FY07 Results

8/8/2019 FY07 Results

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TataTata

indicomindicom

Tata Teleservices (Maharashtra) LimitedTata Teleservices (Maharashtra) Limited


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The Tata Group

The India Telecom Opportunity

Tata Groups Telecom Leadership Play

Tata Teleservices (Maharashtra) Limited

Key Performance Indicators

What makes us Unique

Contents


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Over 50% of Group Revenuesearned from outside India

Over 50% of Group Revenuesearned from outside India

Largest Employerin the Private Sector with 250,000 Employees**

Largest Employerin the Private Sector with 250,000 Employees**

FY 06-07 Revenues (est.)** of USD 27.1 Bn, Profits (est.) of USD 2.4 Bn

FY 06-07 Revenues (est.)** of USD 27.1 Bn, Profits (est.) of USD 2.4 Bn

Market Capitalization** of USD 54 Bn, Highest in India

Market Capitalization** of USD 54 Bn, Highest in India

OnlyIndian Entity in Forbess list of Worlds 20 Most Reputed Companies

OnlyIndian Entity in Forbess list of Worlds 20 Most Reputed Companies

Indias MostRespected Multinational Business Conglomerate*

Indias MostRespected Multinational Business Conglomerate*

Indias LargestBusiness Group

Indias LargestBusiness Group

The Tata GroupThe Tata Group A SnapshotA Snapshot

* 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 marketcapitalization, and 47,000 employees to the Group

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Business SectorsBusiness Sectors

Materials, 23%

Consumer

Products, 5%

Energy, 7%

Information Systems

& Communications,

20%

Services, 9% Engineering, 31%

Chemicals, 4%

REVENUE FY 2006

TTL

VSNL

TCS

IndianHotels

Tata Power

TitanTata Tea

Tata Chemicals

Voltas

TataMotors

TataAutocomp

Tata Steel


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The Tata Group






Contents


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Savings Rate as a % of GDP

26%

30% 31%32%32%

0%

5%

10%15%

20%

25%

30%

35%

FY2003 FY2004 FY2005 FY2006 FY2007

The Macroeconomic EnvironmentThe Macroeconomic Environment

GDP Growth Rate

4%

8% 8% 8%

9%

0%

2%

4%

6%

8%

10%

FY2003 FY2004 FY2005 FY2006 FY2007

Inflation

3.4%

5.5%

4.4%

5.3%

6.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

FY2003 FY2004 FY2005 FY2006 FY2007

Forex Reserves(USD Bn)

78

118

142162

199

0

50

100

150

200

250

FY2003 FY2004 FY2005 FY2006 FY2007

Sources: RBI, CSO, Goldman Sachs

By 2032, India will be amongst the three largest economies in the world


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0

40

80

120

160

FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

Fixed Mobile Broadband

TelecomTelecom The Story Thus FarThe Story Thus Far

Source: TRAI, COAI, AUSPI

MnSubscribers

National Telecom Policy 99 :Introduction of Revenue

Share

Entry of

3rd and 4thGSM

Operators

Unified Access ServiceLicences issued

Calling Party Pays

Introduced

MicroPrepaid/ LongValidity Plans

launched

CDMALimitedMobility

Entry


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India outperforms ChinaIndia outperforms China

Source: Study paper on Indicators for Telecom Growth Subscribers value are as at the end of the year (December).


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India Growth PotentialIndia 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.


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Presence Across the ICT Service SpectrumPresence Across the ICT Service Spectrum

Enterprise WholesaleWireless Fixed Line Broadband DTH IT ITeS

TIEBU VSNLTTL* VSNL Tata Sky TCS Serwizsol

*Includes Tata Teleservices (TTSL) & Tata Teleservices (Maharashtra) Ltd (TTML)

16Mn wirelesssubscribers, 0.5Mn

wireline subscribers

0.2Mn broadbandsubscribers

Indias fastestgrowing DTHoperator

Serves majority of theTop 1000 enterprise

customers in India

Worlds 12th largest softwareservices company; software

vendor to worlds leading telcosand telecom equipment

manufacturers

3200 seat BPO;supports English,

Hindi and 9 Indianlanguages

Global No.1wholesale voice

provider


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TataGroup

Competitive LandscapeCompetitive Landscape

Enterprise WholesaleWireless Fixed Line Broadband DTH IT ITeS

TTL TIEBU VSNLTTL VSNL Tata Sky TCS Serwizsol

IncumbentGovt.

