
11%
13%
15%
17%
19%
21%
23%
25%
• Airtel continuously consolidating its market leadership position despite intense competition
• Airtel current monthly net adds at 3.0 million vs. 2.8 million a year ago
• Airtel ranks 1& 2 in 16 circles in terms of number of subscribers
• Over 66% 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 October 31 2010 as per TRAI press release.
-
Air
tel
Re
lian
ce
Vo
da
fon
e
BS
NL
+M
TN
L
Ide
a
Ta
ta
Oth
ers
Oct -10 Oct -09 Net adds dur ing t he year
5%
Airte
l
Relia
nce
Vodafo
ne
BS
NL+M
TN
L
Idea
Tata
Oth
ers
CMS(Oct '10) CMS(Oct '09)
Airtel…Performance Indicators (Operational)
Customers & Market Share Prepaid/Postpaid
110.5 118.9
127.6 136.6 143.3
23.5%22.7%
21.8% 21.5%20.8%
20%20%21%21%22%22%23%23%24%24%
0
20
40
60
80
100
120
140
160
Q210 Q310 Q410 Q111 Q211
Customers (mn) CMS (%)
94.7% 95.2% 95.3% 95.8% 96.0% 96.1%
101.1%
100.4%97.5%
101.7% 99.2%97.5%
85%
90%
95%
100%
105%
Q110 Q210 Q310 Q410 Q111 Q211
Prepaid Subs Prepaid Net Adds
ARPU & RPM MoU/Sub/Month & MON
56.05 51.69 46.98 44.83 44.44
252 230
220 215 202
0
50
100
150
200
250
300
-
10
20
30
40
50
60
Q210 Q310 Q410 Q111 Q211
RPM (Paise) ARPU (INR)
450 446 468 480 454
143,680
153,241 174,746
195,197
196,196
80,000
130,000
180,000
230,000
280,000
420
430
440
450
460
470
480
490
Q210 Q310 Q410 Q111 Q211
MoU/Sub (Min) Total minutes on Network (Mn Min)
Current positioning and way forward…
Leadership Positioning Growth strategy and plans
RevenueRevenue
� Revenue size
(>$ 9 Bn)
� Revenue Market Share
New Revenue Streams
� Changing face of growth
through M-Com, M-
entertainment & 3G
Cost
Non financial vitals
� Brand
� Distribution
� Churn lower than industry
� Spectrum Mix (900/1800 MHz)
� Improving cost efficiencies
� Lowest cost GSM networkMaximizing
usage
Net Adds
� Increasing the usage through U&R drive
� Wallet share
� Driven by rural strategy
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 88 top cities of India.
2. Target Segment : Retail and Small and Medium Enterprises.
3. Customer base: 3.2 million (end Oct 2010)3. Customer base: 3.2 million (end Oct 2010)
4. Broadband (DSL with speeds>256 kbps) penetration at 42.8% of customer base.
5. Average ARPU for Quarter ended Jun’10 $ 21.2 per month.
6. Segment contributing to 6% of overall revenues of the company.
7. EBITDA margin of over 46.1%.
Broadband revolution to follow wireless revolution in India
SMB opportunity across ICT stream
Enterprise 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
� 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
� Extensive national and international infrastructure
� Pan-India network with 134,026 Route kms of optical fiber, over 4,150 MPLS and SDH POPs� Pan-India network with 134,026 Route kms of optical fiber, over 4,150 MPLS and SDH POPs
� Access network (terrestrial) in 88 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 (Q2 ‘11)
� NLD Minutes Carried: 17.7 Billion ; ILD Minutes Carried: 3.0 Billion
� Revenue: Rs.10,424 Million (7 % Segment Contribution Share)
� EBITDA: Rs. 2,571 Million (24.7% EBITA Margin)
Emerging Growth Engines
Passive InfraPassive Infra
Africa
Financial Performance – Passive Infra
355
394
431438
471
400
450
500
5,8316,267
7,224 7,2407,858
5,000
6,000
7,000
8,000
9,000
10,000
34.2 34.0 37.1 35.5 37.1
Revenue EBITDA
355
300
350
Q210 Q310 Q410 Q111 Q211
3,000
4,000
5,000
Q210 Q310 Q410 Q111 Q211
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
Towers (nos) & Sharing Factor Towers (nos) & Sharing Factor
30,568
31,83131,196
29,806
29,112
1.651.65
1.62
1.57
1.49
27,000
28,000
29,000
30,000
31,000
32,000
33,000
Q2 10 Q3 10 Q410 Q111 Q211
1.40
1.50
1.60
1.70
No of towers Sharing Factor
102,938
106,438
104,901
102,696100,728 1.78
1.751.71
1.661.61
93,000
95,000
97,000
99,000
