Quarterly report on the results for the first quarter ended June 30, 2009




                                            ...
Supplemental Disclosures

Safe Harbor: - Some information in this report may contain         as described above are provid...
TABLE OF CONTENTS

                                                                                              4
Section...
Section 1

                                      BHARTI AIRTEL – PERFORMANCE AT A GLANCE

                                ...
Section 2

                                                         AN OVERVIEW


2.1       Introduction                  ...
assigned to Indus with effect from 1st Jan 2009. Indus          across our networks. IBM has been working closely with us ...
Section 3
                                                 FINANCIAL HIGHLIGHTS
This section presents the (1) audited fina...
3.2      Segment - wise Summarized Statement of Operations

3.2.1    Mobile Services - comprises of consolidated statement...
3.2.5      Passive Infrastructure Services – represents Bharti Infratel Ltd, and comprises of passive infrastructure being...
SECTION 4

                                                  OPERATING HIGHLIGHTS
The financial figures used for computing...
4.3       Telemedia Services

                                                                          June 30,      Marc...
4.7    Human Resource Analysis

                                              June 30,    March 31,   Q-on-Q   June 30,   ...
SECTION 5

                                              MANAGEMENT DISCUSSION AND ANALYSIS

5.1           Key Industry an...
•   Bharti Airtel marked its entry in the cloud computing space       distinguished by their contributions to business, ar...
5.2        Results of Operations

The company has reported its (1) audited financial results for the quarter ended June 30...
The average monthly churn for the quarter ended June 30, 2009        respectively. The EBITDA margin for this segment was ...
SECTION 6

                                                STOCK MARKET HIGHLIGHTS

6.1        General Information

Shareh...
6.3              Bharti Airtel Daily Stock price (BSE) and Volume (Combined of BSE & NSE) Movement

                      ...
SECTION 7

                                    Use of Non-GAAP Financial Information
In presenting and discussing the Comp...
7.1       Reconciliation of Non-GAAP financial information based on USGAAP

7.1.1     Consolidated
                       ...
7.1.1        Consolidated (cont.)

                                                                         Amount in Rs m...
7.1.3        Telemedia Services
                                                                      Amount in Rs million...
7.1.6    Passive Infrastructure Services
                                                                 Amount in Rs mil...
7.2      Schedules to Financial Statements


7.2.1    Schedule of Cost of services
                                       ...
7.2.5   Schedule of Finance cost (net)
                                          Amount in Rs million
                    ...
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
Airtel Quarterly Report Q1
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Airtel Quarterly Report Q1

