Reliance CommunicationsInvestor PresentationMay, 2012
Forward looking statements – Important Note    This presentation and the discussion that follows may contain “forward look...
Contents               Reliance Communications – an integrated telco                   Wireless                   Global E...
Reliance Communications   Journey so far….                                                              FY 2009 to FY 2012...
Reliance Communications Current position of our businesses               Pan India Voice and Data network               3G...
Reliance Communications      Strategy for focused and profitable growth    ess Wirele                                     ...
Reliance Communications  Financial Highlights                         Consolidated Revenue* (Rs. Mn)                      ...
Contents               Reliance Communications – an integrated telco                   Wireless                   Global E...
Wireless Business Strengths of Wireless Business                1        Widest Coverage and Product Portfolio            ...
Wireless Business Strengths of Wireless Business                1        Widest Coverage and Product Portfolio            ...
Wireless BusinessWidest Coverage – Pan India presence                            24,000 Towns                           60...
Wireless Business Widest Product Portfolio (Enhanced Data Offering)                Mobile Handheld                        ...
Wireless Business Strengths of Wireless Business                1        Widest Coverage and Product Portfolio            ...
Wireless Business Data Leadership : Leading the 2nd telecom revolution enabling “Wire Free” India       Srinagar          ...
Wireless Business   Reliance - Google Android Partnership            Reliance + Google                                    ...
Wireless BusinessDriving the entire Data eco-system                          Worry-free billing                          &...
Wireless BusinessDriving the entire Data eco-systemLaunch of CDMA tab…                           … & partnering with 3G Sm...
Wireless Business Strengths of Wireless Business                      2                1         Widest Coverage and Produ...
Wireless BusinessYouth & Innovation-centric Brand                                    Redefining Brand Positioning         ...
Wireless Business3G | The „Blue Bot‟ campaignConfidential                   20 of 41
Wireless BusinessReliance 3G TabConfidential           21 of 41
Wireless Business3G Mobile - Just 3G Vs Reliance 3GKey proposition “Switch to Reliance for the fastest 3G experience”  Imp...
Wireless Business Strengths of Wireless Business                      2                1         Widest Coverage and Produ...
Wireless Business Quality of Minutes                  0.54                          0.52                  0.52            ...
Wireless Business Financial Performance                                 Revenue (Rs. Mn)                                  ...
Contents               Reliance Communications – an integrated telco                   Wireless                   Global E...
Global Enterprise Business Overview                                         Global Enterprise Business                Carr...
Global Enterprise Business Carrier business: Global connectivity & assets        Own 277,000 RKms of optic fiber cable wit...
Global Enterprise Business Enterprise business : Enterprise Managed Network      Global Connectivity                Global...
Global Enterprise Business Enterprise business : Biggest Data center player in India with more than 550,000 sq ft of space...
Global Enterprise Business Consumer business : Calling g services to 160+ countries across the globe                      ...
Global Enterprise Business Global presence and strong customer base       Over 2,100 enterprise and 2.5 million retail cus...
Global Enterprise Business Financial Performance                                 Revenue (Rs. Mn)                         ...
Contents               Reliance Communications – an integrated telco                   Wireless                   Global E...
Home Business Indian Cable & Satellite Market     200     180                                                             ...
Home Business Reliance Digital TV (DTH)         Industry‟s 1st offerings of its kind - All 250         channels in High De...
Home Business Digital TV Services: Complete suite of services                      BroadcastTV and Radio   EPG / Mini EPG ...
Home Business The 4 Pillars of Growth                      Content                  Reach and service               250+ c...
Contents               Reliance Communications – an integrated telco                   Wireless                   Global E...
Reliance Communications Drivers for future growth and shareholder value                         Drivers                   ...