Operators

India-Centric

BhartiIndia-

Centric

Reliance

Hutch

Idea

Significant Presence No PresenceLimited Presence


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Fixed Wireless PhonesBest Service in Emerging Markets -

World Communication Awards 2005

Wireless InternetTTL is the first to launch ERP

access on PDA in India

Mobile Content / ApplicationsHigher bandwidth = better services

+ enhanced experience

Pay Telephony BoothsTTL has over 1 Mn high

ARPU PTB

Wireless ServicesWireless ServicesThe CDMA AdvantageThe CDMA Advantage Innovative Products & ServicesInnovative Products & Services

RoadWarrior Mobile VPNStrong uptake from segments

such as BFSI, Retail and Lottery

PARSECPayphone +PoS


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Wireless ServicesWireless ServicesHandsets PortfolioHandsets Portfolio

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 brandname in the Indian market

Most new handsets being launched are RUIM based and BREW enabled

TTLs Instachange Cardallows subscribers to change their handset whileretaining 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 OneNumber T-SIM Card

Low End / Mass Market High EndMid End / Youth Market


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TTL recently entered the Limca Book of Records by launching 100 exclusive outlets on asingle day

Wireless ServicesWireless ServicesDistribution ChannelDistribution Channel

Indias largest branded telecom retail chain

Over 3,300 exclusive outlets, occupying 0.6 Mn Sq Ft of prime retailspace

Extensive handset distribution reach through presence at over 60,000multi-brand retail outlets

Recharge vouchers distributed through more than 140,000 outlets


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The Tata Group






Contents


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Telecom Operators Business LifecycleTelecom Operators Business Lifecycle

Phase 1Setup

Phase 2Growth mode

Phase 3Maturity

Falling

Tariffs

Highly

Regulated

Industry

Infrastructure intensive industry

leading to longer gestation period

Rapid Technological changes

making certain assets obsolete

TTML is in the 4th

year of wirelessoperations

Once we get into matured mode, the business starts yielding recurring revenuewhich impacts positively on the financials of the company

Once we get into matured mode, the business starts yielding recurring revenuewhich impacts positively on the financials of the company


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The Story So FarThe Story So Far

Successful operational turnaround through a fine balance of MarkSuccessful operational turnaround through a fine balance of Market Share and Financialset Share and Financials

Commenced

CDMAWirelessoperations inMaharashtra

Launch of PrepaidOfferings

Sub Base crossed 1million

Exited EBITDAPositive

Launch of LongValidity Products

Became 1000CrCompany

Exited Cash Positive

Sub Base Crossed 3

million

Robust growth inFinancials

FY04Launch

FY04Launch

FY05120 towns

FY05120 towns

FY06222 towns

FY06222 towns

FY07410 towns

FY07410 towns


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Advanced Network ArchitectureAdvanced Network Architecture

High resilience of network

architecture provides strongplatform for scalability

Distributed network design

optimizes transmission costs

Awarded for the best

performance in Key NetworkParameters

World Class network leads to robust and Reliable operationsWorld Class network leads to robust and Reliable operations

Switches

Pioneers in RF

New Technology RF


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Reaching Out with a Strong BrandReaching Out with a Strong Brand

Touching lives atevery stage

Touching lives atevery stage

Best in Class

NetworkInfrastructure

Best in Class

NetworkInfrastructure

Pioneers in

wireless homephones

Pioneers in

wireless homephones

Providing the

fastest wirelessdata services

Providing the

fastest wirelessdata services


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The Tata Group






Contents


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FY07 HighlightsFY07 Highlights

SubscribersSubscribers11EOP crossed 3 million subscribers :67% growth over last year

EOP crossed 3 million subscribers :67% growth over last year

RevenueRevenue22Revenue crossed Rs.1400Cr :30% growth over last year

Revenue crossed Rs.1400Cr :30% growth over last year

EBITDAEBITDA33

EBITDA crossed Rs.300Cr :

142% growth over last year

EBITDA crossed Rs.300Cr :

142% growth over last year

Cash ProfitCash Profit44Cash Profit over Rs.130Crs :624% growth over last year

Cash Profit over Rs.130Crs :624% growth over last year

PBTPBT55 74% improvement over last year74% improvement over last year


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SCORECARD FY07 vs FY06SCORECARD FY07 vs FY06

Total Revenue (Rs.Crs.)Total Revenue (Rs.Crs.)