  1. 1. Quarterly report on the results for the first quarter ended June 30, 2009 Bharti Airtel Limited (Incorporated as a public limited company on July 7, 1995 under the Companies Act, 1956) Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi – 110 070, India July 23, 2009 The financial statements included in this quarterly report fairly presents in all material respects the financial condition, results of operations, cash flows of the company as of, and for the periods presented in this report. Mobile Services I Enterprise Services Telemedia Services I
  2. 2. Supplemental Disclosures Safe Harbor: - Some information in this report may contain as described above are provided solely for the convenience forward-looking statements. We have based these forward- of the reader, and no representation is made that the Indian looking statements on our current beliefs, expectations and Rupees or United States dollar amounts referred to herein intentions as to facts, actions and events that will or may could have been or could be converted into United States occur in the future. Such statements generally are identified dollars or Indian Rupees respectively, as the case may be, by forward-looking words such as “believe,” “plan,” at any particular rate, the above rates or at all. Any “anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or discrepancies in any table between totals and sums of the other similar words. amounts listed are due to rounding off. Information contained on our website www.airtel.in is not part of this A forward-looking statement may include a statement of the Quarterly Report. assumptions or bases underlying the forward-looking statement. We have chosen these assumptions or bases in Use of Certain Non-GAAP measures: - This result good faith, and we believe that they are reasonable in all announcement contains certain information on the material respects. However, we caution you that forward- Company’s results of operations and cash flows that have looking statements’ and assumed facts or bases almost been derived from amounts calculated in accordance with always vary from actual results, and the differences United States Generally Accepted Accounting Principles between the results implied by the forward-looking (US GAAP), but are not in themselves US GAAP measures. statements and assumed facts or bases and actual results They should not be viewed in isolation as alternatives to the can be material, depending on the circumstances. You equivalent US GAAP measures and should be read in should also keep in mind that any forward-looking statement conjunction with the equivalent US GAAP measures. made by us in this report or elsewhere speaks only as of the Further, disclosures are also provided under “Use of date on which we made it. New risks and uncertainties Non - GAAP financial information” on page 19 come up from time to time, and it is impossible for us to predict these events or how they may affect us. We have no Others: - In this report, the terms “we”, “us”, “our”, “Bharti”, duty to, and do not intend to, update or revise the forward- or “the Company”, unless otherwise specified or the context looking statements in this report after the date hereof. In otherwise implies, refer to Bharti Airtel Limited (“Bharti light of these risks and uncertainties, any forward-looking Airtel”) and its subsidiaries, Bharti Hexacom Limited (“Bharti statement made in this report or elsewhere may or may not Hexacom”), Bharti Airtel Services Limited, Bharti Infratel occur and has to be understood and read along with this Limited (Bharti Infratel), Bharti Telemedia Limited (Bharti supplemental disclosure. Telemedia), Bharti Airtel (USA) Limited, Bharti Airtel (UK) Limited, Bharti Airtel (Canada) Limited, Bharti Airtel (Hong General Risk: - Investment in equity and equity related Kong) Limited, Bharti Airtel Lanka (Private) Limited, Bharti securities involve a degree of risk and investors should not Airtel (Singapore) Private Ltd, Network i2i Limited, Bharti invest any funds in this Company unless they can afford to Airtel Holdings (Singapore) Pte Ltd, Bharti Infratel Lanka take the risk of losing their investment. For taking an (Private) Limited (subsidiary of Bharti Airtel Lanka (Private) investment decision, investors must rely on their own Limited) and Bharti Infratel Ventures Limited (subsidiary of examination of Bharti Airtel including the risks involved. Bharti Infratel). Convenience translation: - We publish our financial Disclaimer: - This communication does not constitute an statements in Indian Rupees. All references herein to offer of securities for sale in the United States. Securities “Indian Rupees” and “Rs.” are to Indian Rupees and all may not be sold in the United States absent registration or references herein to “US dollars” and “US$” are to United an exemption from registration under the U.S. Securities Act States dollars. All translations from Indian Rupees to United of 1933, as amended. Any public offering of securities to be States dollars were made (unless otherwise indicated) using made in the United States will be made by means of a the rate of Rs. 47.87 = US $1.00, being the RBI Reference prospectus and will contain detailed information about the rate as announced by the Reserve Bank of India on June Company and its management, as well as financial 30, 2009. All amounts translated into United States dollars statements. Page 2 of 43
  3. 3. TABLE OF CONTENTS 4 Section 1 - Bharti Airtel – Performance at a glance 5 Section 2 - An Overview Section 3 - Financial Highlights as per US GAAP 3.1 Consolidated - Summary of Consolidated Financial Statements 7 3.2 Segment-wise Summarized Statement of Operations 8 3.3 Segment-wise Investments and Contribution 9 10 Section 4 - Operating Highlights Section 5 - Management Discussion and Analysis 5.1 Key Industry and Company Developments 13 5.2 Results of Operations 15 17 Section 6 - Stock Market Highlights 19 Section 7 – Use of Non-GAAP Financial Information Annexure - Detailed Financial and Related Information A.1 Consolidated Financial Statements as per US GAAP 26 A.2 Trend and Ratio Analysis 29 A.3 Key Accounting Policies as per US GAAP 33 A.4 Summarized Consolidated Profit and Loss Statement as per Indian GAAP 37 A.5 Summary of differences in net income / profit between US GAAP and Indian GAAP 37 38 Glossary Page 3 of 43