101,000
103,000
105,000
107,000
Q210 Q310 Q410 Q111 Q211
1.40
1.50
1.60
1.70
1.80
1.90
No of towers Sharing Factor
Infratel Indus
Aims to enhance the tenancy ratio & be the preferred choice of vendor for all existing
and new operators
Sharing Revenue per Sharing Operator per Month (Rs) Sharing Revenue per Sharing Operator per Month (Rs)
36,87836,69638,107
36,290
38,041
25,000
29,000
33,000
37,000
41,000
Q2 10 Q3 10 Q410 Q111 Q211
Sharing Revenue per Sharing Operator per month
31,38930,379
28,33325,917
29,674
15,000
20,000
25,000
30,000
35,000
40,000
Q210 Q310 Q410 Q111 Q211
Sharing Revenue per Sharing Operator per month
Transaction Rationale
Clean /
certainty
of transaction
Shareholding and
Management
Control
����
Brand – ‘Airtel’����
����
100% Cash Transaction ����
Focus on Core
Middle East Operators����Global
Stature
Emerging Market
Characteristics
Strong Platform
for Future Expansion
Manageable
Deal Size����
Diversification of
India Risk����
Avoid Greenfield����
Speed in
Transaction ����
Repayment of Debt ����
Significant
Synergies
Low Competitive
Intensity
The proposed transaction meets the objectives of Airtel with long term strategic
benefits and creates tremendous shareholder value
Differences between the two markets
Mobile Penetration
Business Model Low usage, high pricing model
40%
High usage, low pricing model
62%
Average Number of Competitors
3-510-12
India Africa(1)
Minutes of Usage
ARPU (US$)
ARPM (US cents ¢)
~112
~$7
7¢
~454
~$5
1¢
And therefore huge opportunity space
Source: Global Insight, annual / quarterly reports.1. Data pertaining to the 16African countries where Zain Africa has operations.
Africa – Strong Platform
Airtel Africa Coverage Addressable Market Opportunity
Airtel Africa
450mnTotal Africa:
1,025mn
450575
Airtel Africa Footprint Other African Countries
Population, 2009 (mn)Population, 2009 (mn)
Penetration, 2009
Leading African Operators
• Large addressable population with low tele-
density
• Leading telecom operations acquired through
Zain Africa
• Strong competitive positioning39
22 19 15
42
77
Subscribers, 2009 (mn)
Source: Zain Filings, WCIS.
Telecom Operators by Subs in Africa
Penetration, 2009
Another Growth Engine - Africa
� Customer Base : 40.08 Mn
� Performace Indicators (CY 2009):
Revenue: $ 3,667 Mn
EBITDA: $ 1,160 Mn
� Prepaid Base: 99.3%
→one of the highest in the
world
� Usage per sub per month: 112 Minutes
→one of the lowest
� ARPU: ~ US$ 7.4
� Rate per minute: ~ US¢ 6.6
→ one of the highest
� VAS: ~ 7.1%
→One of the lowest
Note: Above numbers based on Quarterly report ended 30 September ,2010.
Recent Honors
Bharti airtel – Leadership in business Recent Honours
� NDTV Profit Business Leadership Awards 2010
� Top Telecom Company
� Sunil Bharti Mittal - Business Innovator of the Year
� India’s Most Innovative company - Wall Street Journal
� Most Preferred Cellular Service Provider - 2010 CNBC Awaaz Consumer Awards
� Tele.net Telecom Operator award
Won in 6 out of total 14 categories. Few among them being
Most Admired company � Best Internet and Broadband operator
� ‘Powerful Brand’ - Economic Times (the only corporate brand to be awarded the AAA rating)
� Bharti Airtel rated as India’s Best Enterprise Connectivity Provider- Users choice award Instituted by PC Quest
� Sunil Bharti Mittal – Global Telecom Leader - Voice & Data magazine
– ‘Philanthropist of the Year’ at Asian Awards 2010
� Akhil Gupta, Deputy Group CEO and MD - Asia Corporate Dealmaker Award 2010
� Manoj Kohli, CEO( International) & Joint MD - Telecom Man of the year - Tele.net
� Business world – FICCI – SEDF Corporate Social Responsibility Awards 2009-10
� Most Admired company
� Best National Mobile operator
� Best Internet and Broadband operator
� Best Enterprise services
thank you