TTML - Tata Teleservices

Tata
indicom
Tata Teleservices (Maharashtra) Limited
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
2
The Tata Group – A Snapshot
11
India’s
India’s Largest
Largest Business
Business Group
Group
22
India’s
India’s Most
Most Respected
Respected Multinational
Multinational Business
Business Conglomerate*
Conglomerate*
33
Only
Only Indian
Indian Entity
Entity in
in Forbes’s
Forbes’s list
list of
of World’s
World’s 20
20 Most
Most Reputed
Reputed Companies
Companies
44
Market
Market Capitalization**
Capitalization** of
of USD
USD 54
54 Bn,
Bn, Highest
Highest in
in India
India
55
FY
FY 06-07
06-07 Revenues
Revenues (est.)**
(est.)** of
of USD
USD 27.1
27.1 Bn,
Bn, Profits
Profits (est.)
(est.) of
of USD
USD 2.4
2.4 Bn
Bn
66
Largest
Largest Employer
Employer in
in the
the Private
Private Sector
Sector with
with 250,000
250,000 Employees**
Employees**
77
Over
Over 50%
50% of
of Group
Group Revenues
Revenues earned
earned from
from outside
outside India
India
* Awarded in 2006 by the United States-India Business Council (USIBC)
** The Corus acquisition would notionally add, for FY 06-07, USD 19 Bn (est.) to revenues, USD 12 Bn to market
capitalization, and 47,000 employees to the Group
3
Business Sectors
Tata Tea
Titan
Consumer
Products, 5%
Tata Power
Tata Chemicals
Voltas
Chemicals, 4%
Tata
Motors
Energy, 7%
Indian
Hotels
TCS
Services, 9%
Information Systems
& Communications,
20%
Engineering, 31%
Tata
Autocomp
Materials, 23%
REVENUE FY 2006
VSNL
TTL
Tata Steel
4
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
5
The Macroeconomic Environment
Inflation
GDP Growth Rate
10%
9%
8%
8%
8%
8%
7.0%
6.4%
6.0%
5.5%
5.3%
5.0%
6%
4.0%
4%
4%
4.4%
3.4%
3.0%
2.0%
2%
1.0%
0%
0.0%
FY2003
FY2004
FY2005
FY2006
FY2007
FY2003
30%
30%
31%
32%
FY2005
FY2006
FY2007
Forex Reserves(USD Bn)
Savings Rate as a % of GDP
35%
FY2004
32%
26%
250
199
200
25%
20%
150
15%
100
142
162
118
78
10%
50
5%
0%
0
FY2003
FY2004
FY2005
FY2006
FY2007
FY2003
FY2004
FY2005
FY2006
FY2007
By 2032, India will be amongst the three largest economies in the world
Sources: RBI, CSO, Goldman Sachs
6
Telecom – The Story Thus Far
160
Unified Access Service
Licences issued
Micro
Prepaid/
Long
“Calling Party Pays”
Validity Plans
Introduced
launched
CDMA
Limited
Mobility
Entry
Mn Subscribers
120
80
National Telecom Policy ‘99 :
Introduction of Revenue
Share
Entry of
3rd and 4th
GSM
Operators
40
0
FY97
FY98
FY99
Fixed
Source: TRAI, COAI, AUSPI
FY00
FY01
FY02
Mobile
FY03
FY04
FY05
FY06
FY07
Broadband
7
India outperforms China
Source: Study paper on ‘Indicators for Telecom Growth Subscribers value are as at the end of the year (December).
8
India Growth Potential
Key growth drivers
affordability (falling handset prices, lowest tariffs)
availability (network, distribution)
Source: Based on data in Global Wireless Matrix 3006- Merrill Lynch.
9
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
10
Presence Across the ICT Service Spectrum
Wireless
Fixed Line
TTL*
Broadband
DTH
Enterprise
Wholesale
IT
ITeS
VSNL
Tata Sky
TIEBU
VSNL
TCS
Serwizsol
Global No.1
wholesale voice
provider
16Mn wireless
subscribers, 0.5Mn
wireline subscribers
India’s fastest
growing DTH
operator
0.2Mn broadband
subscribers
World’s 12th largest software
services company; software
vendor to world’s leading telcos
and telecom equipment
manufacturers
Serves majority of the
Top 1000 enterprise
customers in India
3200 seat BPO;
supports English,
Hindi and 9 Indian
languages
*Includes Tata Teleservices (TTSL) & Tata Teleservices (Maharashtra) Ltd (TTML)
11
Competitive Landscape
Tata
Group
Wireless
Fixed Line
Broadband
DTH
Enterprise
Wholesale
IT
ITeS
TTL
TTL
VSNL
Tata Sky
TIEBU
VSNL
TCS
Serwizsol
Incumbent
Govt.
