IDEA CELLULAR LIM ITED INVESTOR PRESENTATION Internal
Internal Idea Cellular – An Overview Pan India Pure Play Wireless Operator - Voice + Data Holds 16%^ (2G+3G* +4G* * ) shareholding in Indus (thru ABTL). No. 3 Additionally own 9,744 Operator in India with towers (1) 18.9% RM S 191,536 (2G+3G+4G) Serving ~ 184 million sites and ~115,500km subscribers (2) of OFC capability An Aditya Birla Group Company FY16 No.6 Ranked Operator Voice M inutes - 786bn in the World by Data Traffic - 298bn M B Subscribers (3) FY 15-16 Consolidated Revenue ~$5.4bn; EBITDA ~$2.0bn; Enterprise Value ~$11.9bn (4) ^ Providence Equity Partners, through its affiliates has invested INR 20,982mn in ABTL through Compulsorily Convertible Preference Shares, convertible into equity shares representing 30.3% of the total equity share capital of ABTL post conversion of these CCPS, which in turn reflects Providence Equity Partners’ beneficial equity interest in Indus Towers of 4.85% as of March 31, 2016 1 Revenue Market Share based on TRAI Q3FY16 revenue for UAS and Mobile licenses only. 2 2 VLR subs as of March 31, 2016 *3G in 21 service areas including Intra-Circle Roaming arrangements 3 Single Country Operations, data from GSMA Intelligence as of December 2015.. **4G in 10 service areas. 4 As of March 31, 2016 USD 1 = INR 66.33, RBI Ref rate as of March 31, 2016
Internal Since Inception, as Idea Grew & Evolved It Re-invented itself Thrice 2011 – 2015 2006 – 2010 1998 – 2005 1997 Upgraded to 3G and 4G Single Promoter Expanded to 8 Services Started with 2 Service Areas Became a Pan India Service Areas From No.3 to 3-Way J V M obile Service Provider One Amongst Top 3 No Presence No Presence 2G Service Areas Spectrum Profile 2G+ 3G+ 4G (6 LSAs) 2G+ 3G (7 LSAs) 2G+ 4G (4 LASs) 2G only (5 LSAs) Broadband Spectrum (3G/ 4G) coverage is over 87% of existing revenue 3 Owns 3G spectrum in 13 LSAs Owns spectrum to offer 4G services in 10 LSAs
Internal India Telecom Sector Backdrop Growth Drivers Competition Regulatory 73.6% (3) of Voice Top 3 operators garnered Spectrum harmonization process for Indian Mobile revenue market share 1800 MHz and 800 MHz frequency band Indian Active subscriber penetration (“RMS”). is near conclusion. Estimated 220 Mhz (measured on VLR) at 73.7% (~936 (1800 MHz) spectrum may be available Loop exited Mumbai circle in Nov’14 post million subscribers) (1) across 22 circles. license expiry. In Mar’15 auction RCom Low rural subscriber penetration of lost its 20 year old expiring 900MHz ~50.9% (~445 Mn) (1) . In FY16 ~48% of TRAI issued regulation on prohibition of spectrum in 5 circles, though in 2 of these new subscribers came from rural areas. discriminatory tariff for data services it acquired 1800MHz spectrum. (Feb’16). Data Feb’14 and Mar’15 spectrum auction ~91% of spectrum by Value (total industry spent Wireless Internet penetration at 30.9% TRAI Recommendation (Jan’16) on of $26bn) won by only 4 operators (incl. (~312Mn) (2) of Total Mobile Subscribers spectrum pricing for 700, 800, 900, 1800, Idea) – a trend towards consolidation. Nascent 11.8% (2) penetration of mobile 2100, 2300 & 2500 MHz spectrum. Consolidation in sector However, the reserve price of 700 MHz broadband subscriber (~120 Mn Subs). o RCom & MTS announced merger is kept at 4x of 1800 MHz. Strong mobile data traffic growth – o RCom & Aircel exclusive talks on (50.9% y-o-y growth for Idea Q4FY16 vs Guidelines for Spectrum Sharing combining wireless business Q4FY15) (Sep’15) and for Spectrum Trading o RJIO & RCom spectrum trading and (Oct’15) are announced. spectrum sharing deal Emerging revenue streams o Bharti Airtel acquired, through spectrum Mobile Banking & Digital Wallet IUC for domestic calls reduced from trading, Videocon’s 1800 MHz spectrum Launch of 4G services on LTE platform 20p/min to 14p/min, (No IUC for calls in 6 circles and entered into agreement M2M, IoT & Cloud originating from or terminating on for acquiring Aircel’s 2300 MHz spectrum WiFi wireline), IUC for International call in 8 circles. Digital content Services: Music, Movies increased from 40p/min to 53p/min (from Increase in Mobile Broadband 1 st Mar’15). Roaming charges celling & Video, Games, Rich Messaging, VoIP competition etc. has been revised downward (from 1 st o Launch of 4G services band during FY16 May’15). & FY17. o New 3G networks launch & expansion of existing 3G networks 1 As of March 31, 2016 based on TRAI report 4 2 As of December 31, 2015, TRAI performance Indicator Report 3 TRAI Q3FY16 revenue for UAS and Mobile licenses only. USD 1 = INR 66.33, RBI Ref rate as of March 31, 2016