  4. 4. Section 1 BHARTI AIRTEL – PERFORMANCE AT A GLANCE Quarter Full Year Ended March 31, Ended Particulars UNITS June 30, 2006 2007 2008 2009 5 2009 Total Customer Base 000’s. 20,926 39,013 64,268 96,649 105,196 Mobile Services 000’s. 19,579 37,141 61,985 93,923 102,368 Telemedia Services 000’s. 1,347 1,871 2,283 2,726 2,828 Consolidated financials as per US GAAP Revenue INR Mn. 116,215 185,196 270,250 369,615 99,416 EBITDA INR Mn. 43,374 74,508 113,715 151,678 41,518 Cash profit from operations INR Mn. 40,862 73,070 111,374 140,065 44,123 Income before income taxes INR Mn. 25,366 48,860 76,537 93,073 30,088 Net income INR Mn. 22,567 42,571 67,008 84,699 25,167 Consolidated financials as per US GAAP Revenue US$ Mn. 2,613 4,297 6,753 7,254 2,077 EBITDA US$ Mn. 975 1,729 2,841 2,977 867 Cash profit from operations US$ Mn. 919 1,695 2,783 2,749 922 Income before income taxes US$ Mn. 570 1,134 1,912 1,827 629 Net income US$ Mn. 507 988 1,674 1,662 526 Key Ratios EBITDA Margin % 37.3% 40.2% 42.1% 41.0% 41.8% Net Profit Margin % 19.4% 23.0% 24.8% 22.9% 25.3% Net Debt to Stockholders Equity 5 Times 0.45 0.31 0.19 0.23 0.14 Return on Stockholders Equity % 29.5% 37.4% 38.0% 32.5% 31.8% Return on Capital employed % 21.3% 28.2% 31.7% 30.4% 28.5% 1. Annual financial highlights for the year ended March 31, 2006, 2007, 2008 and 2009 are based on consolidated audited results as per United States Generally Accepted Accounting Principles (US GAAP). 2. Financial highlights for the quarter ended June 30,2009 are audited and are based on the consolidated results as per United States Generally Accepted Accounting Principles (US GAAP). 3. Income before income taxes for the full year ended March 31, 2007, March 31, 2008 and March 31, 2009 are after fringe benefit tax. 4. Exchange rate for Rupee conversion to US$ is (a) Rs. 44.48 for the financial year ended March 31, 2006 (b) Rs. 43.10 for the financial year ended March 31, 2007 (c) Rs. 40.02 for the financial year ended March 31, 2008, being the noon buying rate as announced by The Federal Reserve Bank of New York at the end of the respective periods, (d) Rs.50.95 for the financial year ended March 31, 2009 and, (e) Rs 47.87 for the quarter ended June 30, 2009, being the RBI Reference rate as announced by The Reserve Bank of India at the end of the respective periods. 5. Net Debt to Stockholders Equity for the period amounts to 0.05 times exclusive of fully and compulsory convertible, non-cumulative, unsecured and interest free Debentures. Page 4 of 43
  5. 5. Section 2 AN OVERVIEW 2.1 Introduction The strategy of our Telemedia business is to focus on cities with high revenue potential, except for DTH which is an all- We are one of Asia’s leading providers of telecommunication India offering. Airtel digital TV is available to customers services with presence in all the 22 licensed jurisdictions through more than 45,000 retail points in over 5,000 cities and (also known as Telecom Circles) in India, and in Srilanka. towns across the country. We served an aggregate of 105,195,762 customers as of June 30, 2009; of whom 102,367,881 subscribe to our GSM Enterprise Services - Enterprise Services provides a broad services and 2,827,881 use our Telemedia Services either portfolio of services to large Enterprise and Carrier customers. for voice and/or broadband access delivered through DSL. We are regarded as the trusted communications partner to We are the largest wireless service provider in the country, India's leading organizations, helping them to meet the based on the number of subscribers as of June 30, 2009. challenges of growth. We also offer an integrated suite of telecom solutions to our enterprise customers, in addition to providing long distance We provide long distance wholesale voice and data services connectivity both nationally and internationally. We have to carrier customers as well as to other business units of recently forayed into media by launching our DTH and IPTV Airtel. We own a state of the art national and international long Services. All these services are rendered under a unified distance network infrastructure enabling it to provide brand “Airtel”. connectivity services both within India and connecting India to the world. Our national long distance infrastructure comprises The company also deploys, owns and manages passive of 104,540 Rkms of optical fibre, over 1,500 MPLS and SDH infrastructure pertaining to telecom operations under its POPs and over 1,500 POIs with the local exchanges, subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of providing a pan India reach. Indus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in The international infrastructure includes ownership of the i2i India. submarine cable system connecting Chennai to Singapore, consortium ownership of the SMW4 submarine cable system 2.2 Business Divisions and investment in capacities across a number of diverse submarine cable systems across transatlantic and transpacific Mobile Services - We offer mobile services using GSM routes. In past we have announced investments in new cable technology on 900MHz and 1800MHz bands, and are the systems such as Asia America Gateway (AAG), India Middle largest wireless service provider in the country, based on the East and Western Europe (IMEWE), Unity North, EIG (Europe number of customers. Our 102,367,881 mobile customers India Gateway) and East Africa Submarine System (EASSy). accounted for a customer market share of 24% of wireless market, as on June 30, 2009. We also deliver end to end telecom solutions to India’s large corporates. We serve as the single point of contact for all We offer post-paid, pre-paid, roaming and value added telecommunication needs for corporate customers in India by services through our extensive sales and distribution providing full suite of communication services across data, channel covering 1,272,314 outlets. voice and managed services. Our network is present in 5,067 census towns and 423,149 We specialize in providing customized solutions to address non-census towns and villages in India, thus covering unique requirements of different industry verticals; BFSI, IT, approximately 82% of the country’s population. Our services ITeS, Manufacturing and distribution, media, education, are now fully operational in Sri Lanka. These services have telecom, Government, PSUs and retail among others. been launched on a state-of-the-art 3.5G network. These services include; Internet, MPLS -VPN, domestic and Telemedia Services – We provide broadband (DSL) and international private leased circuits, Satellite services (VSAT), telephone services (fixed line) in 95 cities with growing focus Audio and Video conferencing, Data centre services, on new media and entertainment solutions such as DTH and Managed network services, corporate value added services, IPTV. We had 2,827,881 customers as on June 30, 2009 of EPBX, Centrex, Contact centre solutions, Toll free services which 40.3% were subscribing to broadband/ internet and Mobile enterprise enablement solutions. services. Our product offerings in this segment include supply and installation of fixed-line telephones providing Passive Infrastructure Services – Bharti Infratel provides local, national and international long distance voice passive infrastructure services on a non-discriminatory basis connectivity and broadband Internet access through DSL. to all telecom operators in India. Bharti Infratel deploys, owns and manages passive infrastructure in 11 circles of India. We also remain strongly committed to our focus on Small Infratel also holds 42% share in Indus Towers (a Joint Venture and Medium Business enterprises. We provide a range of between Bharti Infratel, Vodafone and Idea Cellular). Indus customised Telecom/ IT solutions and aim to achieve operates in 16 circles (4 circles common with Infratel, 12 revenue leadership in this rapidly growing segment of the circles on exclusive basis). ICT market. Bharti Infratel has 28,078 towers in 11 circles, excluding the 35,066 towers in 12 circles for which the right of use has been Page 5 of 43