Operators
IndiaCentric
Bharti
IndiaCentric
Reliance
Hutch
Idea
Significant Presence
Limited Presence
No Presence
12
Wireless Services
The CDMA Advantage – Innovative Products & Services
Fixed Wireless Phones
Mobile Content / Applications
“Best Service in Emerging Markets” - Higher bandwidth = better services
World Communication Awards 2005
Wireless Internet
TTL is the first to launch ERP
access on PDA in India
Pay Telephony Booths
+ enhanced experience
TTL has over 1 Mn high
ARPU PTB
RoadWarrior – Mobile VPN
PARSEC
Strong uptake from segments
such as BFSI, Retail and Lottery
Payphone +PoS
13
Wireless Services
Handsets Portfolio
Low End / Mass Market
Mid End / Youth Market
High End
TTL offers over 40 handset models from Motorola, Nokia, Samsung, LG,
Huawei, ZTE, Haier, Pantech and Kyocera
TTL was the first mobile operator to launch handsets under its own brand
name in the Indian market
Most new handsets being launched are RUIM based and BREW enabled
TTL’s Instachange Card allows subscribers to change their handset while
retaining their number in 3 simple steps
TTL subscribers can seamlessly roam across GSM and CDMA networks in
178 countries using dual-mode phones (Worldphones) or One World One
Number T-SIM Card
14
Wireless Services
Distribution Channel
India’s largest branded telecom retail chain
Over 3,300 exclusive outlets, occupying 0.6 Mn Sq Ft of prime retail
space
Extensive handset distribution reach through presence at over 60,000
multi-brand retail outlets
Recharge vouchers distributed through more than 140,000 outlets
TTL recently entered the Limca Book of Records by launching 100 exclusive outlets on a
single day
15
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
16
Telecom Operator’s Business Lifecycle
Infrastructure intensive industry
leading to longer gestation period
TTML is in the 4th
year of wireless
operations
Falling
Tariffs
Phase 3
Maturity
Phase 2
Growth mode
Highly
Regulated
Industry
Phase 1
Setup
Rapid Technological changes
making certain assets obsolete
Oncewe
weget
getinto
intomatured
maturedmode,
mode,the
thebusiness
businessstarts
startsyielding
yieldingrecurring
recurringrevenue
revenue
Once
whichimpacts
impactspositively
positivelyon
onthe
thefinancials
financialsof
ofthe
thecompany
company
which
17
The Story So Far…
FY04
FY04
Launch
Launch
Commenced
CDMA
Wireless
operations in
Maharashtra
FY05
FY05
120
120 towns
towns
Launch of Prepaid
Offerings
Sub Base crossed 1
million
Exited EBITDA
Positive
FY06
FY06
222
222 towns
towns
Launch of Long
Validity Products
Became 1000Cr
Company
FY07
FY07
410
410 towns
towns
Sub Base Crossed 3
million
Robust growth in
Financials
Exited Cash Positive
Successful operational turnaround through a fine balance of Market
Market Share and Financials
18
Advanced Network Architecture
World Class network leads to robust and Reliable operations
High “resilience” of network
architecture provides strong
platform for scalability
Switches
“Distributed network” design
optimizes transmission costs
Pioneers in RF
Awarded for the best
performance in Key Network
Parameters
New Technology RF
19
Reaching Out with a Strong Brand
Touching
Touchinglives
livesat
at
every
everystage
stage
Best
Bestin
inClass
Class
Network
Network
Infrastructure
Infrastructure
Pioneers
Pioneersin
in
wireless
wirelesshome
home
phones
phones
Providing
Providingthe
the
fastest
fastestwireless
wireless
data
dataservices
services
20
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
21
FY07 Highlights
11 Subscribers
Subscribers
EOP
EOP crossed
crossed 33 million
million subscribers
subscribers ::
67%
67% growth
growth over
over last
last year
year
22 Revenue
Revenue
Revenue
Revenue crossed
crossed Rs.1400Cr
Rs.1400Cr ::
30%
30% growth
growth over
over last
last year
year
33 EBITDA
EBITDA
EBITDA
EBITDA crossed
crossed Rs.300Cr
Rs.300Cr ::
142%
142% growth
growth over
over last
last year
year
44 Cash
Cash Profit
Profit
Cash
Cash Profit
Profit over
over Rs.130Crs
Rs.130Crs ::
624%
624% growth
growth over
over last
last year
year
55 PBT
PBT
74%
74% improvement
improvement over
over last
last year
year
22
SCORECARD FY07 vs FY06
FY 06
FY 07
% improvement
EOP
EOPSub
SubBase
Base(Nos.
