Investor Presentation
September 8, 2008 Table of Contents
1. Bangladesh Economic Backdrop 3
2. Industry Overview 5
3. Overview of Grameenphone 9
4. Grameenphone Operational Performance 18
2 1. Bangladesh Economic Backdrop
3 Bangladesh: Large Growth Economy
7th most populous nation with 55% of people in the 15-64 age group.
Demographics Population (2007E) 140.6 million Population Growth Rate (2007) 1.3% Population Distribution (2001 Census) 0 – 14 years: 39.1% 15 – 64 years: 54.7% 65+ y ears: 6.2% Rangapur Median age Dinjapur Total: 22.8 y ears Male: 22.8 y ears Female: 22.9 y ears Literacy Rate of ages 15 and above Male: 53.9% Sylhet Female: 31.8%
Religion Muslim 83%, Hindu 16%, other 1% BANGLADESH Area 147,570 sq. km Population Density (2007E) 952 per sq. km Legal System Based on English Common Law Bogra Dhaka Faridpur Comilla Economic Indicators GDP Per Capita FY2007E US$482.3
Khulna Reserves of foreign exchange and gold Dec 2007 US$5.1 billion Barisal Chittagong Annual CPI Inflation 2007 7.2% Av g. Exchange Rate (BDT/US$, 2007) 68.9
Interest Rate (Money Market Rate 2007) 5.0%
Market Cap / GDP (%) (Jul 2008) ~36.0%
Source: Population and growth from Bangladesh Bank. Other figures from Economist Intelligence Unit, July 2008. CIA – The World Factbook, July 2008. 2001 Bangladesh Census.
4 2. Industry Overview
5 Bangladesh - Premium Telecom Market
One of the fastest growing telecom markets with significant future growth potential
135% Pakistan 115% Banglade sh Vietnam 95% India 75%
Sri Lanka Indonesia 55%
Philippines 35% Thailand China Malaysia Singapore 15% Hong Kong Korea Japan Taiwan Mobile Subscriber MobileCAGR (2003-2Q’08) Subscriber (5%) 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0%
Mobile Penetration (as of 2Q’08) Note: Size of bubble denotes relative population of country. Developed Mar ket Developing Market Population as of 2008. Source: Bangladesh Bank for Bangladesh and EIU for others. Mobile subscribers as of 2Q’08. Source: BTRC for Bangladesh and Informa Telecoms & Media for others.
Key Telecom Market Variables 2007 2Q’08 Mobile Penetration (1) 24.4% 31.1% Fixed Line Penetration (2) 0.8% 0.9% Internet Penetration (2) 0.4% -- (1) Subscribers for 2007 and 2Q’08 from BTRC. Subscribers for 2003-2005 taken from Ministry of Finance Economics Review and subscribers for Mobile Subscriber CAGR (2003-2Q’08) (1) -- 100.5% 2006 taken from Pyramid Research. (2) Source: BTRC for fixed-line subscribers, ITU for Internet penetration. Population from Bangladesh Bank.
6 Wireless Market Overview
Bangladesh Wireless Market Evolution NTT DoCoMo acquired 30% in TMIB (pending approval) Warid Telecom entered market (May 2007) 43.7
SingTel acquired 45% in PBTL 34.4 (May 2005) 31.1% Orascom purchased Banglalink 21.5 (September 2004) 24.4%
9.3 15.5% 4.2 Subscribers (mm) 1.9 3.1% 6.8% Penetration 1.4% 2003 2004 2005 2006 2007 Q2'08
Subscription Market Share 6.3 % 7.6% 2 .1% 2.1% 9 .4% 7.1% 4 .7% 5.6 % 2.5% 2.4% Warid 4.1% 3.9%
Teletalk 21.1% 26.4 % 22 .4% 27.0% 18.6 % 18.0%
CityCell 9.8 % 8.9% 11.1% 15.2% 20.6 % 2 1.6% AKTEL Banglalink 59.8% 57.5% 59.8% GP 50 .1% 48.0 % 4 6.5%
2003 2004 2005 2006 2007 Q208 (e) (1) Subscribers for 2007 and Q2’08 from BTRC, subscribers for 2006 from Pyramid Research and subscribers for 2003-2005 taken from Ministry of Finance Economic Review.