  6. 6. assigned to Indus with effect from 1st Jan 2009. Indus across our networks. IBM has been working closely with us to Towers has a portfolio of 97,925 towers including the towers transform our IT system, key business processes and under right of use. establishing an enterprise integration platform. Telephone services and long distance networks equipment partners 2.3 Partners include Siemens, CISCO, WIPRO, Alcatel Lucent and Tellabs among others. Nortel, IBM Daksh, Mphasis, Firstsource, Strategic Equity Partners - We have a strategic alliance Teleperformance, Aegis and HTMT are associated with us for with SingTel, which has enabled us to further enhance and providing excellent customer experience through dedicated expand our telecommunications networks in India to provide call center operations. We have a strategic partnership with quality service to our customers. The investment made by Infosys to provide a suite of products, including devices, SingTel in Bharti is one of their largest investments made in application servers and interactive applications to enhance the world outside Singapore. digital lifestyle for our customers. We work with globally renowned organizations such as On Mobile, Comviva, Yahoo, Equipment and Technology Partners - We have Google and Cellebrum among others to provide each of our established strong alliances with equipment and technology customers with a unique experience in the areas of partners who share the same drive for the development of cRBT(caller ring back tone), Music on Demand, Email innovative solutions. Ericsson, Nokia Siemens and Huawei services and other Airtel Live applications. are equipment partners supporting our aggressive expansion plans by deploying state of the art technology Page 6 of 43
  7. 7. Section 3 FINANCIAL HIGHLIGHTS This section presents the (1) audited financial results for the first quarter ended June 30, 2008, and (2) audited financial results for the first quarter ended June 30, 2009 as per United States Generally Accepted Accounting Principles (USGAAP). Detailed financial statements, analysis and other related information is attached to this report as Annexure (page 26). Also, kindly refer to Section 7 (use of Non - GAAP financial information on page 19) and Glossary (page 38) for detailed definitions. 3.1 Consolidated - Summary of Consolidated Financial Statements 3.1.1 Consolidated Summarized Statement of Operations (net of inter segment eliminations) Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 99,416 84,833 17% EBITDA 41,518 35,221 18% Cash profit from operations before 41,624 35,068 19% Derivative and Exchange Fluctuation Cash profit from operations after Derivative 44,123 33,389 32% and Exchange Fluctuation Income before Income taxes 30,088 23,814 26% Current tax expense 6,821 3,053 123% Income after current tax expense 23,267 20,761 12% Deferred tax expense / (Income) (2,379) 229 Net income 25,167 20,250 24% EBITDA / Total revenues 41.8% 41.5% 3.1.2 Consolidated Summarized Balance Sheet Amount in Rs. Million As at Particulars June 30, 2009 ASSETS Total current assets 141,986 Total non current assets 474,098 Total assets 616,084 LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities 210,817 Total non current liabilities 64,208 Total liabilities 275,025 Non Controlling Interest 11,183 Total stockholders' equity 329,876 Total liabilities and stockholders' equity 616,084 Page 7 of 43
  8. 8. 3.2 Segment - wise Summarized Statement of Operations 3.2.1 Mobile Services - comprises of consolidated statement of operations of Mobile Services. Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 82,285 69,150 19% EBITDA 27,183 21,218 28% EBIT 19,262 15,720 23% EBITDA / Total revenues 33.0% 30.7% 3.2.2 Telemedia Services – comprises of consolidated statement of operations of Telemedia Services. Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 8,550 7,988 7% EBITDA 3,463 3,367 3% EBIT 1,787 1,981 -10% EBITDA / Total revenues 40.5% 42.2% 3.2.3 Enterprise Services – comprises the Carriers and Corporates segments which have been combined based on audited results. Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 21,333 19,572 9% EBITDA 10,468 8,655 21% EBIT 8,740 7,383 18% EBITDA / Total revenues 49.1% 44.2% 3.2.4 Others – comprises of Digital TV operations, Bharti corporate offices and new projects Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 1,027 826 24% EBITDA (2,136) (1,244) -72% Depreciation and Others 643 (300) 314% EBIT (2,779) (944) -194% Page 8 of 43
  9. 9. 3.2.5 Passive Infrastructure Services – represents Bharti Infratel Ltd, and comprises of passive infrastructure being provided to telecom operators Amount in Rs. Million, except ratios Quarter Ended Particulars Y-on-Y June 2009 June 2008 Growth Total revenues 8,020 10,563 -24% EBITDA 3,557 3,870 -8% EBIT 325 1,689 -81% Share of profits/(loss) in associates/ joint 247 (115) 314% ventures EBITDA / Total revenues 44.4% 36.6% 3.3 Segment-wise Investments and Contribution 3.3.1 Investments in projects Amount in Rs. Million, except ratios As at June 30, 2009 Segment Rs. Million % of Total Mobile Services 307,806 49% Telemedia Services 72,962 12% Enterprise Services 88,253 14% Passive Infrastructure Services 145,767 23% Others 15,536 2% Total 630,324 100% Less:- Accumulated Depreciation and Amortization 167,401 Net Fixed Assets and Other Project Investment 462,923 Note: Enterprise Service comprises of combined audited results of Carrier and Corporate segments. 1 3.3.2 Segment-wise contribution to Revenue, EBITDA and Capital expenditure incurred during the period Quarter Ended June 2009 Segment Revenue EBITDA Capex Rs. Million % of total Rs. Million % of total Rs. Million % of total Mobile Services 82,285 83% 27,183 65% 9,257 34% Telemedia Services 8,550 9% 3,463 8% 4,095 15% Enterprise Services 21,333 21% 10,468 25% 1,804 7% Passive Infrastructure Services 8,020 8% 3,557 9% 3,780 14% Others 1,027 1% (2,136) -5% 8,155 30% Sub Total 121,215 122% 42,535 102% 27,091 100% Eliminations (21,799) -22% (1,017) -2% Total 99,416 100% 41,518 100% 27,091 100% Note1: Revenue and EBITDA eliminations are on account of inter-segment transactions. Capex is net of eliminations Note: Enterprise Service comprises of combined audited results of Carrier and Corporate segments. Page 9 of 43
  10. 10. SECTION 4 OPERATING HIGHLIGHTS The financial figures used for computing ARPU, Non Voice revenue, SMS revenue, Gross revenue per employee per month are based on United States Generally Accepted Accounting Principles (US GAAP). 4.1 Bharti Airtel Consolidated June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Customers on our Network Mobile Services 000's. 102,368 93,923 9% 69,384 48% Telemedia Services 000's. 2,828 2,726 4% 2,394 18% Total 000's. 105,196 96,649 9% 71,777 47% Non Voice Revenue as a % of Total Revenues % 14.8% 14.1% 14.8% Total Employees No. 23,789 24,538 -3% 26,144 -9% 4.2 Mobile Services June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth 2 Subscriber Base All India Mobile Subscribers 000's. 426,948 391,761 9% 286,868 49% Mobile Customers on Bharti's Network 000's. 102,368 93,923 9% 69,384 48% Net Additions All India Mobile Subscribers 000's. 35,187 44,867 -22% 25,789 36% Mobile Customers on Bharti's Network 000's. 8,445 8,273 2% 7,399 14% Market Share Bharti's Mobile Market Share % 24.0% 24.0% 24.2% Bharti's Market Share of Net Additions % 24.0% 18.4% 28.7% Pre-Paid Subscribers Total Customer Base % 94.7% 94.2% 92.3% Total Net Additions % 101.1% 100.8% 97.9% Other Operating Information Average Revenue Per User (ARPU) Rs. 278 305 -9% 350 -20% Average Revenue Per User (ARPU) US$ 5.8 6.4 -9% 7.3 -20% Average Minutes of Use Per User Minutes 478 485 -2% 534 -11% Monthly Churn Post-paid Voluntary Churn % 1.2% 1.2% 1.0% Post-paid Company Initiated Churn % 1.3% 1.4% 1.4% Pre-paid % 3.5% 3.2% 3.8% Non Voice Revenue SMS Revenue as a % of Mobile Revenues % 4.3% 3.7% 4.2% Non Voice Revenue as a % of Mobile Revenues % 9.3% 9.3% 9.7% Note 2: All India mobile subscribers for the month of April 2009 and May 2009 are as per report published by TRAI. Due to the non publication of TRAI report for June 2009 as on date, all India mobile subscriber net additions for June 2009 are as reported by COAI and AUSPI. Page 10 of 43