(Nos.ininlacs)
lacs)
18.40
18.40
30.74
30.74
67%
67%
Total
TotalRevenue
Revenue(Rs.Crs.)
(Rs.Crs.)
1097
1097
1422
1422
30%
30%
EBITDA
EBITDA(Rs.Crs.)
(Rs.Crs.)
125
125
303
303
142%
142%
EBITDA
EBITDAMargin
Margin%%
11%
11%
21%
21%
91%
91%
Cash
CashProfit
Profit(Rs.Crs.)
(Rs.Crs.)
(21)
(21)
131
131
624%
624%
PAT
PAT(Rs.Crs.)
(Rs.Crs.)
(541)
(541)
(311)
(311)
74%
74%
EBITDA
EBITDA Crosses
Crosses Rs.300Crs
Rs.300Crs
Full
Full Year
Year Cash
Cash Profit
Profit
23
TTML Operations
(Q3 FY 06 – Q4 FY 07)
Subscriber Base
Market Share
3,300
3,074
3,100
2,900
R8
G
CA
2,700
2,500
2,300
2,711
12.1%
12.0%
11.7%
11.5%
2,350
2,104
2,100
1,900
9%
12.5%
11.0%
11.2%
11.3%
10.8%
10.5%
1,840
10.5%
1,677
1,700
Cost per Sub
Q4FY06
Q3FY06
Q2FY06
Productivity
2,700
650
2,425
2,500
562
550
2,300
500
449
450
2,043
2,100
413
400
1,844
1,900
374
2,493
2,164
479
1,699
340
350
1,700
Operational
Operational cost
cost per
per sub
sub is
is comparable
comparable to
to Industry
Industry
Q4FY07
Q3FY07
Q2FY07
Q1FY07
Q4FY07
Q3FY07
Q2FY07
Q1FY07
Q4FY06
Q3FY06
Q4FY06
1,500
300
Q3FY06
600
Q1FY06
Q4FY05
Q4FY06
Q3FY06
Q2FY06
Q1FY06
Q4FY05
Q3FY05
Q3FY05
10.0%
1,500
24
Growing faster than the market
Sub Base
(mn)
23
G
CA
2%
5
R
10
O.78
FY05
G
CA
Market
TTML
9%
8
R
2.78
FY07
Market growing at CAGR of 52% over last 2 years
TTML grew at a CAGR of 89% in the same period
25
Enterprise – Integrated Play
Fixed Wireless
Phone
V-Data
Mobile
Audio
Conferencing
Market Share
TTML
42%
Office on
Mobile
Fixed Wired
Phone
Others
58%
ADSL
* Wireline & Data Products
Wireless
Access
SMS Based
Application
Mobile
Shopping
High capacity
Leased Lines
26
TTML - Financials
(Q3 FY 06 – Q4 FY 07)
Revenue
EBITDA
410
389
390
83
367
85
370
340
350
75
324
64
307
65
289
EBITDA Margin
18%
(100)
14%
(93)
(120)
Q4FY07
Q3FY07
Q2FY07
Q1FY07
Q4FY06
12%
Q3FY06
Q4FY07
(59)
(80)
14%
(140)
(160)
Q4FY07
(45)
(60)
18%
16%
Q3FY07
Q2FY07
(40)
19%
Q1FY07
(20)
22%
18%
-
Q4FY06
23%
Q3FY06
25%
20%
Q3FY07
PAT
26%
24%
Q2FY07
40
Q3FY06
Q4FY07
Q3FY07
35
Q2FY07
250
Q1FY07
45
Q4FY06
270
Q1FY07
290
Q3FY06
55
58
55
Q4FY06
330
310
96
95
(113)
(129)
(152)
Consistent
Consistent Financial
Financial Performance
Performance
27
Significant Investments for
aggressive growth
Coverage of Population Centers
Capex (Rs.Cr.)
