Investor presentation
November 2009
Tata Teleservices (Maharashtra) LimitedTata Teleservices (Maharashtra) Limited
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Business overview
• TTML spearheads Tata Group’s presence in the telecommunication sector exclusively in the revenue rich circles of Mumbai and Maharashtra
• Benefits of economies of national scale with sister company, Tata p yTeleservices Limited (TTSL), together with the nimbleness and agility of a regionally focused player
Wireless Wireline Others
• CDMA• GSM
• Landline• Leased lines• Broadband internet access• Video conferencing
• Passive infrastructure• Distribution outlets
• WiFi
• 9.04 million mobile subscribers (as of Sep 09)
• 0.60 million wireline subscribers
• 64K broadband subscribers
• 2,155 owned towers• c.685 exclusive distribution
outlets
• 9,300 kms of optic fibre cable• 1,175 towns and cities across Mumbai and Maharashtra
64K broadband subscribers outlets
1
Significant ramp‐up in subscriber base
9,000
10,000
Launched "Digital Mumbai" project
GSM services launched;grabs highest (33.7%)
incremental market share in Q2FY09
6,000
7,000
8,000
ubsc
ribers
Mumbai project
NTT and Tata enter into strategic
partnership
10 million subs(Oct L h d
Launched "True Paid" mobile
service
4,000
5,000
6,000
000 s
u
Crossed 3 million CDMA
Crossed 5 million CDMA subs Crossed 8
million CDMA subs
(Oct 09)
Launched CDMA services
1 000
2,000
3,000
Crossed half a million wireline
subs
million CDMA subs
Tata and Virgin enterinto a JV
subs
Launched Non-Stop-
Oct-09
0
1,000
Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09
Mobile long validity product
2
Direct play in two of the most lucrative telecom circles in India
India
Maharashtra
(excl Mumbai) Mumbai
Population (mm) 1 1,167 101 20
Wireless subs (mm) 3 471.7 36.3 22.5
Per capita income (INR) 2 33,283 47,051 73,930
Wireline subs (mm) 3 37.3 3.1 2.9
Market subs growth (H1FY10 over H1FY09) 50% 45% 42%(H1FY10 over H1FY09)
TTML subs growth (H1FY10 over H1FY09) 62% 52%
Source: 1 MMRDA report (Population and Employment profile of Mumbai Metropolitan region), Wikipedia2 Economic Survey of Maharashtra 2008-09; 3 TRAI Subscriber Reports (as of Sep 2009)
3
Significant scale benefits by aligning with Tata Teleservices
Synergies in procurement Synergies in sales1 2
• Joint negotiation with suppliers and service providers delivering significant economy of scale benefits
• Common national billing architecture and joint sales approach towards large corporate customers
Common branding Infrastructure sharing3 4
Common backend IT and billing • Common backend IT and billing platform, serviced for both TTML and TTSL by Tata Consultancy Services (TCS)• TTML benefits from the nationwide
branding and marketing campaigns of TTSL
4
Investment highlights
11
Diversified business portfolio
11
Experienced
88 22Experienced management
team Strong market position
Multi-channel distribution
platform77
Expansive and state-of-the-art infrastructure
Strong brand positioning
Strong track record in
Revenue and EBITDA
33
55
EBITDA growth
66Focus on
innovation 44
55
5
Diversified business portfolio1
Product offerings Customer segments
Mobile Retail
M k tCDMADiversified revenue
base Mass market
Student
CDMA
GSM
Data / internet
base
- extensive suite of telecom services
- products/services
Rural market
High value
Executives
Data cards
WiFi
Broadband
products/services catering to specific target
consumer segments
Cross-selling
Youth
SMEs
Large Corporates
Fixed wireline services
Video-conferencing
A di f i
- ability to leverage customer relationships and
provide offering across product categories
- data and voice products Audio-conferencing
Leased line circuits
- data and voice products sold as combo / bundle
Comparatively de-risked business portfolio catering to many consumer segments through a wide array of products and services
6
Strong market position2
Reliance17.3%
Reliance21.0%
Incremental (Q2FY10)Wireline – market share End of period (as of Sep 09)
#1 private fixed line provider
TTML61.7%
Bharti20.9%
Bharti28.9%
TTML50.1%
#1 Rural Direct Exchange Line (DEL) provider(under DoT’s Universal Service Obligation Scheme)
Reliance18.3%
Ai l
MTNL4.3%
BSNL7.3%
Loop4.2%
Wireless – market share
#1 operator with incremental market share
Note: Among private operators
TTMLMTNL
BSNL6.0%
Bharti4.1%
Loop3.9%
Vodafone18.1%TTML
15.4%
Aircel0.8%
incremental market share
#1 fixed wireless operator
#1 PCO operator
TTML33.1%
Idea10.3%
Aircel5.6%
0.8%
Idea16.1%
Bharti15.5%
Revenue market share has increased steadily to 10.3% (Q1FY10)
Robust market position with a history of strong growthRobust market position with a history of strong growth
Note: TRAI, Sep 2009
Reliance21.6%
Vodafone14.5%
o us a e pos o a s o y o s o g g oo us a e pos o a s o y o s o g g o
7
Expansive infrastructure3
f h f d h f bTTML’s Fiber Network in Mumbai • State of the art infrastructure integrated with fiber, covering 1,600 kms and 20,000 buildings in Mumbai
• Supporting TTML’s “Broadband Anywhere, Anytime” vision for Digital Mumbai™