  11. 11. 4.3 Telemedia Services June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Telemedia Customers 000 2,828 2,726 4% 2,394 18% Net additions 000 102 107 -5% 110 -8% Average Revenue Per User (ARPU) Rs 1,027 1,071 -4% 1,138 -10% Average Revenue Per User (ARPU) US$ 21.5 22.4 -4% 23.8 -10% 4.4 Traffic Details June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Mobile Services Mn Min 140,713 130,669 8% 105,217 34% Telemedia Services Mn Min 4,746 4,737 0.2% 4,842 -2% National Long Distance Services Mn Min 11,781 11,690 1% 10,322 14% International Long Distance Services Mn Min 2,869 2,772 4% 2,048 40% 3 Total Minutes on Network Mn Min 160,109 149,867 7% 122,428 31% Note 3: The minutes are gross of Intersegment Elimination 4.5 Network and Coverage June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Mobile Services Census Towns No. 5,067 5,060 7 5,048 19 Non-Census Towns and Villages No. 423,149 414,906 8,243 364,287 58,862 Population Coverage % 82% 81% 74% Network Sites No. 96,149 93,368 2,781 75,876 20,273 Telemedia Services Cities covered No. 95 95 - 94 1 Enterprise Services (National Long Distance) Optic Fibre Network Rkms 104,540 101,337 3,203 78,540 26,000 4.6 Passive Infrastructure Services 4.6.1 Bharti Infratel June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Total Towers4 No. 28,078 27,548 2% 58,013 -52% Key Indicators Sharing Revenue per Sharing Operator per month Rs. 36,420 33,586 8% 31,893 14% Sharing Factor Times 1.43 1.34 - 1.22 - Note 4: Total towers as on June 30, 2009 and March 31, 2009 are excluding 35,066 towers in 12 circles for which the right of use has been assigned to Indus with effect from 1st Jan 2009 4.6.2 Indus Towers June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Total Towers5 No. 97,925 95,154 3% - - Key Indicators Sharing Factor Times 1.55 1.48 - - - Note 5: Bharti Infratel holds 42% in Indus towers Page 11 of 43
  12. 12. 4.7 Human Resource Analysis June 30, March 31, Q-on-Q June 30, Y-on-Y Parameters Unit 2009 2009 Growth 2008 Growth Consolidated Total Employees No. 23,789 24,538 -3% 26,144 -9% Number of Customers per employee No. 4,422 3,939 12% 2,745 61% Mobile Services Number of Customers per employee No. 13,388 11,992 12% 8,130 65% Gross Revenue per employee per month Rs. 3,587,279 3,495,127 3% 2,700,981 33% Telemedia Services Number of Customers per employee No. 297 272 9% 208 43% Gross Revenue per employee per month Rs. 299,559 285,538 5% 231,757 29% Enterprise Services Gross Revenue per employee per month Rs 2,113,853 1,945,185 9% 1,715,302 23% Page 12 of 43
  13. 13. SECTION 5 MANAGEMENT DISCUSSION AND ANALYSIS 5.1 Key Industry and Company Developments 5.1.1 Industry Withdrawal of DoT’s order on “Reduction in contribution to • Every request for porting of mobile subscriber number Universal Service Obligation Fund (USOF)” shall be accompanied by payment of applicable porting charge. Presently, UASL / CMTS / Basic operators are paying licence • Subscriber can withdraw his porting request not later fee @ 10%, 8% and 6% for Metro & “A” Category Service Areas, than at least one day prior to the tentative date of “B” Category Service Areas and “C” category service areas porting, but in such case no refund would be given on respectively out of which 5% is a USOF levy. porting charge. • Recipient Operator (RO), within five days of receipt of Vide its order dated October 1, 2008, DoT had stated that from the porting request, would carry out subscriber st 1 April 2009 onwards, if any UASL / CMTS / Basic operator’s verification. coverage is more than 95% of the total number of Development • Mobile Number Portability Service Provider (MNPO) to Blocks, the applicable USOF levy / licence fee would be as verify whether the mobile subscriber number sought to under:- be ported has been ported earlier and if so a period of ninety days from the date of activation of such mobile Percentage Applicable Annual subscriber number after its last porting has expired. Coverage of Licence fee inclusive of • If the 90 days is not expired RO shall communicate the total number USOF levy (as % of same to the concerned subscriber and also refund Applicable AGR) in respect of the porting charges paid by the subscriber. of USOF levy eligible licensee Development • Upon receipt of the details of porting request the (as % of Blocks in a Category of Service concerned DO shall, within two working days, verify such AGR) service area Area (except in 'Metro' details and communicate to the MNPO. covered by service areas) • MNPO on receipt of the communication from DO within the licensee ‘A’ ‘B’ ‘C’ two working days fix the tentative date and time of 5% (no porting of such mobile subscriber number and Up to 95% 10 8 6 communicate the same simultaneously to the DO and change) RO. More than 95% 3% 8 6 4 • Recipient Operator shall forthwith communicate the same to the subscriber telephonically and also inform the subscriber about the expected No Service Period during However, subsequently, on May 15, 2009, DoT rescinded the st the completion of the porting process. above order w.e.f 1 April 2009. Apart from the above, the draft regulations also indicates the Withdrawal of benefit of “Exemption of Licence Fee for rights, obligations & duties of service providers, Donor Fixed Wireline Services in rural areas” Operator (where the subscriber exists before porting), th recipient operator (where the subscriber moves after porting) Vide its earlier order dated 29 August 2008; the licence fee for and MNPO (who facilitates the mobile number portability fixed wireline services in rural areas had been exempted for all through its clearing house and Number portability Database st telecom operators w.e.f 1 October 2008. Centre) However, vide its order dated May 15, 2009, the said order / After obtaining the views of all stakeholders, TRAI will issue a benefit has been held in abeyance till further order. final regulation. TRAI is also expected to issue a consultation paper on per port transaction charges and dipping charges Draft Regulations on Mobile Number Portability (MNP) shortly. On June 30, 2009, TRAI issued the draft regulations wherein it 5.1.2 Company laid down the business process for implementing MNP. Major highlights of the draft regulations are as under:- Key developments • Mobile subscriber shall be eligible to make a request for • Bharti Airtel crossed 100 million customers mark, porting only after expiry of a period of ninety days from the which makes it the 3rd largest single country mobile date of activation of his mobile connection or from the date services operator and sixth largest in-country integrated of activation of his mobile subscriber number after the last telecom operator in the world. such porting. • An undertaking would be given by the subscriber making • Bharti Airtel formed a Joint Venture with Alcatel the porting request that he has already paid all billed dues Lucent to manage Bharti Airtel’s pan-India Broadband to the Donor Operator (DO) as on the date of the request and Telephone services and help Airtel’s transition to for porting and that he shall continue to pay all future dues Next Generation Networks, offering advanced services to the Donor Operator. like High-speed internet, Triple Play, Media-rich VAS, MPLS, VPN for both retail and business customers. Page 13 of 43