7 Overview of Key Telecom Regulations
Current License fee BDT50.0 mm + annual revenue sharing of 5.5% of collected rent and call charges + VAS License License All current wireless licenses except for Warid and Teletalk to expire in 2011
Tariff Range fixed between Taka 0.25 to Taka 2.00 ( 0.4cents - 3cents ) Tariff and promotions Tariff and promotions Promotional tariffs allowed for a maximum of three consecutive months
Current Interconnection charge fixed at BDT0.40 (0.6 cents ) New interconnection regime in 3Q’08 and 4Q’08 to replace bilateral connections between operators with operators Interconnection Interconnection connecting to an interconnection exchange (ICX) for routing domestic call and to International gateways (IGW) for international calls with revenue sharing agreement between all parties
Bangladesh Telecom Regulatory Commission (BTRC) manages and distributes spectrum amongst various parties Spectrum Spectrum Spectrum Management Committee has been set up to manage radio frequency
No regulations specifically concerning the foreign ownership of telecommunications companies in Bangladesh Foreign Ownership − However foreign companies were prohibited from participating in the bidding process for licensing of Foreign Ownership international voice and data gateways (IGW, ICX). The draft guidelines for Wi-Max license however allows foreign companies to participate if 60% or less foreign ownership of the applicant company. Current operators may not apply - USD:BDT = 68.58 (As on March 31, 2008. Source: Bangladesh Bank.)
8 3. Overview of Grameenphone
9 Introduction to Grameenphone
The largest telecommunications operator in Bangladesh by revenue and subscriber base.
Grameenphone Limited (“GP”, the “Company”) was established in 1996 and commenced services on March 1997 as a joint venture between Telenor of Norway and Grameen Telecom
GP is a strong wireless operator in Bangladesh with approximately 20.3 million subscribers at June 30, 2008 with 46.5% of the Bangladesh wireless market
For the fiscal year ended December 2007, GP generated total revenues of US$792 mn and underlying EBITDA of US$396 mn, representing an EBITDA margin of 50.1%
GP operates on the GSM 900 standard with a total bandwidth of 7.4 MHz; and the GSM 1800 standard with a total bandwidth of 7.2 MHz
The Company has a comprehensive network, with over 10,000 base stations, covering 97% of Bangladesh’s population and is GPRS/EDGE enabled
USD:BDT = 68.58 (As on March 31, 2008. Source: Bangladesh Bank.)
10 GP Milestones
Jan 2006 Launch of Business Soluti ons, customized Significant Contributions to the development of offering for businesses wireless telecommunications in Bangladesh. Jan 2006 Reached 6 million subscribers
Apr 2005 Jul 2006 Feb 2007 Jan 2008 Reached 3 million Launch Cellbazaar Re-launching of Introduces Bl ackBerr y subscribers Business Soluti ons services to Bangladesh
Mar 1997 Aug 2003 Apr 2005 Feb 2006 Feb 2007 Apr 2008 Commenced operation Reached One million Launched Electronic Launch of Community Launching New VAS ; Brand positioning and on the Independence subscribers Recharge system Information Centre Bull Stock Information, launching of “stay Day of Bangladesh (Flexi load) Missed Call Alert close” campaign
1997–1999 2000–2002 2003 2004 2005 2006 2007 2008
Jun 1998 2001 Oct 2003 Aug 2004 Apr 2005 Nov 2006 Apr 2007 May 2008 Launched mobile to Launched Prepai d Reached 2 million Launch of “Djuice” Celebrated 10 million Re-Brandi ng of Djuice Launched “Customer mobile ser vice (without Launched WAP product with PSTN subscribers brand targeting the subscribers i n 10 yrs & Care” Campaign service PSTN access) connecti vity youth segment launched new GP logo
