IDEA CELLULAR LIM ITED INVESTOR PRESENTATION Restricted
Restricted 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 9,640 Operator in India with towers (1) 18.5% RM S 170,060 (2G+3G+4G) Serving ~ 182 million sites and ~105,600km subscribers (2) of OFC capability An Aditya Birla Group Company YTD Q3FY16 No.6 Ranked Operator Voice M inutes - 584.4bn in the World by Data Traffic - 215.7bn M B Subscribers (3) YTD Q3FY16 Consolidated Revenue ~$4.0bn; EBITDA ~$1.4bn; Enterprise Value ~$13.6bn (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% (assuming no other change in the equity share capital of Indus Towers) 1 Revenue Market Share based on TRAI Q2FY16 revenue for UAS and Mobile licenses only. 2 2 VLR subs as of December 31, 2015 *3G in 21 service areas including Intra-Circle Roaming arrangements 3 Single Country Operations, data from GSMA Intelligence as of September 2015.. **4G in 8 service areas with scheduled launch in 2 more by Mar’16 4 As of December 31, 2015 USD 1 = INR 66.33, RBI Ref rate as of December 31, 2015
Restricted Since Inception, as Idea Grew & Evolved It Re-invented itself Thrice 2011 – 2015 2006 – 2010 1998 – 2005 1997 Upgraded to 3G Services & Single Promoter Expanded to 8 added 4G Spectrum 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 (5LSAs) 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
Restricted India Telecom Sector Backdrop Growth Drivers Competition Regulatory 72.8% (3) of Voice Top 3 operators garnered TRAI issued regulation on prohibition Indian Mobile revenue market share of discriminatory tariff for data services Indian Active subscriber penetration (“RMS”). (Feb’16). (measured on VLR) at 71.7% (~907 Loop exited Mumbai circle in Nov’14 post million subscribers) (1) TRAI Recommendation (Jan’16) on license expiry. In Mar’15 auction RCom Low rural subscriber penetration of spectrum pricing for 700, 800, 900, lost its 20 year old expiring 900MHz ~49.5% (431.6 Mn) (1) . In FY15 ~65% of 1800, 2100, 2300 & 2500 MHz spectrum. spectrum in 5 circles, though in 2 of these new subscribers came from rural However, the reserve price of 700 MHz it acquired 1800MHz spectrum. areas. is kept at 4x of 1800 MHz. Feb’14 and Mar’15 spectrum auction Data ~91% of spectrum by Value (total industry TRAI regulation on compensation to spent of $26bn) won by only 4 operators Wireless Internet penetration at 30.6% customer for call drop (Oct’15) w.e.f. (incl. Idea) – a trend towards (300Mn) (2) of Total Mobile Subscribers 01 st Jan’16. The regulation was consolidation. challenged by telecom association Nascent 9.5% (2) penetration of mobile Consolidation in sector COAI & AUSPI & penalty is stayed by broadband subscriber (93 Mn Subs). o RCom & MTS announced merger court. Strong mobile data traffic growth – o RCom & Aircel exclusive talks on (75.8% y-o-y growth for Idea Q3FY16 Guidelines for Spectrum Sharing combining wireless business vs Q3FY15) (Sep’15) and for Spectrum Trading o RJIO & RCom spectrum trading and (Oct’15) are announced. Emerging revenue streams spectrum sharing deal o Idea to acquire, through spectrum Mobile Banking & Digital Wallet IUC for domestic calls reduced from trading, Videocon’s 1800 MHz spectrum Launch of 4G services on LTE 20p/min to 14p/min, (No IUC for calls in Gujarat and UPW circles to offer 4G platform originating from or terminating on services on LTE platform. M2M, IoT & Cloud wireline), IUC for International call Increase in Mobile Broadband WiFi increased from 40p/min to 53p/min competition Digital content Services: Music, (from 1 st Mar’15). Roaming charges o Launch of 4G services band during FY16 Movies & Video, Games, Rich celling has been revised downward (from 1 st May’15). Messaging, VoIP etc. & FY17. ( around 100 networks)* o New 3G networks launch & expansion of existing 3G networks 1 As of November 30, 2015 based on TRAI report 4 2 As of June 30, 2015, TRAI performance Indicator Report *On 800 MHz, 1800 MHz and 2300 MHz spectrum 3 TRAI Q2FY16 revenue for UAS and Mobile licenses only. USD 1 = INR 66.33, RBI Ref rate as of December 31, 2015