  14. 14. • Bharti Airtel marked its entry in the cloud computing space distinguished by their contributions to business, arts, with the launch of Airtel Net PC - a low-cost online government or public life in general. computer for its broadband customers. Powered by Microsoft and Nivio, the product is initially available in New Delhi, Gurgaon and Noida. • Bharti Airtel launched a new application MATE (Mobile Application Tool for Enterprise) that enables mobile devices to become an integral part of enterprise network, by allowing seamless, secure and On-demand access to Enterprise business data from anywhere, anytime. The platform promises to be a great proposition for various industries that depend on their field force like retail, media, FMCG etc. • Bharti Airtel entered into a five-year partnership with Manchester United Football Club. The partnership is first of its kind for both Manchester United and Airtel, where Airtel customers will have access to rich and exclusive Manchester United content on their mobiles and some lucky customers will get an opportunity to train at one of the Manchester United Soccer Schools. • Sunil Bharti Mittal, Chairman & Group CEO, Bharti Enterprises, was awarded the Global Economy Prize by The Kiel Institute (Germany). The Global Economy Prize is awarded annually to an economist, a politician, and a businessperson who have made outstanding contribution to establishing a just and protective society based on individual initiative and responsibility.   • Bharti Airtel in partnership with handset maker HTC Corporation launched India’s first Android based mobile phone. The Android ™ platform opens up a unique opportunity to Airtel customers to customize their device with multiple mobile applications. Airtel customers can avail many utility based applications such as Portfolio Manager, Hello Tune Manager, Weather Channel, Mobshare, In- mobile search and City Search • Bharti Airtel was declared as the ‘Service Provider of the Year’ and ‘Wireless Service Provider of the Year’ by Frost & Sullivan Asia Pacific ICT Awards for its outstanding performance in the South Asian region.   • Airtel digital TV launched mChek application for its customers- a new and a hassle free payment mode for Airtel digital TV customers who are Airtel mobile customers. Similar to the mChek payment facility which is available for utility payment, DTH customers would be able to recharge their DTH account through mChek.   • Airtel digital TV partnered with Pizza Hut to enable customers order pizza from their TV – a first for a DTH service operator in the country. • On the occasion of the ICC Twenty20 World Cup, Airtel digital TV partnered with ESPN to launch iSports interactive service. This sports-based interactive service showed not only the Live Matches but also simultaneous access to match highlights, on-demand info on player and team stats, tour calendar, results of past games and facts on cricket etc. • Sunil Bharti Mittal, Chairman & Group CEO, Bharti Enterprises, was awarded the degree of Doctor of Laws honoris causa by the University of Leeds, UK. The University of Leeds awards honorary degrees to people Page 14 of 43
  15. 15. 5.2 Results of Operations The company has reported its (1) audited financial results for the quarter ended June 30, 2008; (2) audited financial results for the quarter ended June 30, 2009. The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP). Key Highlights - For the quarter ended June 30, 2009 • Overall Customer base at 105.2 million. • Highest ever-net addition of 8.5 million customers in a single quarter. • Market leader with a market share of all India wireless subscribers at 24% • Total Revenues of Rs. 99.4 billion (up 17% Y-o-Y). • EBITDA of Rs. 41.5 billion (up 18% Y-o-Y). • Cash profit from operations of Rs. 44.1 billion (up 32% Y-o-Y). • Net Profit of Rs. 25.2 billion (up 24% Y-o-Y). Bharti Airtel Consolidated Customer Base depreciation and amortization expenses of Rs. As on June 30, 2009, the company had an aggregate of 14,330 million. 105,195,762 customers, consisting of 102,367,881 GSM mobile and 2,827,881 Telemedia customers. Its total customer base as Income Before Income Taxes (PBT) on June 30, 2009 increased by 47% compared to the customer The income before income tax for the quarter was Rs. 30,088 base as on June 30, 2008. million, an increase of 26%, as compared to the quarter ended June 30, 2008. The current tax for the quarter ended June 30, Revenues/Turnover 2009 was Rs. 6,821 million and deferred tax expense / During the quarter ended June 30, 2009, the company had (income) of Rs. (2,379) million. revenues of Rs 99,416 million; a growth of 17% compared to the quarter ended June 30, 2008. Revenues from mobile services Net income represented 83% of the total revenues for the quarter ended The net income for the quarter ended June 30, 2009 was Rs June 30, 2009. Non-voice revenue contributed to approximately 25,167 million. 14.8% of the total revenues for the quarter. Balance Sheet Operating Expenses (ex-revenue share license and As on June 30, 2009, the company had total assets of Rs. spectrum fee) During the quarter ended June 30, 2009; the 616,084 million and total liabilities of Rs. 275,025 million company incurred an operating expenditure of Rs. 36,401 million respectively. The difference of Rs. 341,059 million was on representing 37% of the total revenues. The operating expense account of stockholder’s equity and non-controlling interest. comprises: The company had a net debt of Rs. 47,790 million (US$ 998 Rs. 18,165 million towards network operations costs million) as on June 30, 2009, resulting in a net debt to (~18.3% of turnover) EBITDA (LTM) of 0.30 times. However, Net Debt to EBITDA Rs. 4,662 million towards employee costs, (~4.7% of (LTM) for the period amounts to 0.10 times exclusive of fully turnover) and compulsory convertible, non-cumulative, unsecured and Rs. 93 million towards equipments costs, and interest free Debentures. Rs. 13,481 million towards selling general and administrative costs (~13.6% of turnover) Capital Expenditure During the quarter ended June 30, 2009, the company The operating expenses grew by 27% compared to the quarter incurred capital expenditure of Rs. 27,091 million (US$ 566 ended June 30, 2008. The increase in the operating expenses is million). associated to the costs pertaining to the expansion of operations. Human Resources As on June 30, 2009, the company had a total of 23,789 EBITDA, Finance Cost and Cash Profit from Operations employees consisting of 7,646 in Mobile services, 9,514 in During the quarter ended June 30, 2009, the company had an Telemedia services, 3,364 in Enterprise services, 2,539 in EBITDA of Rs. 41,518 million; a growth of 18% compared to the Others and 726 in Passive Infrastructure services. quarter ended June 30, 2008. The EBITDA margin for the quarter was 41.8%. Mobile Services The net finance income for the quarter ended June 30, 2009 Customer Base, Churn, ARPU and MoU was Rs. 2,605 million. The interest on borrowings during the As at the end of the quarter the company had 102,367,881 quarter was Rs. 841 million and the finance income (primarily GSM mobile customers on its network, which accounted for a related to income on marketable securities) was Rs. 1,205 market share of 24% of the all India mobile market. million. The balance amount was other finance costs, effect of exchange fluctuation and derivative accounting. Of its 102,367,881 GSM mobile customers as of June 30, 2009, post-paid customers contributed 5.3% to the overall The cash profit from operations after derivative and exchange customer base while pre-paid customers contributed the fluctuations for the quarter was Rs. 44,123 million, an increase balance 94.7%. During the quarter, Bharti’s share of of 32%, as compared to the quarter ended June 30, 2008. 8,444,633 net additions was 24% of all India wireless During the quarter ended June 30, 2009, the company had subscriber net additions. Page 15 of 43
  16. 16. The average monthly churn for the quarter ended June 30, 2009 respectively. The EBITDA margin for this segment was 40.5% was 2.4% (1.2% voluntary churn and 1.3% company initiated for the quarter ended June 30, 2009. The EBIT for the quarter churn) for its post-paid segment, and 3.5% for the pre-paid ended June 30, 2009 was Rs 1,787 million. segment. Capital Expenditure During the quarter, blended ARPU was Rs. 278 (US$ 5.8 ) per During the quarter ended June 30, 2009, the company month as compared to Rs 305 (US$ 6.4 ) per month in the incurred a capital expenditure of Rs. 4,095 million (US$ 86 quarter ended March 31, 2009. The blended monthly usage per million) on its Telemedia services. customer, during the quarter, was at 478 minutes. Non voice revenue, which includes Short Messaging Service (SMS), voice Enterprise Services mail service, call management and other value added services like Hello Tunes, Music on Demand and Airtel Live contributed to approximately 9.3% of the total revenues of the segment. The Revenues, EBITDA and EBIT Short Messaging Services (SMS) revenue, which is primarily The revenues for the quarter ended June 30, 2009 for text messaging, accounted for 4.3% of the total revenue of the Enterprise services stood at Rs 21,333 million, an increase of segment, for the quarter ended June 30, 2009. 9% over the corresponding quarter last year. The revenue from this segment contributed to 21% of the total consolidated revenues. The EBITDA during the quarter ended June 30, Revenues, EBITDA and EBIT 2009 was Rs 10,468 million, an increase of 21% over the The revenues for the quarter ended June 30, 2009 for mobile corresponding quarter last year. The EBITDA margin for the services stood at Rs 82,285 million, an increase of 19% over the quarter ended June 30, 2009 was 49.1%. The EBIT for the corresponding quarter last year. The revenue from this segment quarter ended June 30, 2009 was Rs 8,740 million as contributed to 83% of the total consolidated revenues. The compared to Rs 7,383 million for the quarter ended June 30, EBITDA during the quarter ended June 30, 2009 was Rs. 27,183 2008, an improvement of 18%. million representing growth of 28% over the quarter ended June 30, 2008. The EBITDA margin for the quarter ended June 30, Capital Expenditure 2009 was 33%. The EBIT for the quarter ended June 30, 2009 During the quarter ended June 30, 2009, the company was Rs 19,262 million as compared to Rs 15,720 million for the incurred a capital expenditure of Rs. 1,804 million (US $38 quarter ended June 30, 2008, an improvement of 23%. million) on its Enterprise Services. Capital Expenditure During the quarter ended June 30, 2009, the company incurred Passive Infrastructure Services a capital expenditure of Rs 9,257 million (US$ 193 million) on its mobile services. Towers and Sharing Operators As at the end of the quarter, the company had 28,078 towers. Telemedia Services Sharing factor for the quarter ended June 30, 2009 was 1.43 times. Customer Base and ARPU At the end of the quarter ended June 30, 2009, the company Revenues, EBITDA and EBIT had its Telemedia operations in 95 cities. During the quarter, the For the quarter ended June 30, 2009, the revenues from its company added 101,642 customers on its Telemedia networks passive infrastructure services were Rs. 8,020 million. The with 2,827,881 customers as on June 30, 2009. The company EBITDA for the quarter ended June 30, 2009 was Rs 3,557 had approximately 11.38 lakh customers (~40.3% of the total million. The EBITDA margin for the quarter ended June 30, customer base) subscribing to broadband (DSL) services. 2009 was 44%. The EBIT for the quarter ended June 30, 2009 was Rs. 325 million. The ARPU for the quarter was Rs. 1,027 (US$ 21.5 ) per month. Capital Expenditure Revenues, EBITDA and EBIT During the quarter ended June 30, 2009, the company For the quarter ended June 30, 2009, the revenues from its incurred a capital expenditure of Rs. 3,780 million (US $79 Telemedia operations of Rs 8,550 million, represented a growth million) on its passive infrastructure services. of 7% over the corresponding quarter last year. The EBITDA for the quarter was Rs. 3,463 million compared to Rs. 3,367 million in the corresponding prior year quarter, an increase of 3% Page 16 of 43
  17. 17. SECTION 6 STOCK MARKET HIGHLIGHTS 6.1 General Information Shareholding and Financial Data Code/Exchange 532454/BSE Bloomberg/Reuters BHARTI IN/BRTI.BO No. of Shares Outstanding (30/06/09) Million Nos. 1,898.37 Closing Market Price - BSE (30/06/09) Rs./Share 802.10 Combined Volume (NSE & BSE) (01/04/09-30/06/09) No. in Mn/day 5.98 Combined Value (NSE & BSE) (01/04/09-30/06/09) Rs. bn./day 4.65 Market Capitalization Rs. bn 1,523 Market Capitalization US$ bn 31.81 Book Value Per Equity Share Rs./share 173.77 Market Price/Book Value Times 4.62 6 Net Debt to EBITDA (LTM) Times 0.30 Enterprise Value Rs. bn 1,570 Enterprise Value US$ bn 32.81 Enterprise Value/ Annualised Q1 Revenue Times 3.95 Enterprise Value/ Annualised Q1 EBITDA Times 9.46 Note 6: Net Debt to EBITDA (LTM) for the period amounts to 0.10 times exclusive of fully and compulsory convertible, non-cumulative, unsecured and interest free Debentures. 6.2 Summarized Shareholding pattern as of June 30, 2009 Category Number of Shares % Promoter & Promoter Group Indian 859,986,028 45.30% Foreign 419,653,373 22.11% Sub total 1,279,639,401 67.41% Public Shareholding Institutions 521,563,483 27.47% Non-institutions 97,170,396 5.12% Sub total 618,733,879 32.59% Total 1,898,373,280 100.00% Page 17 of 43