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Rcom investor ppt_may_2012

  1. 1. Reliance CommunicationsInvestor PresentationMay, 2012
  2. 2. Forward looking statements – Important Note This 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.Confidential 2 of 41
  3. 3. Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeawaysConfidential 3 of 41
  4. 4. Reliance Communications Journey so far…. FY 2009 to FY 2012 Mobile CDMA , GSM, 3G, Netconnect FY 2007 & FY 2008 3G FY 2005 & FY 2006 Globalcom FLAG Telecom, Vanco, Yipes, Falcon & NGN Mobile CDMA Service Enterprise IDC Mobile Infratel CDMA Service 200K slots; deepest backhaul Globalcom Digital Reliance Digital TV, IPTV, DigiCom Globalcom Enterprise Foundation Growth Integration Evolution path towards a profitable integrated TelcoConfidential 4 of 41
  5. 5. Reliance Communications Current position of our businesses Pan India Voice and Data network 3G license in 13 circles (highest number of circles by single Wireless operator) Data leadership – Widest footprint of wireless high speed data Largest global private submarine cable network, blue-chip global clientsGlobal One stop shop for all large corporates and SMBs forEnterprise communications, networking and IT infrastructure needs Amongst Top 10 Data Centers in the world and # 1 in IndiaInfratel 200k+ slots, unique ability to provide space and connectivity Rapidly growing national DTH business, rich content accessHome Industry‟s 1st offering of its kind – All 250 channels in High Definition like quality Strong market presence in every business 5 of 41Confidential
  6. 6. Reliance Communications Strategy for focused and profitable growth ess Wirele 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 infrastructurebal Enterprise Glob Netherland Spain Canada UK London Netherland Austria FranceRussia Germany Belgium Switzerland Japan and bandwidth Germany d Belgium Austria USA Italy France Switzerland SaudiArabia Italy Bahrain UAE China Japan Complete NGN Mediterranean and continue to maintain leadership in the Carriers Carrier Spain Qatar Pakistan Qatar Oman Pakistan Bahrain India SouthKorea HongKong market Oman Bangladesh SaudiArabia Taiwan NigeriaSudan Sudan UAE Malaysia Malaysia HongKong Taiwan Increasing IDC capacity and launching new high margin product/service lines SriLanka NewZealand Expanding Managed Services portfolio for higher share of customer‟s wallet and to increase Nigeria SouthKorea Australia South SouthAfrica Africa NewZealand stickiness of our products tel Infrat Maximize revenues from existing assets of Towers, OFC & Ducts Huge potential of value unlocking for Reliance Communication shareholders Infratele Home 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 ContentConfidential 6 of 41
  7. 7. Reliance Communications Financial Highlights Consolidated Revenue* (Rs. Mn) Consolidated EBITDA* (Rs. Mn) 250,000 221,323 231,076 100,000 90,816 203,823 200,000 78,205 75,000 64,899 150,000 50,000 100,000 50,000 25,000 0 0 FY 10 FY 11 FY 12 FY10 FY11 FY12 EBITDA Margin 60% 39.3% 40% 35.3% 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 competitive environmentConfidential 7 of 41
  8. 8. Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeawaysConfidential 8 of 41
  9. 9. Wireless Business Strengths of Wireless Business 1 Widest Coverage and Product Portfolio 2 Data Leadership ( 3G, High Speed Data & 1x) 3 Youth & Innovation Centric Brand 4 Focus on Quality of Minutes All this with only 6 years of existence in industry, as compared to 15+ years for competitionConfidential 9 of 41
  10. 10. Wireless Business Strengths of Wireless Business 1 Widest Coverage and Product Portfolio 2 Data Leadership ( 3G, High Speed Data & 1x) 3 Youth & Innovation Centric Brand 4 Focus on Quality of Minutes All this with only 6 years of existence in industry, as compared to 15+ years for competitionConfidential 10 of 41
  11. 11. Wireless BusinessWidest Coverage – Pan India presence 24,000 Towns 600,000 Villages 1 Billion Indians Data Voice VAS 3G HSD CDMA GSMConfidential 11 of 41
  12. 12. Wireless Business Widest Product Portfolio (Enhanced Data Offering) Mobile Handheld Dongles / Tabs 3G HSPA CDMA HSD Voice CDMA GSM Data Video Wide options for Voice, Data & Video across CDMA & GSM platformsConfidential 12 of 41
  13. 13. Wireless Business Strengths of Wireless Business 1 Widest Coverage and Product Portfolio 2 Data Leadership ( 3G, High Speed Data & 1x) 3 Youth & Innovation Centric Brand 4 Focus on Quality of Minutes All this with only 6 years of existence in industry, as compared to 15+ years for competitionConfidential 13 of 41
  14. 14. Wireless Business Data Leadership : Leading the 2nd telecom revolution enabling “Wire Free” India Srinagar High speed data internet (3G, HSD) Number of 3G towns 333 Number of HSD towns ~1,000 Total high speed ~1,300 internet towns towns Imphal Porbandar Mobile internet (1X , EDGE) Guntur 3G circles: Top towns with 3G, Total towns with 20,000 + rest with EDGE coverage Mobile Internet towns Non-3G circles: Top towns with HSD, rest with 1X coverage Kanyakumari Offering the widest footprint of High Speed Data across the length and breadth of IndiaConfidential 14 of 41
