AnalystAnalyst MeetMeet
Q3Q3 FY08FY08
TataTata TeleservicesTeleservices (Maharashtra)(Maharashtra) LimitedLimited Contents
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Operations Highlights
Summary
2 Telecom – The Story Thus Far
160 Unified Access Service Licences issued Micro “Calling Party Pays” Prepaid/ Long Introduced Validity Plans launched 120 CDMA Limited Mobility Entry
Entry of 80 3rd and 4 th National Telecom Policy ‘99 : GSM Introduction of Revenue Operators
Mn Subscribers Share
40
0 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Fixed Mobile Broadband
Source: TRAI, COAI, AUSPI 3 IndiaIndia GrowthGrowth PotentialPotential
Wireless Subscribers in Yr 2010 Country Subs in Mn Teledensity CS 417 India in 2010 400 36% Macquarie 400 India in 2007 185 19.7% Citigroup 388 China 443 34% UBS 385 Philippines 39 45% Thailand 37 55% LB 361 Canada 18 56% CLSA 344 USA 224 75% Korea 40 82% JPM 339 Malaysia 22 83% Singapore 4 101% Gartner 300 UK 69 115% World Average 44% 200 250 300 350 400 450
Key growth drivers affordability (falling handset prices, lowest tariffs) availability (network, distribution)
Source: Based on data in Global Wireless Matrix 3006- Merrill Lynch.
4 Contents
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Operations Highlights
Summary
5 Presence Across the Telecom Service Spectrum
Wireless Fixed Line Broadband DTH Enterprise Wholesale IT ITeS
Tata TTML & TTML & VSNL Tata Sky TIEBU VSNL TCS Serwizsol Group TTSL TTSL
Incumbent India- Govt. Centric Operators
India- Bharti Centric
Reliance
Hutch
Idea
Significant Presence Limited Presence No Presence
6 Contents
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Operations Highlights
Summary
7 TheThe StoryStory SoSo Far…Far…
FY04FY04 FY05FY05 FY06FY06 FY07FY07 LaunchLaunch 120120 townstowns 222222 townstowns 410410 townstowns
LaunchLaunch ofof PrepaidPrepaid LaunchLaunch ofof LongLong SubSub BaseBase CrossedCrossed 33 OfferingsOfferings ValidityValidity ProductsProducts millionmillion CommencedCommenced CDMACDMA SubSub BaseBase crossedcrossed 11 BecameBecame 1000Cr1000Cr RobustRobust growthgrowth inin WirelessWireless millionmillion CompanyCompany FinancialsFinancials operationsoperations inin MaharashtraMaharashtra ExitedExited EBITDAEBITDA ExitedExited CashCash PositivePositive FullFull YearYear CashCash ProfitProfit PositivePositive
8 WirelessWireless ProductsProducts && ServicesServices
Fixed Wireless Phones Mobile Content / Applications Pay Telephony Booths “Best Service in Emerging Markets” - Higher bandwidth = better services TTML has around 5 Lakh World Communication Awards 2005 + enhanced experience high ARPU PTBs
Low End / Mass Market Mid End / Youth Market High End
9 TTMLTTML –– EnterpriseEnterprise IntegratedIntegrated PlayPlay
VAS Mobile
V-Data
Audio Conferencing Fixed Wireless Phone
Fixed Wired Phone ADSL
High capacity Leased Lines 10 IndicomIndicom EnterpriseEnterprise CustomersCustomers
11 TechnologyTechnology PartnersPartners
12 MobileMobile onon MobileMobile Innovate & Re -invent
PTB in Autorickshaw Mobile PTB
PTB in BEST Bus PCOsPCOs Installed Installed at at BESTBEST Buses Buses PolicePolice Chowkies Chowkies RailwayRailway Stations Stations
13 TheThe RuralRural InitiativeInitiative
Rural Subscribers
200,000
109,000
62,000
15,000 682 3,000 Q3FY06 Q4FY06 Q1FY07 Q2FY07 Q3FY07 Q4FY07
RuralRural ReachReach StrategyStrategy
BrandedBranded VanVan
BullockBullock CartCart
ExploringExploring untappeduntapped villagesvillages
CoveringCovering SalesSales ofof Mobile,Mobile, FWPs FWPs and and RCVs RCVs
14 MovingMoving upup thethe ValueValue ChainChain
DataData DivisionDivision LeveragingLeveraging thethe DataData CapabilitiesCapabilities ofof CDMACDMA TechnologyTechnology throughthrough V-DataV-Data andand relatedrelated solutionssolutions
CustomerCustomer ValueValue ProgramProgram (CVP)(CVP) SegmentedSegmented approachapproach towardstowards thethe existingexisting subscribersubscriber basebase toto improveimprove productproduct penetrationpenetration andand improveimprove CustomerCustomer Lifestyle.Lifestyle.