FY 06

EBITDA (Rs.Crs.)EBITDA (Rs.Crs.)

EBITDA Margin %EBITDA Margin %

Cash Profit (Rs.Crs.)Cash Profit (Rs.Crs.)

10971097

125125

11%11%

(21)(21)

30%30%

142%142%

91%91%

624%624%

14221422

303303

21%21%

131131

FY 07

EOP Sub Base (Nos. in lacs)EOP Sub Base (Nos. in lacs) 18.4018.40 67%67%30.7430.74

EBITDA Crosses Rs.300CrsEBITDA Crosses Rs.300Crs

% improvement

PAT (Rs.Crs.)PAT (Rs.Crs.) (541)(541) 74%74%(311)(311)

Full Year Cash ProfitFull Year Cash Profit


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TTML OperationsTTML Operations(Q3 FY 06(Q3 FY 06 Q4 FY 07)Q4 FY 07)

Operational cost per sub is comparable to IndustryOperational cost per sub is comparable to Industry

Subscriber Base Market Share

Cost per Sub Productivity

1,840

2,104

2,350

2,711

3,074

1,677

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

3,100

3,300

Q

3FY05

Q

4FY05

Q

1FY06

Q

2FY06

Q

3FY06

Q

4FY06

1,844

2,043

2,164

2,4252,493

1,699

1,500

1,700

1,900

2,100

2,300

2,500

2,700

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

10.5%

11.2%11.3%

11.7%

12.1%

10.8%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

Q3FY05

Q4FY05

Q1FY06

Q2FY06

Q3FY06

Q4FY06

479

449

413

374

340

562

300

350

400

450

500

550

600

650

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

CAGR8

9%


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Growing faster than the marketGrowing faster than the market

Market growing at CAGR of 52% over last 2 years

TTML grew at a CAGR of 89% in the same period

10

O.78

23

2.78

CAG

R52%

CAGR

89%

FY05 FY07

Sub Base(mn)

Market

TTML


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Market Share

* Wireline & Data Products

EnterpriseEnterprise Integrated PlayIntegrated Play

Mobile

Audio

Conferencing

Fixed WiredPhone

Fixed WirelessPhone

ADSL

High capacity

Leased LinesMobile

Shopping

SMS Based

Application

Wireless

Access

Office onMobile

V-Data

TTML

42%

Others

58%


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TTMLTTML -- FinancialsFinancials(Q3 FY 06(Q3 FY 06 Q4 FY 07)Q4 FY 07)

Consistent Financial PerformanceConsistent Financial Performance

Revenue EBITDA

EBITDA Margin PAT

307324

340

367

389

289

250

270

290

310

330

350

370

390

410

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

40

5558

64

83

96

35

45

55

65

75

85

95

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

18% 18%

19%

23%

25%

14%

12%

14%

16%

18%

20%

22%

24%

26%

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

(152)

(113)

(93)

(59)

(45)

(129)

(160)

(140)

(120)

(100)

(80)

(60)

(40)

(20)

-

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07


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694

1,234

817

600

700

800

900

1,000

1,100

1,200

1,300

FY05 FY06 FY07

Significant Investments forSignificant Investments for

aggressive growthaggressive growth

Capex (Rs.Cr.) Coverage of Population Centers

No. of Sites

120

222

410

-

50

100

150

200

250

300

350

400

450

FY05 FY06 FY07

738

507

564

-

100

200

300

400

500

600

700

800

FY05 FY06 FY07


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792

730

678635

582547

509482

441

885

700

610562

479449

415374

340

1,444

1,118

1,013

891

764738

650

561

508

300

450

600

750

900

1050

1200

1350

1500

Q4 FY05 Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY06 Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY07

Revenue per sub Operational cost per sub Total cost per sub

Per Subs TrendPer Subs Trend

Revenue & Costs Per Subs (Rs p.m)

