Grameenphone Ltd.

May, 2019

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1

Disclaimer

The following presentation is being made only to, and is only directed at, persons to whom

such presentation may lawfully be communicated (’relevant persons’). Any person who is not

a relevant person should not act or rely on this presentation or any of its contents.

Information in the following presentation relating to the price at which relevant investments

have been bought or sold in the past or the yield on such investments cannot be relied upon

as a guide to the future performance of such investments.

This presentation does not constitute an offering of securities or otherwise constitute an

invitation or inducement to any person to underwrite, subscribe for or otherwise acquire

securities in Grameenphone Ltd. The release, publication or distribution of this presentation

in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions

into which this presentation is released, published or distributed should inform themselves

about, and observe, such restrictions.

3

Mobile market

leader in a

fast-growing

economy

BANGLADESH AT A GLANCE

Sources: WorldBank, CIA Factbook

• GNI per capita of USD 1,330

• Largely a cash based economy

• Main sectors: Service, manufacturing and agriculture

• Stable inflation and currency performance

• Population of 168m, growing by >1% per year

• Young population, 47% below 25 years

• Expanding middle class

Age distribution Real GDP growth (Avg. of last 10 years)

28%

19%

40%

7% 6%

0-14 yrs 15-24 yrs 25-54 yrs 55-64 yrs >64 yrs

5.0%5.2%

5.9% 6.0%6.2%

Nigeria Kenya Sri Lanka Vietnam Bangladesh

Economics Demographics

4

5

Commercial operation of

HBTL (Hutchison Bangladesh

Telecom Ltd.) with AMPS

technology

1996

1997

3 major GSM players

currently named GP,

Banglalink and Robi came

into operation

1998

Mobile-Mobile

service launch 1999

Prepaid service

launch

2002

• 1mn subscriber

• Formation of Bangladesh

Telecommunication

Regulatory commission

2004

Launch of state owned

operator Teletalk as the

5th player

2005

• Introduction of SIM tax

• Launch of Warid Telecom as the

6th player

• Banglalink re-launch after

Orascom’s acquisition

26 YEARS OF MOBILE TELECOM SERVICES

• New interconnection

regime (ICX, IGW & IIG)

• Launch of separate

Broadband Wireless

Access (Wimax)

operation

2008

2009

• 90%+ population coverage

• 50 Mn subscribers

Entry of Airtel

Bangladesh by

acquiring Warid

Telecom

2010

2011

Renewal of 2G

spectrum for 15

years

2013

• 100 mn

subscribers

• 3G cellular

mobile phone

services

2016

Merger of Robi

and Airtel

SIM re-registration through

NID & Biometric

Verification System

1993

Launch of brand

name Citycell by

PBTL (restructured

HBTL)

2018 Launch of 4G

services

2019

Grameenphone

declared SMP

AN ATTRACTIVE AND GROWING MOBILE MARKET

DOMINATED BY PREPAID

• 159 million subscribers, of which 98% prepaid

• Multi-SIM market with around 58% real mobile penetration*

• 50% internet penetration*, rapidly increasing

• ARPU of around USD 2

• Scale benefit drives healthy margin for top 3 players

• Continuously developing regulatory landscape

6

Industry Subscribers (Mn)

*Based on estimation

**Subscriber adjustment due to bio-metric verification during 2016

120

134 126

145 157

2014 2015 2016** 2017 2018

GRAMEENPHONE IS THE UNDISPUTED MARKET LEADER,

WITH SOLID FINANCIAL PERFORMANCE

7

Revenues (BDT Bn) and EBITDA margin (%)*** Total revenue market shares*

• 6.5% revenue CAGR and 10.3% EBITDA CAGR in 5 years

• Growing EBITDA margin with efficiency improvements

• 17.7% operating cash flow CAGR with margin improvement

• 74.1 million subscribers and #1 brand in Bangladesh

• Largest network: 15,939 total sites out of which 5935 4G

• Widest distribution: More than 373k points of sales

**Airtel merged wih Robi from Q4'2016

*** EBITDA before other items

53% 53% 51% 53% 53% 54%

22% 22% 23% 22% 19% 18%

25% 25% 26% 24% 28% 28%

2013% 2014 2015 2016 2017 2018

Grameenphone Banglalink Robi

GRAMEENPHONE IS THE UNDISPUTED MARKET LEADER WITH

SOLID FINANCIAL PERFORMANCE

97 103 105

115

128 132.8

51% 53% 53%

55%

59% 60.70%

45%

50%

55%

60%

65%

70%

75%

80%

0

20

40

60

80

100

120

140

2013 2014 2015 2016 2017 2018

Revenue EBITDA Margin

1Q2019: STRONG BUSINESS PERFORMANCE DRIVEN BY

VOICE AND MARKET EXECUTION

8

*EBITDA before other items

**As per IAS 18

***Normalized for one-off items

Revenue (BDT Bn) and Growth (YoY)

