Download - RCOM Investor Ppt March2011
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Reliance Communications
March, 2011
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Reliance Communications an integrated telco
Wireless
Global Enter rise
Home
ey a eaways
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Reliance Communications
FY 2011
FY 2009 & FY 2010.
3G
CDMA & GSM ServicesFY 2007 & FY 2008
o e
NGN
WorldsLargest N/W
Mobile
Enterprise
2L slots Deepest backhaul
MobileInfratel
IntegrationGrowthFoundation
EnterpriseIPTV
Confidential 4 of 39
Evolution path towards a profitable integrated Telco
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Reliance Communications
#2 in India, #4 globally (single country), dual technologyWireless
Globalcom Largest global private submarine cable network, blue-chip
global clients
Enterprise
One stop shop for all large corporates and SMBs forcommunications, networking and IT infrastructure needs
Infratel 200k+ slots, unique ability to provide space and connectivity
Home Rapidly growing national DTH business, rich content access
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Strong market presence in every business
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Reliance Communications
Address mass mobility market thru GSM with special focus on rural distribution
less
Increased revenue from new service streams (share of VAS & In-roaming revenue)
Maximize revenues from existing assets of Towers, OFC & Ducts
Wir
tel
Huge potential of value unlocking for Reliance Communication shareholders
Sign long term contracts with existing and new operators to provide pan-India infrastructureUSA
CanadaGermany
Italy
London
Saudi Arabia
Austria
Japan
RussiaSpain
Belgium
France
Switzerlandd
Netherland
USA
CanadaGermany
UK
Austria
Russia
Belgium
France Switzerland
Netherland
com
Infr
Infratel
Ramp up Managed Services business; Complete NGN Mediterranean and continue tomaintain leadership in the Carriers Carrier market
Australia
Pakistan
Sri Lanka
China
Hong Kong
Bangladesh
Nigeria
South Africa
South KoreaNew Zealand
UAEBahrain
Qatar
Oman
Taiwan
MalaysiaSudan
Australia
Pakistan
Sri Lanka
China
Hong KongBangladesh
Nigeria
South Africa
Italy
South Korea
NewZealand
UAESaudi Arabia
Bahrain
Qatar
Oman
Japan
Taiwan
Malaysia
Spain
Sudan
India
Globa
l
ise
Expanding Managed Services portfolio for higher share of customers wallet and to increasestickiness of our products
Aggressive acquisitions to build the subscriber base for long-term revenue
En
terp
r
Confidential 6 of 39
Rigorous program management framework for capex and opex cost efficiencies, esp. Set-top box and ContentH
om
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Reliance Communications
Margins 31.5% 31.9% 33.3%32.4%
Network expenses
- Decrease in network cost due to
savings in Power & Fuel,
Consumption of stores & spares and25.6% 27.0% 25.0%80%
90%
100%
ma ntenance
SG&A expenses
- Increase in SG&A due to increased16.5% 14.8% 15.7%
.
50%
60%
70%
lRevenue
Advertising, Sales & Marketing
expenses
Staff cost6.7%
6.9% 7.0% 7.1%
.
20%
30%
40%
%o
fTot
Access charges & LF17.6% . . .
0%
10%
4Q FY10 1Q FY11 2Q FY11 3Q FY11
Confidential 8 of 39
inspite of launch of multiple new businesses
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Reliance Communications an integrated telco
Wireless
Global Enterprise
Home
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Wireless Business
India, the worlds fastest growing & second biggest mobile market,
has fifteen telecom service providers.
,
4.4%2323
747Reliance
18%Aircel
7%
MTNL1%
MTS1%
2019 20
1617
1817
1817
19
500Tata
Idea12%
1819
v09
c09
n10
b10
ar
10
pr
10
y10
n10
ul10
g10
p10
ct10
v10
c10
21%
Vodafone17%
BSNL11%
12%
747 Mn wireless subscribers at the end of December 2010
RCOM (126 Mn)
N D J F M A
MJ J A S O N D
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RCOM has 18% of the CMS and adds around 2.8mn customers every month
Achieved landmark of 125mn customers last quarter
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In i n l m : F h n in l n
Wireless Business
Operators
Hyper competition - Number of players increased from 7 to 15 in last one year
Price Wars
Multiple product offerings with innovation on price and tariff cuts only
Call Rates
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2007 2010Intense Price cuts reduced the call rate from Rs.2/- in 2007 to just 1p in 2010
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Wireless Business
Dual technology advantage1
Data leader (HSD / EVDO)2
125 Million+ customer base3
3G License winner in 13 circles
(All 900 Mhz circles covered)4
Integrated Telco with segmented play5
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All this with only 7 years of existence in industry as compared to 15+ years
for competition
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Wireless Business
-
Won 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
rc es
2G + 3G Circles
Delhi & Mumbai
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Nationwide EVDO/ 3G footprint
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Wireless Business
3G services kick off in 3 key metros of Mumbai, Delhi & Kolkata and city of
Chandigarh on 13th December, 2010
Currently, 3G services are available in 25 cities and soon will be available in 140
cities
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Wireless Business
choice and value proposition across.