  15. 15. Wireless Business Reliance - Google Android Partnership Reliance + Google Android Community: Brands Co-marketing Special Data Offer + Android Experience Exclusive Customer Zone at Reliance Retail Best Experience of Care Outlets Google Mobile Services Objective is to create innovative products, marketing and quality service levels to change the Smartphone landscape in IndiaConfidential 15 of 41
  16. 16. Wireless BusinessDriving the entire Data eco-system Worry-free billing & tariffs with ‘My Best Plan’ Enabling device ecosystem through proprietary tab & partner handsets Signed marquee partnership with Google on Android to drive data Several S&D initiatives to expand usage on mobile devices data distribution reachConfidential 16 of 41
  17. 17. Wireless BusinessDriving the entire Data eco-systemLaunch of CDMA tab… … & partnering with 3G Smartphone Leaders Samsung Wave 525 Wave 3 Galaxy S+ Galaxy R Galaxy Note Galaxy Tab 620 Reliance HSD Network HTC LG Android OS 2.3 7 inch Thin Film Transistor (TFT) capacitive multi-touch screen HTC Rhyme Optimus Optimus Net Optimus Optimus Net Dual SIM Hub SOL Dual camera (front and rear) Wi-Fi & Bluetooth enabled Tie-up with Samsung, HTC & LG for Personal Wi-Fi Hotspot ten new smartphones and one tabletConfidential 17 of 41
  18. 18. Wireless Business Strengths of Wireless Business 2 1 Widest Coverage and Product Portfolio 2 Data Leadership ( 3G, High Speed Data & 1x) 3 Youth & Innovation Centric Brand 4 Focus on Quality of Minutes All this with only 6 years of existence in industry, as compared to 15+ years for competitionConfidential 18 of 41
  19. 19. Wireless BusinessYouth & Innovation-centric Brand Redefining Brand Positioning 3G Mobile Data 2G Mobile Own Innovation Establish Supremacy Instill Trust/ Reliability Always ahead in launching 3G propositions Enable the wirefree India Gain share in the GSM (devices, apps, content vision, rooted on speed, market, with improved coverage and wireless network and customer etc.) and owning platform experience „innovation‟ mindspace in the category (Reliance Promise)Confidential 19 of 41
  20. 20. Wireless Business3G | The „Blue Bot‟ campaignConfidential 20 of 41
  21. 21. Wireless BusinessReliance 3G TabConfidential 21 of 41
  22. 22. Wireless Business3G Mobile - Just 3G Vs Reliance 3GKey proposition “Switch to Reliance for the fastest 3G experience” Impact Property India v/s England Series, Presenting sponsorship of over 250 properties covering movies & sportsConfidential 22 of 41
  23. 23. Wireless Business Strengths of Wireless Business 2 1 Widest Coverage and Product Portfolio 2 Data Leadership ( 3G, High Speed Data & 1x) 3 Youth & Innovation Centric Brand 4 Focus on Quality of Minutes All this with only 6 years of existence in industry, as compared to 15+ years for competitionConfidential 23 of 41
  24. 24. Wireless Business Quality of Minutes 0.54 0.52 0.52 0.51 0.50 0.48 0.47 0.46 0.47 0.45 0.45 0.44 0.45 0.45 0.45 0.45 0.45 0.44 0.44 0.45 0.44 0.44 0.44 0.44 0.44 0.43 0.43 0.43 0.44 0.43 0.42 0.42 0.43 0.42 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 despite intense pricing pressureConfidential 24 of 41
  25. 25. Wireless Business Financial Performance Revenue (Rs. Mn) EBITDA (Rs. Mn) 44,170 44,471 45,055 43,267 11,727 11,756 11,823 12,022 40,000 12,000 8,000 20,000 4,000 0 0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY12 2QFY12 3QFY12 4QFY12 EBITDA Margin 40% 27.1% 26.6% 26.7% 30% 26.6% 20% 10% 0% 1QFY12 2QFY12 3QFY12 4QFY12 Stable revenue and margins in hyper-competitive environmentConfidential 25 of 41
  26. 26. Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeawaysConfidential 26 of 41
  27. 27. Global Enterprise Business Overview Global Enterprise Business Carrier Enterprise Consumer Among Top 15 largest Leading Enterprise services 2.5 million retail international long distance provider in India customers in 14 carrier with over 15 billion countries Among the Top 6 Leader-board of minutes of traffic global Ethernet service providers 380 corporates have World’s largest private Among Top 11 Managed Services contracted these submarine cable system owner services in 3 continents providers in the U.S. and Europe and capacity provider 1.25 million broadband (Gartner Report March 2010) Leading NLD Infrastructure customers in India Amongst Top 10 Data Centers in provider in India the 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 businessConfidential 27 of 41
  28. 28. Global Enterprise Business Carrier business: Global connectivity & assets Own 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 Global Network Long Distance Network in India Network connecting over 85% of the world‟s populationConfidential 28 of 41
