Reliance Communications Limited FY15 Annual General Meeting

Reliance Communications Limited
FY15 Annual General Meeting
September 30, 2015
Private and Confidential
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.
2
A great mind’s dream.
‘A phone in every
Indian’s hand.’
A vision to empower
SHRI DHIRUBHAI H. AMBANI
Our Legendary Founder
December 28, 1932 - Forever
3
Table of Contents
1
Company overview
2
Data is the future
3
RCOM ready to capture Data boom
4
Conclusion
4
Company overview
Reliance Communications : An Overview
 Integrated telecom operator
with Revenues of Rs. 22,098
Crore
 Global data business
with sub-sea cable
network of ~69,000 km
 Nationwide network with
~43,000 towers and 190,000
Km optical fibre cable
 Only pan-India GSM &
CDMA operator and 3G
services across 18 circles*
 110m wireless subs
including 35m data subs
of which ~18m are 3G
Leading Player in the Indian Telecom Sector
Note: * including ICR arrangements
6
Financial Performance - FY 2015
REVENUES
22,098 Cr
EBITDA
7,518 Cr
EBITDA MARGIN
34%
ASSETS
91,284 Cr
NET WORTH
37,936 Cr
All figures are in Rs.
Strong Financial Performance with robust margins
7
Key Performance Indicators
RPM (`)
Minutes of usage/ sub
0.44
0.44
330
0.43
0.40
Mar' 12
Mar' 13
290
296
Mar' 13
Mar' 14
227
Mar '14
Mar '15
Mar' 12
Mar '15
Quarterly EBITDA/ min (`)
Quarterly ARPU (`)
147
128
0.154
117
99
0.155
0.117
0.105
Mar' 12
Mar' 13
Mar' 14
Mar' 15
Mar 12
Mar' 13
Mar' 14
Mar' 15
Wireless Operations: Mar-12; India Operations: Mar-13, Mar-14 & Mar-15
EBITDA / min – Indian telecom operations RPM and Indian Operations margin
Operating Metrics have Seen a Sharp Turnaround
8
Strengthening of Balance Sheet
Improving the Balance Sheet by addition of Equity Capital and
by elongating liability profile
Equity Infusion
Rs. 6,100 Crore
Largest QIP by an Indian
Corporate
Credit Rating
Moody BA3 Stable
Fitch BB- Stable
First time rating by
International agencies
USD Bond issue by
RCOM
USD 300 Million
Maiden Issue
USD Bond issue by
GCX
USD 350 Million
Successful fund Raising
Solid investor confidence in RCOM’s long-term business strategy
9
Future proofing of Spectrum Portfolio
RCOM has Pan India Sub 1 GHz spectrum capability for LTE

Acquisition of substantial spectrum in
800/850 band in the recent auction to
future-proof LTE plans
Only operator with 5 MHz spectrum in 800/850 band on a pan-India basis
10
Data is the future
Internet connectivity in India
1 billion people still not connected to Internet in India
20%
…..but growing
faster than China
Only
of
population is Online
(source : www.internetlivestats.com)
+
Huge untapped potential !
12
Internet connectivity in India Contd…
What do Indians do Online …?
83%
EMAIL
77%
SOCIAL NETWORKING
65%
INSTANT MESSAGING
40%
SEARCH
APP STORE
25%
Source : LIQUID ASIA. All rights reserved with owners
13
Internet connectivity in India Contd…
Customers are adopting Smartphones at a furious pace….
44% increase in
Smartphone shipments
From ~60 lakh per month a
year ago , to ~90 lakh a month
now
Reducing prices of smartphones fuelling growth !
14
Internet connectivity in India Contd…
Online Video consumption in India is Exploding !
9 cr YouTube videos
being watched in a day !
95 min
avg time spend by a
YouTube user in a month
Creating demand for Smartphones, and for Speed !
15
Internet connectivity in India Contd…
Indians are connecting to online Social Networks in a big way !
Facebook
LinkedIn
125 Million Users
24 Million Users
2nd largest market
2nd largest market
WhatsApp
Twitter
70 Million Users
India = Fastest Growing
Largest market
User Market
Social Networking (peer connectivity) accelerating internet adoption !
16
Mobile E-Commerce – India leapfrogging