InsourceInsource ManagementManagement OfficeOffice (IMO)(IMO) RevolutionaryRevolutionary initiativeinitiative inin thisthis serviceservice industryindustry toto consolidateconsolidate directdirect customercustomer contactcontact programsprograms in-housein-house ratherrather thanthan outsource.outsource.
RetailRetail OverOver 230230 brandedbranded chainchain ofof storesstores coveringcovering overover 3500350000 Sq.fSq.f t.t. ofof primeprime retailretail space.space. ProvidingProviding servicesservices likelike salessales ofof Mobile,Mobile, WalWalky,ky, PrepaidPrepaid RCV,RCV, AccessoriesAccessories etcetc asas wellwell asas customercustomer serviceservice requestsrequests andand complacomplaintint management.management.
YouthYouth ProgramProgram SpecialSpecial focusfocus onon thethe youthyouth segment.Creatingsegment.Creating aa brandbrand associationassociation withwith thethe youthyouth andand providingproviding specialspecial tariffstariffs toto thesethese newnew entrantsentrants intointo thethe mobilemobile market.market.
15 ProcessProcess TrainingTraining && CertificationCertification
ISO Documented Processes
In-trackIn-track Employees Training RecertifiedRecertified ISOISO 9001:20009001:2000 withwith Process Audit Process zerozero non-conformitiesnon-conformities Out-trackOut-track Outsourced & Partners
Certification
Quarterly Cycle 16 Contents
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Operations Highlights
Summary
17 FY07FY07 && (9(9 months)months) FY08FY08 HighlightsHighlights
EOPEOP crossedcrossed 4.74.7 millionmillion subscriberssubscribers :: 11 SubscribersSubscribers TopTop 33 inin incrementalincremental MarketMarket ShareShare
FY07FY07 RevenuesRevenues crossedcrossed Rs.1400Cr Rs.1400Cr :: 22 RevenueRevenue 99 monthsmonths FY08FY08 RevenuesRevenues CrossedCrossed Rs.Rs. 1298Cr1298Cr
FY07FY07 EBITDAEBITDA crossedcrossed Rs.300Cr Rs.300Cr :: (( 142%142% growth)growth) 33 EBITDAEBITDA 99 monthsmonths FY08FY08 EBITDAEBITDA overover Rs.335CrRs.335Cr
FY07FY07 CashCash ProfitProfit overover Rs.130Crs: Rs.130Crs: (( 624%624% growth)growth) 44 CashCash ProfitProfit 99 monthsmonths FY08FY08 CashCash ProfitProfit overover Rs.217Cr.Rs.217Cr.