31.2

32.6

34.3 34.7

34.9

2.0% 0.5%

3.4%

7.7%

11.6%

-2.0%

3.0%

8.0%

13.0%

18.0%

23.0%

28.0%

29.5

30.5

31.5

32.5

33.5

34.5

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

EBITDA* (BDT Bn) and Margin**

18.0

19.6

21.2 21.6

21.1

57.4% 60.2% 61.8% 62.2% 60.6%

30.0%

80.0%

130.0%

180.0%

230.0%

16.0

17.0

18.0

19.0

20.0

21.0

22.0

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

NPAT (BDT Bn) and Margin

6.4

10.8

8.9 9.1 8.9

20.5%

33.2% 25.9% 26.1% 25.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0

2

4

6

8

10

12

Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

• 11.6% YoY growth in total revenue

• 15.1% YoY growth in voice revenue driven

by 9.8% growth in subscriber base

• 2.8 Bn normalized EBITDA uplift

• One-off reversal of excess provision

• Normalized NPAT margin of 25.7%*

• One-off negative effect of BDT 518 Mn

in Q1’19 for VRS and business

transformation costs

Reached 6.8 Mn active 4G users

Q1 2019

5900+ LTE Sites

58% 4G Devices with 4G SIMs

38.2 Mn

data customers

27% of daily

traffic on 4G

12

Significant

Growth

Opportunities

VOICE SEGMENT REMAINS IMPORTANT AND STILL OFFERS

ATTRACTIVE GROWTH OPPORTUNITIES

13

• Real mobile penetration currently at approx. 58%,

expected to increase

• Affordability of marginal subscriber improving

• Leverage expanded network and distribution footprint

• Improving price perception and simplicity in offers

• Strengthen position in B2B, postpaid and youth

segment

AMPU and APPM (BDT)

168

194 203

234 216

0.68

0.59 0.56 0.58

0.67

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

0

50

100

150

200

250

2015 2016 2017 2018 3M 2019

AMPU APPM (BDT)

INCREASING DATA USAGE WILL BE THE PRIMARY

REVENUE GROWTH DRIVER GOING FORWARD

14

Data users and revenue contribution Average data usage (MB per month)

• 19% total data revenue growth in Q1’19 YoY

• Support from 3G/4G network coverage expansion

• Proliferation of affordable smartphones will be key

• Usage driven by video streaming, social media and OTT

• 72% of monthly active data users use facebook • Flagship ‘Digital Bangladesh’ vision of Government to act

as an enabler

284

488

651

1002

1397

2015 2016 2017 2018 3M 2019

28%

42%

48% 51% 52%

8%

12%

17% 19%

20%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0%

10%

20%

30%

40%

50%

60%

2015 2016 2017 2018 3M 2019

INVESTING IN NETWORKS TO CAPTURE DATA GROWTH

• 15,939** no of 3G sites is covering 95.2%** of population

• 5900+ 4G sites rolled out till Q1 2019

• Network modernization ongoing to consolidate superior

position

• Strong end-to-end fiber backhaul across the country

• Expansion of indoor coverage to address rapid

urbanization and vertical city expansion

• Constrained fixed broadband market

16

*Source: Company website (Q4 2018), data not yet published for Q1 2019

** End of Q4 2018

15939

5939

9519

7294

3G 4G 3G Population Coverage

GP Robi BL

3G/4G sites & Pop. coverage per operator*

95%

72%

17

Physical

Distribution has

been a Major

Strength

…WHILE PHYSICAL DISTRIBUTION REMAINS THE CORE,

DIGITAL DISTRIBUTION IS SHAPING UP

• Convenience is driving recharge through digital

channel

• Most digital interaction starts from physical location

• Bridging the digital and physical world with GP

Express stores i.e. integration of e-commerce platform

• Digitization of tools and processes to ensure

empowerment and efficiency of channel

18

Recharge through digital channels (% of sales)

0.1% 0.5%

8.2%

10.4% 11.7%

2013 2014 2015 2016 2017

0.50%

8.20%

10.40% 11.70%

17%

2014 2015 2016 2017 2018

COMMITMENT TO FURTHER EFFICIENCY

21

Technology Market Personnel Support

• New operating model for network management activities

• IT & network service contract re-negotiation and scope rationalization

• Rent reduction through contract negotiation with service provider

• Elimination of hard copy subscriber acquisition form with electronic version

• Optimization of channel incentives

• Increased sales through digital channels

• Optimized shift in digital media for market spending

• Optimization of support

and overhead costs

• Control over

discretionary costs

• Effect realization of

headcount efficiency

• Further exercise

ongoing for Head

Quarter staff

22

MANAGING RISKS IN THE BUSINESS ENVIRONMENT

While there are substantial challenges in the business environment, Grameenphone has more than 20 years

of experience in successfully managing regulatory and policy risks

Government’s Vision of

‘Digital Bangladesh’ Regulatory Developments Business Environment Management

• Realization of Digital Bangladesh

remains a political priority and

expected to enable growth in the

telecom industry

• Recognition of Telecom and ICT

sectors as enablers of economic

and socioeconomic development

• Numerous initiatives undertaken for

enabling local ecosystem for

software and IT services e.g. e-

government, public-private

partnerships

• Formulation of new regulations and

revision of existing ones through public

as well as industry consultation

• Nascent regulations regarding digital

services, but so far have been

conducive to continued growth i.e. e-

commerce policy

• Bangladesh Labour Act is under

review; anticipation of further clarity for

service sector employees

• Establishment as a trusted partner of

the Government as well as a service

provider, value creator and innovator

contributing towards Digital

Bangladesh vision

• Aspiration to strengthen

sustainability initiatives and role in

empowering society

• Considerable priority towards

managing regulatory and policy risks

by the company

• Collaboration with local and

international stakeholders

• Despite several rounds of consultations with BTRC and the auditors, our observations regarding the audit were ignored, especially

post February 2018.