Positive EBITDA from Q1 FY06

Cash Profit from Q4 FY 06

Operational cost per sub is comparable to IndustryOperational cost per sub is comparable to Industry


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The Tata Group






Contents


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Process Training & CertificationProcess Training & Certification

ISO Documented

Processes

Certification

Process

Audit

Train

ing

In-trackIn-trackEmployees

Out-trackOut-track

Outsourced& Partners

Quarterly Cycle


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The RuralThe Rural--Urban MixUrban Mix

Urban Strategy

Branded Shops

OrganizedRetail

Youth Focus

CorporateFocus

Urban StrategyBranded Shops

OrganizedRetail

Youth Focus

CorporateFocus

Rural ReachStrategy

Branded Van

Bullock Cart

Exploringuntapped villages

Covering Sales ofMobile, FWPsand RCVs

Rural ReachStrategyBranded Van

Bullock Cart

Exploringuntapped villages

Covering Sales ofMobile, FWPsand RCVs

3,00015,000

62,000

109,000

200,000

682

-

50,000

100,000

150,000

200,000

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

Rural Subscribers


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Innovate & ReInnovate & Re--inventinvent

PCOs Installed at

BEST Buses

Police Chowkies

Airports

Railway Stations

PCOs Installed at

BEST Buses

Police Chowkies

Airports

Railway Stations

PTB in Autorikshaw Mobile PTB

PTB in BEST Bus


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DifferentiatorDifferentiator Bulls Eye ApproachBulls Eye Approach

Robust Growth

Rural

Enterprise

Operational Efficiency

Employee

Value to

Shareholders

TTML Ke B siness Pa amete sTTML Key Business Parameters


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TTML Key Business ParametersTTML Key Business ParametersYear on Year Growth (FY05 to FY07)Year on Year Growth (FY05 to FY07)

0

1.81.8

11

3.13.1

Year 1 Year 2 Year 3

0

10971097

807807

14221422

Year 1 Year 2

0

125125

(66)(66)

Year 1

Year 2

0 (21)(21)

(210)(210)

131131

Year 1Year 2

EOP Subscriber Base (Mn) Revenue (Rs. Crs.)

Cash Profit (Rs. Crs.)EBITDA (Rs.Crs.)

Year 3

Year 3

Year 3

303303


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Operational Turnaround HighlightsOperational Turnaround Highlights

Market Share6th PositionMarket Share6th Position

EBITDA(Negative)

EBITDA(Negative)

Low in CustomerCare & Network

Performance

Low in Customer

Care & NetworkPerformance

Cost Per Sub1047Cost Per Sub1047

AccumulatedLosses

Accumulated

Losses

Cash Profit(Negative)Cash Profit(Negative)

Revenue

807CrRevenue

807Cr

PAT

(Negative)

PAT(Negative)

Market Share3rd PositionMarket Share3rd Position

EBITDAPositive 8 Seq. quarters

EBITDAPositive 8 Seq. quarters

# 1 in CustomerCare & Network

Performance

# 1 in CustomerCare & Network

Performance

Cost Per Sub340Cost Per Sub340

Cash ProfitPositive 5 Seq. quartersCash ProfitPositive 5 Seq. quarters

Revenue

Over 1400CrRevenue

Over 1400Cr

Last Entrant into

crowded market

PAT

(Negative)Improved 74%

PAT(Negative)

Improved 74%


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in Summaryin Summary

Most aggressive improvementIn Operational Efficiency

Most aggressive improvementIn Operational Efficiency

Increasing Market ShareIncreasing Market Share

Increasing OperatingProfits (EBITDA)Increasing OperatingProfits (EBITDA)

Leveraging on PeopleTraining & Certification

Leveraging on PeopleTraining & Certification

Fastest GrowingSubscriber base (89% CAGR)Fastest GrowingSubscriber base (89% CAGR)

Crossedthe3

millionSubscriber

Landmark

S

ignificantimp

rovementinre

venue

EBITDApositive8quartersi

narow

EBITDAoverR

s.300Cr

SignificantimprovementinC

ashProfit

Significantimpr

ovementinCostefficiency

S

ignificantimp

rovementinP

roductivity

167% 130% 242% 624% 133% 135%


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Thank You

FY07 Results

Documents