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 RMS, 473.7 81.5% 444.9 450.0 401.6 371.3 RMS, 375.0 18.5% Q2FY16 300.0 225.0 Incremental Incremental RM S 33.3% RM S 33.3% 150.0 Others 75.0 87.6 76.7 85.6% 63.7 53.4 0.0 Idea, Q2FY13 Q2FY14 Q2FY15 Q2FY16* 14.4% In USD mn Q2FY13 Industry 5,597 6,054 6,708 7,143 Idea 805 961 1,156 1,320 *Q2FY16 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 December 31, 2015
Restricted Industry & Idea - Subscriber Trends In Millions Rural Subs Urban Subs Rural Penetration Urban Penetration • Subscriber (subs) growth in India to continue as 1200.0 200.0% the VLR subs penetration is still at 71.7% 162.8% 1000.0 146.9% 150.0% • 800.0 Primarily new subscriber additions are from Rural 577.8 555.7 532.7 India. Idea leads the industry rural %, with 54.9%* 595.9 600.0 525.3 100.0% of Idea’s 172 mn EoP consumer base from rural 400.0 India. 50.0% 49.5% 200.0 38.3% 323.3 342.5 371.8 414.2 431.6 • Pan India mobility rural penetration at 49.5% only 0.0 0.0% and will be the key driver for future mobility FY12 FY13 FY14 FY15 Nov'15 industry subscriber growth. Only T op 3 Telecom EoP subs 919 868 905 970 1009 operators with wide scale rural presence will VLR subs 683 723 791 863 907 benefit from Rural mobility future growth VLR Pen% 56.5% 59.0% 63.8% 68.7% 71.7% • Industry VLR growth revival – Post FY13 addition of In Million FY12 FY13 FY14 FY15 Nov'15 only 40 mn VLR subs, FY14 and FY15 witnessed yearly Industry EoP VLR 682.9 723.0 790.9 862.6 907.1 VLR addition of nearly 70 mn Industry Incr. VLR 112.0 40.1 67.9 71.8 44.4 • Idea enjoys highest incremental VLR M arket Share, in Idea EoP VLR 105.3 120.2 137.9 161.4 176.8 2 out of last 4 years. Idea Incr. VLR 22.0 14.9 17.7 23.5 15.4 • Idea’s VLR market share improved by 3.3% to 18.7% in Idea EoP VLR MS 15.4% 16.6% 17.4% 18.7% 19.5% FY15 (from 15.4% in FY12) Idea Incr. VLR MS 19.7% 37.2% 26.0% 32.8% 34.6% VLR = Visitor Location Register (surrogate for active subscribers) 6 Source: TRAI * As of Se 30, 2015
Restricted Idea – The fastest growing Indian Telco Now One Amongst the Top 3 in Incremental Revenue Market Share IRMS RMS Q2’12-’16 FY12-15 FY14-15 31.0% 31.2% 30.4% 30.3% Telco 1 30.0% 33.2% 32.5% [ +1.2% ] Telco 2 23.3% 23.1% 23.0% 26.6% 24.4% 22.1% [ +1.1% ] 22.0% Idea 18.5% 17.2% 27.3% [ +4.5% ] 29.7% 15.8% 14.4% 14.0% 9.0% [ -1.6% ] Telco 4 8.4% Telco 5 [ -3.5% ] 6.8% 7.7% 5.7% Telco 6 [+1.0% ] 5.6% Telco 7 5.5% [ -2.2% ] 4.7% 4.1% 3.7% Others [ -0.5% ] Q2FY12 Q2FY13 Q2FY14 Q2FY15 Q2FY16 7
Restricted 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 Q2FY16 1 Rank 2 Spectrum RMS Service Area Q2FY13 1 launched its 4G services in 5 Profile service areas during Dec’15- 41% of Kerala 33.0% 41.6% 1 2G/3G/4G India Jan’16. Maharashtra 4G launch M.P. 32.3% 41.3% 1 2G/3G/4G Mobility scheduled before Mar’16. Revenue UP (W) 25.5% 32.0% 1 2G/3G and 67.3% Maharashtra 26.3% 31.8% 1 2G/3G/4G of Idea Revenue Haryana 23.1% 27.3% 2 2G/3G/4G Idea Punjab 20.6% 26.1% 2 2G/3G/4G Incremental A.P. 17.9% 23.2% 2 2G/3G/4G RMS @51.7% Gujarat 17.9% 21.7% 2 2G/3G Total 24.1% 30.3% 1 7 Other Established Service Areas 39.1% of RMS RMS Rank 2 Spectrum Service Area India Q2FY13 1 Q2FY16 1 Profile Mobility Bihar 9.9% 13.5% 2 2G Revenue H.P. 9.0% 12.7% 2 2G/3G and 26.1% of Idea UPE 12.3% 13.7% 3 2G/3G Idea offers 3G services on its Revenue own spectrum in UPE, Delhi and Rajasthan 11.1% 13.7% 3 2G Idea HP. Launched its 4G services in Delhi 10.7% 12.5% 3 2G/3G Incremental Karnataka service area in Dec’15 RMS Karnataka 9.1% 11.0% 4 2G/4G @19.9% Mumbai 8.4% 10.5% 4 2G Total 10.2% 12.3% 3 # 1 Player # 2 Player # 3 Player # 4 Player 1 Source: TRAI revenue for UAS and Mobile licenses only. 8 2 Based on Q2FY16 revenue market share from TRAI report
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