Coverage Customer choice1. 2.
HSD/Internet on the move Product & Service innovations3. 4.
5.
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Unmatched customer proposition
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Wireless Business
24,000 Towns
600,000 Villages
Voice Data VAS
CDMA GSM
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Seamless coverage wherever you go
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Wireless Business
Mobile Handheld Dongles
Voice
CDMA GSM
Video
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Wide options for Voice, Data & Video across CDMA & GSM platforms
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Wireless Business
Competitive differentiation
Fastest internet broadband service in Indias top 500+
cities
Seamless handover & connectivity through CDMA 1X
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
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Fastest internet connectivity under wireless platform
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Wireless Business
Group Talk Simply MusicTune Maker Nokia Life Tools
Bubbly (voice twitter)
WAP PortalApp Store Location Based Services
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Wireless Business
World-class design , fit out & ambience at
,
streets/Malls
High quality reach & national footprint
through 5,000 distributors & 1.2 million
retailers
,
force to cater to customers at their
premises
Dimensioned to handle over 35 mn salestransactions annually
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One of the largest retail distribution network in the industry
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Wireless Business
Revenue (Rs. Mn) EBITDA (Rs. Mn)
11,815 11,989 12,101 11,792
4 000
8,000
12,000
40,900 , , 40,644
20,000
40,000
0
4QFY10 1QFY11 2QFY11 3QFY11
0
4QFY10 1QFY11 2QFY11 3QFY11
EBITDA Margin
28.9% 28.9% 29.0%40%
60%
80%
.
0%
20%
4QFY10 1QFY11 2QFY11 3QFY11
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Short term impact due to competitive intensity and portfolio rebalancing
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Wireless Business
2Q10 3Q10 4Q10 1Q'11 2Q'11 3Q11
Changeover last 6 Qtrs.
Player 1 0.56 0.52 0.47 0.45 0.44 0.44 -21.4%
Player 2 0.56 0.51 0.47 0.44 0.42 0.42 -25.0%
RCOM 0.47 0.45 0.44 0.44 0.44 0.44 -6.4%
0.55
0.60Revenue Per Minute (Rs.)
0.45
0.50
0.40
2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11
RCOM Player 1 Player 2
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RCOM, the only operator which has held on to the RPM over last 4 quarters
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Reliance Communications an integrated telco
Wireless
Global Enterprise
Home
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Global Enterprise Business
Carrier Enter rise Consumer
Global Enterprise Business
Leading Enterprise servicesprovider in India
Among the Top 6 Leader-board of
Among Top 15 largestinternational long distance
carriers with over 14 billion
Offer virtualinternational calling
services to retailcustomers for calls to
Among Top 11 Managed Servicesproviders in the U.S. and Europe
Amongst Top 10 Data Centers in
Worlds largest privatesubmarine cable system ownerand capacity provider
Leadin NLD Infrastructure
200 internationaldestinations
2.5 million retailcustomers in 14
provider in Indiacountr es
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Scalable and proven infrastructure and capabilities are in place
to enable the next phase of growth
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Global Enterprise Business
Infrastructure Geared for exponential growth of application and content traffic1
2
3
CustomersDiverse base includes the largest data users in developed andemerging markets
Products & Services Complete suite of products to capture growth across the value chain
4 Organisation Multicultural, close to customer, strong on-the-ground presence
5 Financials Profitable growth momentum and strong cash generation
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N w rk r h
Global Enterprise Business
Own 277,000 RKms of optic fiber cable with landing points in 30 countries & worlds largest private underseacable 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
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Network connecting over 85% of the worlds population
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Global Enterprise Business
Nine data centres with level 3+ accreditation
more than 450 000 s ft of facilities s ace
Geographic redundancy
Wide & com lex a lication hosted
Core Banking, ATM/ Internet Banking
Complex ERP/ SAP Applications
.
Large Messaging Applications
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Expanding capacity to cater to fast growing demand
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Global Enterprise Business
Over 200 wholesale customers based on strong long term relationships with
Particularly strong in China, Asia, the Middle East and India.