Aug 1999 2002 Aug 2005 Nov 2006 Apr 2007 June 2008 Launched first Prepai d Reached 4 million Launch of Healthline Launched PayForMe Reached 20 million Bangladesh Business Ser vice in the country subscribers Ser vice subscribers Award for “Best Joint venture Enterprise” Sep 2005 Dec 2006 Dec 2007 Launched EDGE and Launched Smile Reached 16 million Voice SMS for the first Prepaid & xplor e subscribers time i n Bangladesh Postpaid
Oct 2005 Dec 2006 Reached 5 million Launched Bill Pay subscribers Ser vice
11 Key Strategic Initiatives
Limit decline in APPM, with quality offering, higher % contribution from VAS ConsolidateConsolidate Premium Premium Position Position Maintain reputation for superior network coverage / reliability and retain high income subscribers
ExploitExploit Untapped Untapped Potential Potential Tailored strategy envisaged, including bundled product with handsets inin Rural Rural / Low/ Low Income Income Increase distribution and penetration into rural areas SubsSubs
CapexCapex and and Operational Operational Continued discipline over operating costs and capital expenditures EfficienciesEfficiencies to to Improve Improve Recently entered into long term capex contract with Huawei FCFFCF Generation Generation
Launch of Stay Close Campaign in April 2008 ContinueContinue to to Reinforce Reinforce GP GP Brand and Brand Values Brand and Brand Values 360 degree media campaign to reinforce key messages across all customer sub-segments
Substantial scope for increasing revenues from non-voice services IncreaseIncrease Revenue Revenue from from Non Voice Services Non Voice Services Further expand presence as one of the largest providers of Internet access in Bangladesh
12 GP Products and Services
Comprehensive line of products and services
GP Smile Prepaid GP xplore Postpaid
Target Market: Youth Target Market: Mass Consumers Target Market: High Income Mass and Product Type: Prepaid Product Type: Prepaid Professionals Focus on Music, Messaging and Community to Offering competitive tariff, easy recharge and Product Type: Postpaid appeal to the youth balance check facilities etc. Offering competitive tariff with features such as Completely separate from the Grameenphone unlimited internet, flat call tariff, easy bill brand payment facilities etc.
GP Business Solutions GP Public Phone GP Village Phone
Target Market: Business Target Market: Urban Low Income Segment Target Market: Rural Product Type: Postpaid & Prepaid Product Type: Prepaid for calling businesses Product Type: Prepaid for calling businesses Customized solutions for Corporations, SME Low tariff appealing to use the phone to Catered specifically to the rural subscribers to and SOHO businesses generate businesses with bonus on usage generate income from phone business through Provides closed user group functionality, subsidized tariff business messaging, Blackberry services, priority customer service etc.
Source: Company.
13 Innovative Data Portfolio
Market leader in providing non-voice services
Messaging Services Music and Data Infotainment Innovative Services
MMS and mobile email services, Dedicated WAP portal for value Wide range of services to keep Offers award winning CellBazaar Blackberry service and added services. Branded instant subscribers updated with latest and Healthline service. “PayForMe” service messenger service news, stock information, beauty Community Info centers provide tips etc. internet to rural population
MMS The Mobile Store
GP World Instant Messenger Romance 24 Hour Healthline Voice SMS
Bull Stock Information Utility Bill payment service Missed call Alerts Business SMS Internet
Welcome Tunes
Pay f or Me (Collect call Service)
Source: Company.