  18. 18. 6.3 Bharti Airtel Daily Stock price (BSE) and Volume (Combined of BSE & NSE) Movement 1,000 24,000 20,000 price per share (Rs.) volum (in 000's) 800 16,000 e 600 12,000 ` 8,000 400 4,000 200 0 1/04/09 8/04/09 15/04/09 22/04/09 29/04/09 6/05/09 13/05/09 20/05/09 27/05/09 3/06/09 10/06/09 17/06/09 24/06/09 Volume (in 000's) Share Price (Rs.) Source: Bloomberg 6.4 Comparison of Domestic Telecom stock movement with Sensex and Nifty 200 Bharti 30.4% Sensex 46.4% NSE 40.2% 150 RCOM 60.9% MTNL 39.7% 100 TATA Comm -8.7% Idea 43.9% Spice 15.3% 50 1/04/09 8/04/09 15/04/09 22/04/09 29/04/09 6/05/09 13/05/09 20/05/09 27/05/09 3/06/09 10/06/09 17/06/09 24/06/09 Bharti Sensex NSE RCOM MTNL TATA Comm IDEA Spice Source: Bloomberg Page 18 of 43
  19. 19. SECTION 7 Use of Non-GAAP Financial Information In presenting and discussing the Company’s reported financial position, operating results and cash flows, certain information is derived from amounts calculated in accordance with US GAAP, but this information is not in itself an expressly permitted GAAP measure. Such non - GAAP measures should not be viewed in isolation as alternatives to the equivalent GAAP measures. A summary of non - GAAP measures included in this report, together with details where additional information and reconciliation to the nearest equivalent GAAP measure can be found, is shown below. Equivalent GAAP measure Location in this results announcement of Non - GAAP measure for USGAAP reconciliation and further information Consolidated : - Page 20, Mobile Services : - Page 21, Telemedia Services : - Page 22, Enterprise Earnings before Interest, Taxation, Operating Income Services: - Page 22, Others: - Page 22, Passive Depreciation and Amortization (EBITDA) Infrastructure Services : - Page 23. Consolidated : - Page 20, Mobile Services : - Page Earnings before Interest and Taxation 21, Telemedia Services : - Page 22, Enterprise Operating Income (EBIT) Services: - Page 22, Others: - Page 22, Passive Infrastructure Services : - Page 23. Cash Profit from Operations after Operating Income Page 20 Derivative and Exchange Fluctuations Income after current tax expenses Income before taxation Page 20 Net Revenues Total revenues Page 20 Total Non Current Assets N.A Page 21 Total Non Current Liabilities N.A Page 21 Earnings before Interest and Taxes N.A. Page 20 Total Revenues N.A. Page 20 Schedule of Cost of services N.A Page 24 Schedule of Operating expenses N.A Page 24 Schedule of Depreciation and Amortization N.A Page 24 Schedule of Net debt N.A Page 24 Schedule of Finance cost (net) N.A Page 25 Schedule of Income tax N.A Page 25 Page 19 of 43
  20. 20. 7.1 Reconciliation of Non-GAAP financial information based on USGAAP 7.1.1 Consolidated Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income 27,188 Depreciation and Amortization 14,330 EBITDA 41,518 Operating Income to Cash Profit from Operations Operating Income 27,188 Depreciation and Amortization 14,330 Interest income 8,056 Interest expense (5,451) Cash Profit from Operations 44,123 Operating Income to EBIT Operating Income 27,188 Less: Non operating expenses 131 Add: Share of profits/(Loss) in associates/ joint ventures 240 Other income 186 EBIT 27,483 Total Revenue to Net Revenue Total Revenue 99,416 Less: Access charges 11,371 Net Revenue 88,045 Income before Income taxes to Income after current tax expense Income before Income taxes 30,088 Less: Current tax expense 6,821 Income after current tax expense 23,267 Page 20 of 43
  21. 21. 7.1.1 Consolidated (cont.) Amount in Rs million Particulars Quarter Ended June 2009 Total Non Current Assets Property and equipment, net 422,747 Acquired intangible assets, net 13,001 Goodwill 27,054 Investment in associates and joint ventures 121 Restricted cash, non-current 14 Other assets 11,161 Total Non Current Assets 474,098 Particulars Quarter Ended June 2009 Total Non Current Liabilities Long-term debt, net of current portion 48,886 Deferred taxes on income 4,615 Unearned income- Indefeasible right to use sales 3,251 Other liabilities 7,456 Total Non Current Liabilities 64,208 7.1.2 Mobile Services Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income 19,143 Depreciation and Amortization 8,040 EBITDA 27,183 Operating Income to EBIT Operating Income 19,143 Add: Share of profits/(loss) in associates/ joint ventures (7) Other income 126 EBIT 19,262 Page 21 of 43
  22. 22. 7.1.3 Telemedia Services Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income 1,775 Depreciation and Amortization 1,688 EBITDA 3,463 Operating Income to EBIT Operating Income 1,775 Add: Other income 12 EBIT 1,787 7.1.4 Enterprise Services Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income 8,640 Depreciation and Amortization 1,828 EBITDA 10,468 Operating Income to EBIT Operating Income 8,640 Add: Other income 100 EBIT 8,740 7.1.5 Others Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income (2,653) Depreciation and Amortization 517 EBITDA (2,136) Operating Income To EBIT Operating Income (2,653) Less: Non operating expenses 131 Add: Share of profits/(loss) in associates/ joint ventures 1 Other Income 4 EBIT (2,779) Page 22 of 43
  23. 23. 7.1.6 Passive Infrastructure Services Amount in Rs million Quarter Ended Particulars June 2009 Operating Income To EBITDA Operating Income 325 Depreciation and Amortization 3,232 EBITDA 3,557 Operating Income To EBIT Operating Income 325 EBIT 325 Page 23 of 43
  24. 24. 7.2 Schedules to Financial Statements 7.2.1 Schedule of Cost of services Amount in Rs million Quarter Ended Particulars June 2009 Access charges 11,371 Licence fees, revenue share and spectrum charges 10,126 Network operations costs 18,165 Employee costs 4,662 Depreciation and Amortization (excluding intangibles) 13,935 Cost of Services 58,259 7.2.2 Schedule of Operating expenses Amount in Rs million Quarter Ended Particulars June 2009 Network operations costs 18,165 Equipment costs 93 Employee costs 4,662 Selling, general and administrative costs 13,481 Operating Expenses 36,401 7.2.3 Schedule of Depreciation and Amortization Amount in Rs million Quarter Ended Particulars June 2009 Fixed Assets 13,692 Licence Fees 168 ESOP 310 Intangibles 160 Depreciation and Amortization 14,330 7.2.4 Schedule of Net debt Amount in Rs million Quarter Ended Particulars June 2009 Long term debt, net of current portion 48,886 Short-term borrowings and current portion of long-term debt 62,076 Less: Cash and cash equivalents 4,623 Restricted cash 83 Restricted cash, non-current 14 Short term investments 58,452 7 Net Debt 47,790 Note 7: Net Debt for the period amounts to Rs 15,755 million exclusive of fully and compulsory convertible, non-cumulative, unsecured and interest free Debentures. Page 24 of 43
  25. 25. 7.2.5 Schedule of Finance cost (net) Amount in Rs million Quarter Ended Particulars June 2009 Interest on borrowings 841 Finance charges 259 Finance income (1,205) Derivatives and exchange fluctuation (2,500) Finance cost (net) (2,605) 7.2.6 Schedule of Income tax Amount in Rs million Quarter Ended Particulars June 2009 Current tax expense 6,821 Deferred tax expense / (income) (2,379) Income tax expense 4,442 Page 25 of 43

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