Carrier
Enterprise
corporate customers
Among Top 6 Global Ethernet Service providers with over 1,200 customers;
, ,NASDAQ.
Serve 850 of top 1000 enterprises in India
Retail Over 2.5 million customers for our Reliance Global Call service in 14 countries
- U.S., Canada, U.K., Australia, New Zealand, Hong Kong, Singapore, France,Spain, Belgium, Netherlands, Austria, Ireland and India
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Wide customer base in Enterprise and Carrier segments
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Global Enterprise Business
Voice
Landlinere aid and
Wireless
Mobile
EnterpriseData
MPLS VPN
NLD/ILD
RelianceIndia Call
IDC
Hosting
Collaboration
VideoConferencin
BroadbandInternet
postpaid
E1PRI
SmartOfficeCentrex
FixedWireless
R World, R
LL, ELL
ManagedServices
IPLC
Intl Voice
Storage &HA services
Security
Data/Webconferencing
postpaid BBfor homes
EnterpriseInternet Voice
Networking
Call CenterSolutions
Audio conf
CNM
WDVPN
BPOs
Intl MPLSVPN
Professionalservices
ASP,
Internet forContenthosters
1 800 TollFreeServices
Intl TollFree
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One Stop Shop to Meet Enterprise Needs
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Global Business
25,000
Revenue (Rs. Mn) EBITDA (Rs. Mn)
3,5553,317 3,393
3,966
2,000
4,000
20,27818,137 18,391
19,233
10,000
15,000
20,000
0
4QFY10 1QFY11 2QFY11 3QFY11
0
5,000
4QFY10 1QFY11 2QFY11 3QFY11
EBITDA Margin
20%
30%
40%
17.5%18.3%
18.4%
20.6%
0%
10%
4QFY10 1QFY11 2QFY11 3QFY11
Confidential 30 of 39
Improved business performance with Global recovery
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Enterprise Business: Domestic
3,0008,000
Revenue (Rs. Mn) EBITDA (Rs. Mn)
, , ,2,267
1,000
2,000
, , ,6,184
4,000
6,000
0
4QFY10 1QFY11 2QFY11 3QFY11
0
,
4QFY10 1QFY11 2QFY11 3QFY11
EBITDA Margin
37.2% 36.6% 37.5% 36.7%40%
60%
0%
20%
4QFY10 1QFY11 2QFY11 3QFY11
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Short term impact due to pricing pressure in the market
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Reliance Communications an integrated telco
Wireless
Global Enterprise
Home
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H B i
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Home Business
Source : Industr Estimates
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DTH penetration at ~20%% of TV homes; gaining momentum
H B i
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Home Business
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
Interactive applications (iNews, iGames,r c e , oo ng, e c
Superior MPEG 4 technology
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Digital viewing experience will create revolution in TV entertainment platforms
H B i
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Home Business
BroadcastTV and Radio EPG / Mini EPG Mosaic Portal
Information News Stock
Entertainment
Advertisments
Game VoD / MoD / PVR Karaoke / Photo Album
Interactive Promotion Dedicated Advertiser Location
Messaging
SMS / MMS Mail Polling / Voting
Commerce Shopping / Banking
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Public Service T - Government / T - Learning
H B i
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Home Business
Reach and service
Content
250+ channels
20+ exclusive movie channelsin English, Hindi and other
6,500 towns
2,000+ exclusive Relianceretail stores
reg ona anguages
Interactive features Games,News, Cricket, Stocks,
Astrology, Cooking
24x7, 11 languagecustomer service
Experience
High-definition channels
Technology
MPEG 4
Digital Picture
Digital Sound
High-definition DVR box
Next generation easy-to-use guide
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Most advanced mini guide
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Reliance Communications an integrated telco
Wireless
Global Enterprise
Home
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Looking ahead
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Looking ahead
Drivers Impact
Increase revenue
generating ability
Financials at inflection point as GSM and 3Gmomentum scales up
RCOM not only reliant on wireless business forarge p pe ne o
untapped business tosupport growth
uture growt ; mass ve opportun ty n newersegments including DTH and expansion ofEnterprise/IDC
Operationalleverage improves margin &
profitability
o en a or un oc ng s are o er va ue asubsidiary level (Infratel, Globalcom, DTH)
Peak investment phase is over
Potential of unlockingshareholders value
Acquisition of DigiCable creates leadership positionin Indian Pay TV market
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Further integration of Telecom, Media and IT will be levers of future growth
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Thank ou