50% of India’s E-Commerce sales on Mobile
India
China
Brazil
France
UK
Australia
USA
Germany
Russia
Japan
0%
10%
20%
30%
40%
50%
60%
Mobile is preferred mode for E-Commerce in India
17
Data is the Next Frontier for Growth
Data Traffic to grow 8x over FY 14-18
GB mn
5,496
3,755
future data revenue growth
 Smartphone, Feature Phone and
2,496
USB Modem constitute 97% of
1,555
726
FY14
 Small & large screen to drive
data usage
FY15
FY16
FY17
FY18
Indian mobile data poised to become a USD 15 bn market
18
RCOM ready to capture Data boom
Consumer Business
Data Capability …Future proof (3G/4G Capable) Spectrum Portfolio
Circles (#)
Spectrum (MHz)
2G
(900/1800 MHz)
19
90
3G
2100 MHz
13
65
CDMA / 4G
800/850 MHz
22 (Pan India)
114
Pan India broad-band spectrum for 4G services
21
Data Capability … 850 MHz Band - A Powerful LTE Spectrum
Our Spectrum Holding in this band – Strategic Advantage in Data Leadership

850MHz band best for indoor coverage due to better penetration and
throughput of the signal
4G
3G
2G
1x / EVDO / Rev A / B
Supports RCOM’s Unique Incumbency Position in Data
22
Data Capability … High Quality Tower & Fiber Assets
Tower Assets

Young portfolio of 43,379 towers, located
in all 22 circles, capable of housing 4
tenants
OFC Assets

One of the largest network of backhaul
optical fiber ~190,000 Kms
Only integrated tower company having a pan-India tower portfolio & robust backhaul network
23
Data Capability … Dominant Footprint
GSM – 3G
CDMA – Rev B and Rev A
LTE Ready Spectrum Capability
Delhi
Delhi
Kolkata
Kolkata
Pune
Mumbai
Mumbai
Hyderabad
Bengaluru
Own
Chennai
ICR




Rev A/B
Rev A
3G coverage in 18 circles

7 metros on Rev B (14.7 Mbps)

436 towns with Rev B coverage
334 cities (13 own circles)

Pan-India 5 MHz or more LTE
ready 800/850 MHz spectrum
5 ICR circles
Dominate hand held devices

Dominate large screen
RCOM’s unique data spectrum holding provides advantages over incumbents
24
Data Capability … Extensive Distribution and Service Network
Mass
Distribution
 3,500 Distributors and 7 Lakh Retailers
Exclusive
 956 exclusive full service franchisee retail outlet
Retail Channel
DSA for Retail
and Corporate  Help us reach out to the Post-Paid customers, SMEs and Corporates
Customers
Digital
Channel
 Growing digital channel selling handsets & recharges
Multiple forms of distribution network
25
Data Capability … Exclusive Retail Outlets
Launched 956 new full service
franchised outlets
 Sales outlets for wide array
of handsets and data devices
Key Differentiation
 Enhanced customer
experience
 Trained and Certified staff
Controlled channel sales- Key driver for growth
26
Innovation led Growth…. Unique Social Networking plans
Our Data Plans come with Unlimited Free Social
Networking pre-bundled !
30% of our customers use Data …..and 50% of them use 3G ….leading the Industry !
27
Innovation led Growth….Internet for All
 Free Basic Services under internet.org /
www.freebasics.com are across a wide
range of basic internet services
Actual Services Screenshot
Many First time Internet users added in 6 months
28
Innovation led Growth…. Flexi Recharge
 Talk Time – Local
 Talk Time – STD
 2G Data Pack
 3G Data Pack
 Social Networking Pack
 SMS Pack
One Voucher ….…. Multiple options
29
Innovation led Growth…. Su Vaat Che!
Simple , but compelling propositions