800
450
738
410
400
350
700
300
250
222
200
600
564
150
120
100
507
500
50
FY05
FY06
FY07
400
No. of Sites
1,300
1,234
300
1,200
1,100
200
1,000
900
817
100
800
694
700
FY05
FY06
FY07
600
FY05
FY06
FY07
28
Per Subs Trend
Revenue & Costs Per Subs (Rs p.m)
Positive EBITDA from Q1 FY06
1500
1,444
Cash Profit from Q4 FY 06
1350
1200
1,118
1050
900
1,013
891
885
792
750
730
700
600
764
678
610
738
650
635
562
582
547
479
450
449
561
509
415
482
374
300
Q4 FY05
Q1 FY06
Q2 FY06
Q3 FY06
Revenue per sub
Q4 FY06
Q1 FY07
Operational cost per sub
Q2 FY07
Q3 FY07
508
441
340
Q4 FY07
Total cost per sub
Operational
Operational cost
cost per
per sub
sub is
is comparable
comparable to
to Industry
Industry
29
Contents
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
30
Process Training & Certification
ISO Documented
Processes
In-track
In-track
Training
Process Audit
Employees
Out-track
Out-track
Outsourced
& Partners
Certification
Quarterly Cycle
31
The Rural-Urban Mix
Urban
UrbanStrategy
Strategy
Branded
BrandedShops
Shops
Organized
Organized
Retail
Retail
Youth
YouthFocus
Focus
Rural Subscribers
200,000
200,000
150,000
100,000
Exploring
Exploring
untapped
untappedvillages
villages
62,000
682
3,000
Q3FY06
Q4FY06
Branded
BrandedVan
Van
Bullock
BullockCart
Cart
109,000
50,000
15,000
Q4FY07
Q3FY07
Q2FY07
Q1FY07
Corporate
Corporate
Focus
Focus
Rural
RuralReach
Reach
Strategy
Strategy
Covering
CoveringSales
Salesofof
Mobile,
Mobile,FWPs
FWPs
and
RCVs
and RCVs
32
Innovate & Re-invent
PTB in Autorikshaw
Mobile PTB
PTB in BEST Bus
PCOs
PCOsInstalled
Installedat
at
BEST
BESTBuses
Buses
Police
PoliceChowkies
Chowkies
Airports
Airports
Railway
RailwayStations
Stations
33
Differentiator – Bulls Eye Approach
Value to
Shareholders
Employee
Operational Efficiency
Enterprise
Rural
Robust Growth
34
TTML Key Business Parameters
Year on Year Growth (FY05 to FY07)
EOP Subscriber Base (Mn)
Revenue (Rs. Crs.)
1422
1422
3.1
3.1
1097
1097
1.8
1.8
807
807
11
0
Year 1
0
Year 2
Year 1
Year 2
Year 3
Year 3
EBITDA (Rs.Crs.)
Cash Profit (Rs. Crs.)
131
131
303
303
Year 1
125
125
0
Year 2
(21)
(21)
Year 3
Year 1
0
Year 2
(66)
(66)
Year 3
(210)
(210)
35
Operational Turnaround Highlights
Market
Share
Market
Share
rd
th Position
3
63
rd
th
6 Position
##11in
Customer
Low
in
Customer
in
Customer
Low
in
Customer
Care
&
Network
Care
&
Network
Care
&
Network
Care
& Network
Performance
Performance
Performance
Performance
Accumulated
Accumulated
Losses
Losses
PAT
PAT
(Negative)
(Negative)
Improved
Improved74%
74%
Last Entrant into
crowded market
Cash
CashProfit
Profit
Positive
5 Seq. quarters
(Negative)
Positive
5 Seq. quarters
(Negative)
Revenue
Revenue
Over
807Cr
1400Cr
Over
807Cr
1400Cr
Cost
CostPer
PerSub
Sub
1047
340
1047
340
EBITDA
EBITDA
Positive
88Seq.
(Negative)
Positive
Seq.quarters
quarters
(Negative)
36
624%
Increasing
Increasing Market
Market Share
Share
Increasing
Increasing Operating
Operating
Profits
Profits (EBITDA)
(EBITDA)
Leveraging
Leveraging on
on People
People
Training
Training &
& Certification
Certification
Significant improvement in revenue
Most
Most aggressive
aggressive improvement
improvement
In
In Operational
Operational Efficiency
Efficiency
Crossed the 3 million Subscriber
Landmark
Fastest
Fastest Growing
Growing
Subscriber
Subscriber base
base (89%
(89% CAGR)
CAGR)
133%
135%
Significant improvement in Productivity
242%
Significant improvement in Cost efficiency
130%
Significant improvement in Cash Profit
167%
EBITDA positive 8 quarters in a row
EBITDA over Rs.300 Cr
…in Summary
37
Thank You
38