• On 2 Apr’19, BTRC sent a demand of BDT 125.79 Bn payable within 10 working days from date of issuance of demand. BDT 84.94

Bn (Principle 22.99 Bn + Interest 61.94 Bn) was claimed by BTRC and BDT 40.86 Bn was claimed on behalf of NBR.

• After assessments, GP considers the demand unfounded and without any legal basis and accordingly on 16 Apr’19, GP responded

to BTRC requesting it to withdraw the claims and to enter into discussions with a view to find an amicable resolution.

• BTRC responded on 12 May’19 directing GP to make the full payment without any further delay. GP is in the process of assessing

this reply in order to determine the next course of action.

SMP

Regulations

• On 10 Feb’19 BTRC declared GP as SMP and subsequently issued 2 directives stating certain prohibitions towards GP on 18 Feb’

19. GP filed a writ petition challenging the above directives on 25 Feb’19.

• On 19 Mar’19, BTRC withdrew and cancelled the 2 directives issued on 18 Feb’19 and asked GP’s for feedback on 20 areas as cited

for further directives.

• On 31 Mar’19, GP responded to BTRC and denied to make any comment on 20 areas as the Letter did not contain any proposed

directives and no reason for issuing directives was given.

• On 12 May’19 BTRC issued a notice asking GP to provide feedback within 15 days on 4 new proposed remedies. GP is in the process

of assessing this notice in order to determine the next course of action.

QoS Reporting by

Regulator

BTRC

Audit

• On 18 Feb’19 BTRC published the QoS Drive test report in media without considering Industry observations regarding the drive test

methodology. GP along with the Industry rejected the report.

• On 3 Apr’19, BTRC has published QoS bench marking report for 4 division (Barishal, Khulna, Rajshahi & Rangpur).

• Call drop in GP network in all the 4 divisions are within KPI threshold. The industry and GP is still concerned about the non-aligned

drive test modalities .

Developing Regulatory Landscape

24

CONTINGENCIES

Sl. Items

Refer to Annual

Report 2018 and

1Q2019 Financial

Statements for details.

(https://www.grameenphone.

com/about/investor-

relations/ir-financial-report)

1 Information system audit by BTRC

2 SIM tax on replacement SIMs (2007 – 2011)

3 SIM tax on replacement SIMs (2012 – 2015)

4 Claim for VAT based on C&AG audit

5 VAT rebate on 2G license renewal fee

6 Interest on SIM Tax (2006 – 2007)

7 Interest for delayed payment of Guaranteed Annual Rent to

Bangladesh Railway

HEALTHY SHAREHOLDER RETURN

27

Total Shareholder Return** Payout Ratio and Dividend Yield*

• Dividend policy states at least 50% dividend payout of NPAT; last three years average payout was 101%

• Total shareholder return of 200% from 2013

• Outperformed local market index (DSEX) by 162 percentage points

*Considered closing price of prior trading session of record date

**Including dividend reinvestment and end period of 30 August 2018

220%

170%

120%

70%

20%

-30%

320%

270%

129%

109% 96%

105% 101% 98%

7.5%

4.9% 4.7% 5.9%

4.8%

3.2%

20 13 20 14 20 15 20 16 20 17 20 18 (Inter im )

129%

109%

96% 105% 101%

108%

7.5% 4.9% 4.7% 5.9% 4.8%

7.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

0%

20%

40%

60%

80%

100%

120%

140%

2013 2014 2015 2016 2017 2018

Investment & Payment to the Bangladesh Economy

27

19.3 21.1

14.5

34

4.2

2015 2016 2017 2018 3M 2019

Investment BDT Bn

17.14 Bn 4G License

Fees

• 16.9 Bn Capex in 2018 mainly for new 2G, 3G, LTE sites,

modernization

• BDT 20.3 Bn (58.1% of revenues) contributed to exchequer in the first quarter of 2019

• Contribution includes in the form of taxes, VAT, duties, fees, *4G license & spectrum assignment

51.1

58.6

61.8

71.5

2015 2016 2017 2018 3M 2019Payment to National Exchequer BDT Bn

51.1

58.6 61.8

71.5

20.3

2015 2016 2017 2018 3M 2019

12.7 Bn*

84.2

Summary

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Strong business performance in a challenging environment

EBITDA growth with strong margins

Building strong data network enabling personalization remains our focus for future growth & efficiency

Q1 2019 *In consideration of the local regulations, Grameenphone Ltd. does not provide any forward looking statements.