Rs. 97 : Unlimited calling on Reliance
Network across India
 Rs. 197 : Unlimited calling + Unlimited
Data
Ek Recharge Ma Mahina Bhar No Jalso
New acquisition market share moves up significantly
30
Thanks…
31
Innovation led Growth…. WiFi Devices
Laptop + Dongle
WiFi Enabled Devices
Multifold Growth in Portable Internet Devices
32
Innovation led Growth…. Focus on Home Wallet Share
33
Innovation led Growth…. Carry your Network Anywhere
WiPod – The WiFi Product To Capture Data From Over 180 Mn Internet Devices
34
Innovation led Growth…. Focus on Competition Churn
35
Innovation led Growth…. Empowering the Customers
Customer App – InstaCare
 Simplest way to manage account instantly
 Make payment & recharge online
 View latest offers & buy packs
 Track usage
 Instant Chat support
Leveraging Digital Channels – Promoting Self-help
36
Innovation led Growth…. Leveraging Social & Digital Space
Apps & Web based utilities
 ChannelCare – 1st Telco in country to
have retailer App on Android
 Smart InstaCare – 1st Telco in Asia to
have a full feature Customer Service
Suite on Twitter
 MyServices - Fully integrated self
Service portal
Staying Relevant and Improving Youth Connect
37
Strong Brand Recognition
RCOM only Telco in Top 10 Most
Reputed Indian Companies
RCOM ranked 14th among Urban
India’s Most Exciting Brands
38
Enterprise Business
RCOM Enterprise Business supporting everyday activities...
1 out of 3 time when you go to
withdraw cash from an ATM, you
are riding on a RCOM Network
1 in every 4 times you go to a
website, you travel over one of
the RCOM Cables
40
RCOM Enterprise Business supporting everyday activities Contd..
Over 75% of the time you go
to Twitter or Facebook you are
on our network
1 in every 3 calls people
receive from overseas ride on
a RCOM network
41
Our one-stop shop offering is unmatched in the industry
Enterprises are outsourcing entire telecom-network services to proven
service providers like RCOM
Performance
Management
Latency, throughput, spe
ed
Scalability
Support for Higher
Bandwidths
Service Support &
Customer Interface
Differentiated Helpdesk
Reliability
Higher Uptimes, Traffic
Protections
Service Bundle
Internet, Email, DNS,
Web Space, Virus
Protection etc
Managed Solutions
SP Managed CPEs/
Solutions
42
RCOM has One of the Largest Global Fiber Network
The Emerging Market corridor connects over 2.0bn Internet
subscribers currently and is expected to account for over 70%
of the world’s smart phone growth
Note: Data above based on countries including the US and those in the Middle East, Europe and Asia ex-China
Source: WCIS and EIU data
43
RCOM to play a major role in e-Commerce and e-Governance

Focus on increasing IP connection density

Cloud Service Providers

E-commerce players

Content Providers
IP Density is increasing at our Data Centers
44
RCOM Well-Positioned to Benefit From Convergence
Information, Co
mmunication, Te
chnology
Sweet Spot
Voice
Network
Data Network
& Products
45
Conclusion
RCOM’s Value Proposition
 Future ready spectrum
portfolio
 Future expansion at
least cost
RCOM’s
Value
Proposition
 Arrangement / co-operation
and reciprocity with Jio to
assist revenue & margin
growth
 Lower regulatory cash
outflow
 Focused plans for
Deleveraging and Asset
monetization
Immense Sectoral Growth in India – Consolidation & Data Opportunities
47
Vision of Our Chairman
“RCOM led India’s first telecom
revolution by making a phone
call more affordable than a
postcard.
It will now lead the second
wave by making India a 'wirefree' country where every
Indian has access to highspeed data at the click of a
mouse, the press of a key.”
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Thank you