FY07FY07 74%74% improvementimprovement overover lastlast yearyear 55 PATPAT 99 monthsmonths FY08FY08 60%60% improvementimprovement overover lastlast yearyear
18 SCORECARD FY08 vs FY07 (9 months)
FY 07 FY 08
EOPEOP SubSub BaseBase (Nos.(Nos. inin million)million) 2.72.7 4.74.7
TotalTotal RevenueRevenue (Rs.Crs.)(Rs.Crs.) 10341034 12981298
EBITDAEBITDA (Rs.Crs.)(Rs.Crs.) 206206 335335
EBITDAEBITDA MarginMargin %% 20%20% 26%26%
CashCash ProfitProfit (Rs.Crs.)(Rs.Crs.) 7878 217217
PATPAT (Rs.Crs.)(Rs.Crs.) (265)(265) (105)(105)
1313 QuartersQuarters ofof ProgressiveProgressive GrowthGrowth -- Quarter Quarter onon QuartQuarterer
19 TTMLTTML OperationsOperations EfficiencyEfficiency
Subscriber Base (`000) Productivity (Subs per Employee) 4,696 3,291 4,127 3,037
3,478 2,709 3,074 2,493 2,711 2,425 2,350 2,164 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Cost per Sub (Rs.) EBITDA Margin (%)
28% 413 *
374 25% 25% 24% 337 23% 314 282 19% 251 * Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08
OperationalOperational parametersparameters areare comparablecomparable toto IndustryIndustry 20 TTMLTTML -- FinancialsFinancials Revenue (Rs. Crs) EBITDA (Rs. Crs)
460 128
428 106 100 409 97 389 83 367 342 64 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08
Cash Profit (Rs. Crs) PAT (Rs. Crs)
86 75
53 55* Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 42 (28) (27) 24 (46) (49) (59) *
(93) Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08
Forex losses and FCCB conversions impacted Cash Profit and PAT * Forex losses and FCCB conversions impacted Cash Profit and PAT 21 Contents
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Operations Highlights
Summary
22 IndustryIndustry RecognitionsRecognitions
“The“The positivepositive outcomesoutcomes ofof pursuingpursuing aa soundsound businessbusiness modelmodel,, fool-prooffool-proof strategies,strategies, streamlinedstreamlined processesprocesses andand cocontinuousntinuous progressprogress evaluationevaluation getsgets exemplifiedexemplified inin TTMLTTML perforperformancemance andand itsits everever improvingimproving,, figure-substantiatedfigure-substantiated tracktrack recordrecordinduced induced usus toto includeinclude itit inin ourour listlist ofof TurnaroundTurnaround candidates”candidates”
NominatedNominated forfor thethe NDTVNDTV Profit’sProfit’s BusinessBusiness LeadershipLeadership AwardAward 20072007
““TurnaroundTurnaround story,story, cruisingcruising aheadahead::
TTMLTTML hashas shownshown aa remarkableremarkable turnaroundturnaround inin financialfinancial andand operationaloperational parameters,parameters, whichwhich wewe believebelieve willwill reflereflectct againagain inin futurefuture performance,performance, backedbacked byby expertexpert toptop managementmanagement.”.”
23 TRAITRAI awardsawards TTMLTTML NoNo 11 OperatorOperator
OverOver AllAll CustomerCustomer Satisfaction:MumbaiSatisfaction:Mumbai
9696 95%95% 9494 9292 91%91% 90%90% 90%90% TTML: No 1 90 89%89% 90 amongst all 8888 87%87% 8686 8484 8282 BhartiBharti Hutch Hutch TTML TTML BPL BPL MTNL MTNL Reliance Reliance Benchmark > 95%
NetworkNetwork PerformancePerformance (Reliability(Reliability && Availability)Availability)
TTML, the only 100100 Service Provider The customer perception of 96%96% above benchmark 9595 93%93% the parameter Network 92% 92%92% 90%90% 92% Performance: Reliability & 9090 Availability 84%84% 8585
Only 2 out of 105 licensees 8080 surveyed meet the 7575 benchmark BhartiBharti Hutch Hutch TTML TTML BPL BPL MTNL MTNL Reliance Reliance Benchmark > 95%
Source: Survey conducted in Q1FY07 by TUV South Asia, an independent agency deputed by TRAI 24 TTML Achievements (FY05 to FY08)
SubscriberSubscriber BaseBase 66 FoldFold IncreaseIncrease
RevenuesRevenues DoubledDoubled thethe RevenueRevenue perper QuarterQuarter
EBITDAEBITDA 350%350% improvementimprovement BringingBringing ValueValue toto EBITDAEBITDA MarginMargin 206%206% improvementimprovement ShareholdersShareholders && StakeholdersStakeholders CashCash ProfitProfit 222%222% improvementimprovement
PATPAT 81%81% improvementimprovement
CostCost PerPer SubscriberSubscriber 76%76% reductionreduction
1313 QuartersQuarters ofof ProgressiveProgressive GrowthGrowth -- Quarter Quarter onon QuartQuarterer
Comparison from Q3 FY05 to Q3 FY08 25 Thank You
26 Disclaimer
Certain statements in this release concerning our Company objectives, future prospects, expectations may be forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Tata Teleservices (Maharashtra) Limited may, from time to time, make additional written and oral forward looking statements, including our reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.
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