14 Network Overview
Advanced, countrywide GSM network
Voice Coverage (Mar. 2008) Data Coverage (Mar. 2008) Key Network Equipment Vendors
Indoor Coverage 0 ~ (78) dBm Outdoor Coverage 0 ~ (95) dBm
Almost 100% Population coverage
The Network is EDGE/GPRS enabled
15 Network Overview (Cont’d)
GP Fiber Networks
Fiber Lengths • Highway fiber: 2,325 km
TGC • Railway fiber: 1,831 km DH1 DPRP TX Sayed Lalmo nirhat • Aerial Fiber: 35 km DPGP pur Bada Kaunia G1 rganj Rang DPT pur WNR Parbatip • PGCB fiber: 286 km ur Biramp ur RW Gaiban da Joypurhat Bonarp Dewang ara anj N Bogra Netrokona Jawar Bazar Sylh SYALH1 Bogra Jam Pearpur et alpu Santahar Switch Sarishabari r Mymonsingh Mohongan RSTALT Lalabazar RSTWNR Atrai G Gouripurj F Hatikamrul Switch o Atharobari e Kulaura Natore Sirajgong Gafargaon NandangasiNTBNP1 Kishorgong n Rajshahi Tangail c Abdulpur Ullapara Shaestganj Mirzapur Bajitpur Srimangalh Elenga u Bhangora Joydebpur Bharob bazar Saistagong Pakshi Ishwardi g Tongi o Brahmon baria n Poradhaha Kustia Narsingdi Pangsha Rajbari g Kamlapur Akhaura Gandaria Chuadanga Narayangong NGMGGP DHHBD1 CMELTP CMMNMP Comilla Mubarakgang CMKLBP FPBBR1 Laksam Jessore Jessore CMPTDP Switch Chandpur Noapara CGMIRP Siramoni Chatkhil F e Khulna Batazore n FNSDRP Mirersharai Kaukhali i CGMIRP Barishal Khulna Bagerhat CGSKDP Switch Switch Hathazar CGHTZP CGOR Vandaria i CGSLCP S Old Railway station Tushkhali Central Railway Building
HW Fiber SDH Node position BR Fiber MSC position PGCB Fiber Remote BSC position
16 GP Centers & Community Information Centers
Convenient one-stop shop for clients’ everyday wireless communication needs
GP Center GP Community Information Center
More than 550 CICs at 64 Districts in 427 Upzillas as of June 30, 2008 Flagship sales and service point shops designed to serve GP subscribers GP v alue added services such as FlexiLoad, Ring tones downloading etc. Typical GP Center Inauguration
Internet surfing Content on health, & e-mailing agriculture, etc.
E-gov ernment services GP CIC Telemedicine services 82 GP centers as of March 31, 2008 aimed at servicing GP customers
Sales and recharge of connections Chatting with Voice, Ty ping, Scanning, Various Product related information and Services Picture, & Video Printing, E-Fax, & conferencing CD Writing Genuine Handsets, GPRS, EDGE Modem and Accessories Any other solution required by GP subscribers f or seamless service
Multimedia education for children (Meena Cartoon, courtesy of UNDP)
17 4. Grameenphone Operational Performance
18 GP Key Metrics
GP Mobile Subscribers Revenue (mm) (US$ mm) 132.1% 791.8 109.4% 20.3 17.8 56.8% 665.5 16.5 49.6% 43.3% 10.8 429.8 54.9% 53.2% 48.3% 94.1% 286.2 5.5 19.0% 217.0 215.0 182.6 14.0% 2.4 8.0% 1.1
2003 2004 2005 2006 2007 Q2 08 Q2 08 2003 2004 2005 2006 2007 Q108 Q208
GP Subscribers (mm) Y-o-Y Grow th Revenue ($mm) y .o.y. grow th
EBITDA (1) (US$ mm)
396.5 64.5% 389.0 61.0% 57.6% 374.2 50.1% 47.3% 43.3% GP achieved significant 247.4 28.2% 56.2% 49.1% subscriber and revenue growth 175.3 during the rapid growth of 118.3 103.0 93.3 60.7 Bangladesh’s wireless sector
2003 2004 2005 2006 2007 Q108 Q208
EBITDA ($mm) Margin %
Note: (1)2007 and Q208 EBITDA (in Blue) is normalized and excludes extraordinary expenses/charges. USD:BDT = 68.58 (As on March 31, 2008. Source: Bangladesh Bank.) : Source: Company.
19 Operational Performance
GP Subscribers (mm), Prepaid as % Total GP Market Share (1)
20.3 59.8% 57.5% 59.8% 17.8 16.5 50.1% 48.0% 45.7% 46.5%
96.5% 97.6% 97.9% 93.1% 10.8 87.6% 78.8% 5.5 95.1% 2.4 1.1
2003 2004 2005 2006 2007 Q108 Q208 2003 2004 2005 2006 2007 1Q 2008 2Q 2008
Net Adds (‘000)
GP has built a commanding market share and has strong 2,503 2,032 1,867 subscriber additions despite 1,355 1,354 1,165 1,338 1,322 884 945 intense competition
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208
Source: Company. (1) Subscribers for 2007 and 1Q’08 from BTRC. Subscribers for 2003-2005 taken from Ministry of Finance Economic Review and subscribers for 2006 taken from Pyramid Research.
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