  29. 29. Global Enterprise Business Enterprise business : Enterprise Managed Network Global Connectivity Global Network 60,000+ managed sites with reach in 160 countries and territories Metro Ethernet connectivity across 26 Metros outside India High Capacity Access Network customized to meet Customer Demand Unparalleled global reach and depth of networkConfidential 29 of 41
  30. 30. Global Enterprise Business Enterprise business : Biggest Data center player in India with more than 550,000 sq ft of space 18 (9 India; 9 Outside India) Data centers across the globe with more than 550,000 sq ft of facilities space Geographic redundancy Wide & complex application hosted Core Banking, ATM/ Internet Banking Complex ERP/ SAP Applications Complex Intranet/ Customized Apps. Large Messaging Applications Expanding capacity to cater to fast growing demandConfidential 30 of 41
  31. 31. Global Enterprise Business Consumer business : Calling g services to 160+ countries across the globe Innovative Product Suite Global Reach Retail 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 31 of 41
  32. 32. Global Enterprise Business Global presence and strong customer base Over 2,100 enterprise and 2.5 million retail customer base outside India Over 200 carrier customers based on strong long term relationships with over 70% repeat Carrier orders; Particularly strong in Asia, the Middle East and India Among Top 5 Managed Network Service providers with over 200 global corporate customers Among Top 6 Global Ethernet Service providers Enterprise with over 1,200 customers in US alone; # 1 or # 2 service provider to world‟s top exchanges including CME, NYSE, NASDAQ. Serve 850 of top 1000 enterprises in India Over 2.5 million retail customers in 14 countries including U.S, Canada, U.K., Australia, New Zealand, Hong Kong, Singapore, France, Consumer Canada, Spain, Belgium, Netherlands, Austria and India 1.25 million broadband customers in India 32 of 41Confidential
  33. 33. Global Enterprise Business Financial Performance Revenue (Rs. Mn) EBITDA (Rs. Mn) 30,000 8,000 23,353 23,516 24,395 22,916 5,893 5,643 5,694 5,694 22,500 6,000 15,000 4,000 7,500 2,000 0 0 1QFY12 2QFY12 3QFY12 4QFY12 1QFY12 2QFY12 3QFY12 4QFY12 EBITDA Margin 40% 30% 24.6% 24.4% 20% 24.2% 24.2% 10% 0% 1QFY12 2QFY12 3QFY12 4QFY12 From 1Q FY‟12 onwards, RCOM is reporting combined Global and Enterprise business units as a single operating business unit. Synergies to improve operational efficienciesConfidential 33 of 41
  34. 34. Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeawaysConfidential 34 of 41
  35. 35. Home Business Indian Cable & Satellite Market 200 180 18 160 20 22 140 26 120 33 41 Cable Dark 100 110 47 108 C&S 80 105 98 DTH 60 90 40 83 70 20 41 50 21 32 2 5 12 0 2007 2008 2009 2010 2011E 2012E 2013E Source : Industry y Estimates DTH penetration at ~20%% of TV homes; gaining momentumConfidential 35 of 41
  36. 36. Home Business Reliance Digital TV (DTH) Industry‟s 1st offerings of its kind - All 250 channels in High Definition like quality Pioneering HD experience in India Pioneering DVR – “Watch when you want” Key service differentiators More 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 platformsConfidential 36 of 41
  37. 37. Home Business Digital TV Services: Complete suite of services BroadcastTV and Radio EPG / Mini EPG Mosaic Portal Information News Stock Entertainment Game VoD / MoD / PVR Karaoke / Photo Album Services Advertisments Interactive Promotion Dedicated Advertiser Location Messaging SMS / MMS Mail Polling / Voting Commerce Shopping / Banking Public Service T - Government / T - LearningConfidential 37 of 41
  38. 38. Home Business The 4 Pillars of Growth Content Reach and service 250+ channels 8,100 towns 8 exclusive movie channels in 2,000+ exclusive Reliance English, Hindi and other retail stores regional languages 24x7, 11 language Interactive features – Games, customer service Shopping, Kids, Stocks, Astrology, Cooking High-definition channels Technology Experience MPEG 4 High-definition DVR box Digital Picture Next generation easy-to- Digital Sound use guide Most advanced mini guideConfidential 38 of 41
  39. 39. Contents Reliance Communications – an integrated telco Wireless Global Enterprise Home Key takeawaysConfidential 39 of 41
  40. 40. Reliance Communications Drivers for future growth and shareholder value Drivers Impact Peak investment phase over: RCOM continues to Increase revenue be free cash flow positive. This trend to continue in generating ability succeeding years Financials at inflection point as GSM and 3G Operational momentum scales up leverage improves margin & profitability Besides wireless, massive opportunity exists in expansion of Enterprise / IDC and newer segments including DTH Potential of unlocking Potential for unlocking shareholder value at shareholders value subsidiary level (Infratel, Global Enterprise, DTH) Stable business performance with significant free cash flow generation to place RCOM in a much stronger financial positionConfidential 40 of 41
  41. 41. Thank you
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