Internal Indian Wireless Sector – Revenue Trend Sector Quarterly Gross Revenue (INR bn) Idea – Highest Revenue Market Share (RMS) improvement Idea has grown ~2.0x faster than industry over last 4 years [4.1% RMS increase in last 3 years] Industry Idea Rs bn 481.8 RMS, 465.5 81.1% 450.0 415.8 + 3.5% 375.8 RMS, 375.0 18.9% Q3FY16 300.0 225.0 Incremental Incremental RM S 33.5% RM S 33.5% 150.0 Others 75.0 91.3 81.6 + 11.8% 85.2% 67.0 55.8 - Idea, Q3FY13 Q3FY14 Q3FY15 Q3FY16* 14.8% In USD mn Q3FY13 Industry 5,666 6,269 7,019 7,265 Idea 841 1,010 1,231 1,376 *Q3FY16 revenue is negatively impacted due to reduction in IUC settlement and Cap on Roaming charges as well as increase in Service Tax rate RMS = Revenue Market Share 5 Source: TRAI revenue for UAS and Mobile licenses only. USD 1 = INR 66.33, RBI Ref rate as of March 31, 2016
Internal Industry & Idea - Subscriber Trends In Millions Rural Subs Urban Subs Rural Penetration Urban Penetration 1200.0 200.0% • Subscriber (subs) growth in India to continue as 162.8% the VLR subs penetration is still at 73.7% 1000.0 148.7% 150.0% 800.0 • Primarily new subscriber additions are from Rural 588.8 555.7 532.7 595.9 India. Idea leads the industry rural %, with 55.6%* 600.0 525.3 100.0% of Idea’s ~175 mn EoP consumer base from rural 400.0 38.3% 50.9% 50.0% India. 200.0 323.3 342.5 371.8 414.2 444.8 • Pan India mobility rural penetration at 50.9% only 0.0 0.0% and will be the key driver for future mobility FY12 FY13 FY14 FY15 FY16 industry subscriber growth. Only T op 3 Telecom EoP subs 919 868 905 970 1034 operators with wide scale rural presence will VLR subs 683 723 791 863 936 benefit from Rural mobility future growth VLR Pen% 56.5% 59.0% 63.8% 68.7% 73.7% • Industry VLR growth revival – Post FY13 addition of In Million FY12 FY13 FY14 FY15 FY16 only 40 mn VLR subs, last 3 years witnessed yearly VLR Industry EoP VLR 682.9 723.0 790.9 862.6 936.5 addition of around 70 mn. Industry Incr. VLR 112.0 40.1 67.9 71.8 73.8 • Idea enjoys highest incremental VLR M arket Share, in Idea EoP VLR 105.3 120.2 137.9 161.4 183.8 2 out of last 5 years. (FY 12 to FY16) Idea Incr. VLR 22.0 14.9 17.7 23.5 22.4 • Idea’s VLR market share improved by 4.2% to 19.6% in Idea EoP VLR MS 15.4% 16.6% 17.4% 18.7% 19.6% FY16 (from 15.4% in FY12) Idea Incr. VLR MS 19.7% 37.2% 26.0% 32.8% 30.4% VLR = Visitor Location Register (surrogate for active subscribers) 6 Source: TRAI * As of March 31, 2016
Internal Idea – The fastest growing Indian Telco Now One Amongst the Top 3 in Incremental Revenue Market Share IRMS RMS Q3’12-’16 FY12-15 FY14-15 30.9% 31.6% 30.5% 30.4% Telco 1 33.2% 32.5% 29.7% [ +1.9% ] Telco 2 23.4% 23.0% 23.0% 26.6% 24.4% 22.5% 22.3% [ +0.7% ] 18.9% Idea 17.5% 27.3% [ +4.5% ] 29.7% 16.1% 14.8% 14.4% 8.6% [ -1.9% ] Telco 4 8.6% Telco 5 [ -3.4% ] 6.6% 7.3% Telco 6 [+0.8% ] 5.5% 5.5% Telco 7 [ -1.8% ] 4.7% 5.2% 4.5% 3.5% Others [ -1.0% ] Q3FY12 Q3FY13 Q3FY14 Q3FY15 Q3FY16 7
Internal Idea 15 Service Areas – Core Strength Idea offers 3G services on its 8 Established Service Areas (Leadership) own spectrum in all its 8 Leadership Service Areas and RMS Q3FY16 1 Rank 2 Spectrum RMS Service Area Q3FY13 1 launched its 4G services in 6 Profile service areas till Mar’16. 41% of Kerala 34.3% 42.2% 1 2G/3G/4G India M.P. 33.7% 42.0% 1 2G/3G/4G Mobility Revenue Maharashtra 27.3% 32.9% 1 2G/3G/4G and 67.5% UP (W) 27.0% 31.6% 1 2G/3G of Idea Revenue Haryana 22.7% 27.3% 2 2G/3G/4G Idea Punjab 20.8% 27.2% 2 2G/3G/4G Incremental A.P. 18.9% 24.3% 2 2G/3G/4G RMS @51.6% Gujarat 18.4% 22.6% 2 2G/3G Total 25.4% 31.1% 1 7 Other Established Service Areas RMS RMS Rank 2 Spectrum 39.2% of Service Area Q3FY13 1 Q3FY16 1 Profile India Mobility Bihar 9.9% 14.3% 2 2G Revenue H.P. 9.1% 13.4% 2 2G/3G and 25.8% UPE 12.2% 14.0% 3 2G/3G Idea offers 3G services on its of Idea Revenue own spectrum in UPE, Delhi and Rajasthan 11.0% 13.1% 3 2G HP. Launched its 4G services in Idea Delhi 10.9% 12.6% 3 2G/3G Karnataka service area in Dec’15 Incremental Karnataka 9.4% 11.0% 4 2G/4G RMS @20% Mumbai 8.5% 10.8% 4 2G Total 10.1% 12.5% 3 # 1 Player # 2 Player # 3 Player # 4 Player 1 Source: TRAI revenue for UAS and Mobile licenses only. 8 2 Based on Q3FY16 revenue market share from TRAI report
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