• Expansive network layout connecting key business and commercial locations
TTML s Fiber Network in Mumbai
5,643
4,000
5,000
6,000
commercial locations• Reliable network with 24x7 support
GSM launch
449 565 679 812 939 1,148 1,166 1,1751,319 1,538 1,757 2,059 2,367 2,681 2,703
0
1,000
2,000
3,000
Towns covered (EOP) Wireless cell sites (EOP)
Only congestion free network across Mumbai and MaharashtraAs per successive TRAI reports
#1
Unique competitive advantage through an extensive fiber network in the city of MumbaiUnique competitive advantage through an extensive fiber network in the city of Mumbai
p p
# 1 wireless service provider in terms of overall customer satisfaction across Mumbai and MaharashtraIndependent studies commissioned by the TRAI
#1
q p g g yq p g g y
8
Expansive infrastructure
Increased tower base on the back of strong Increased tower base on the back of strong Improved tenancy profile expected to reach Improved tenancy profile expected to reach
1 40
1.60
Ra
tio
Increased tower base on the back of strong growth in CDMA and GSM
Increased tower base on the back of strong growth in CDMA and GSM
Improved tenancy profile – expected to reach 2.0x by end of FY10
Improved tenancy profile – expected to reach 2.0x by end of FY10
2,000
2,500
ers
1.37 1.41 1.431.52
1.20
1.40
Occu
pa
ncy R
404 433 500 519
967 1,0591,329
1,636
0
500
1,000
1,500
No
of
tow
e
1.00Q3FY09 Q4FY09 Q1FY10 Q2FY10
• Significantly reduced time to market for GSM launch• Spectrum allocation in Sep 2008 and Nov 2008 in Mumbai and Maharashtra, to launch in Aug
2009 f th f t t t k ll t
0Q3FY09 Q4FY09 Q1FY10 Q2FY10
Ground based Roof top
2009 – one of the fastest network rollouts
• Minimal incremental capex for GSM through reuse of CDMA infrastructure• Reused 90% of CDMA sites• Initial rollout focused on revenue rich and population dense areas• Launch across major cities and National / State Highways across Mumbai & MaharashtraLaunch across major cities and National / State Highways across Mumbai & Maharashtra
• 3G ready GSM and CDMA networks permit reduced time to market for 3G (HSDPA and EVDO Rev-A) launch
• Tower business subsidiary provides monetisation options; financial closure achieved in Apr-09M t f th it ll t d ith fib lti i i d k t bilit• Most of the sites well-connected with fibre resulting in improved marketability
9
Strong brand positioning4
Support of strong sponsor brandsSupport of strong sponsor brands
• Well-known brand internationally
• Innovator and domain-leader in telecom space
• Leverage goodwill associated with Tata brand across many consumer sectors
• Leader in 3G technology
World class product / service brandsWorld class product / service brands
• Among the most admired telecom service brands
• Launched with a unique “pay-per-second” value proposition
• Express wireless broadband service
• Feature-rich wireless phone for home/office use and internet access
• Tailored and relevant service to growing youth segment
Top Service Brands in IndiaET Brand Equity Ratings 2009#7
Most admired telecom brandDrizzlin Survey, 2009#2
10
Innovative product offering5
PRODUCTSPRODUCTS
• Hi-Definition Video Conferencing-largest public room roll-out in India
Cisco TelePresence™
PRODUCTSPRODUCTS
• Fixed wireless phone with internet access
TATA WALKY
Photon+
• Ultra high speed broadband ethernet products (speeds up to 100 Mbps to the home)
Power Launcher
Wireless EPABX Gateway
• First datacard for wireless internet access
Plug2Surf (Photon Whiz)
• Express wireless broadband service (speeds of 3.1 Mbps)
SERVICESSERVICES
Pay per second billing model –
• Allows penetration into unwired buildings – patent filed
Non Stop Mobile (NSM)
Tata DoCoMo Dive-in
y p gfirst to offer the unique value proposition, along with TATA
DOCOMO launch
O t WAP t l
iChannel
GPRS li ti
Tariff Truepaid – first to offer full talk time
Non Stop Mobile (NSM) – pioneered long validity
tariffs
SMS Gateway
P t hi ith Mobile VAS
Focus on market defining products and services - creating a niche as an “innovator” and “d i l d ”
• Operator WAP portal –content rich design
• GPRS application –ticker updates on news, stocks, movies, business etc.
• Partnership with Netcore Inc. for Bulk SMS
“domain leader”
11
Strong track record in Revenue and EBITDA growth6
RRAGR k hAGR k h RevenuesRevenuesAGR market shareAGR market share
8.5%
9.6%10.3%
8 0%
9.0%
10.0%
11.0%
1,0971,423
1,7902,058
1,023 1,0631,0001,5002,0002,5003,000
INR
cr
CAGR (FY06–09): 23%
EBITDAEBITDAConsistent growth in revenues in-line with
7.0%
8.0%
Q1FY08 Q1FY09 Q1FY100
5001,000
FY06 FY07 FY08 FY09 H1FY09 H1FY10
I
revenues in-line with the ramp-up in subscriber base
Margin erosion in 303486
600
316 279
26.2%
11.4%
21.3%27.2%
28.9% 30.9%
100200300400500600700
EB
ITD
A
(IN
R c
r)
5 0%10.0%15.0%20.0%25.0%30.0%35.0%
Marg
in (
%)
CAGR(FY06–09): 69%
Capex / SalesCapex / Sales
grecent quarters on account of one-time GSM launch expenses
L i t t i 71%67%1,500 80%
es
125303 279
0100
FY06 FY07 FY08 FY09 H1FY09 H1FY100.0%5.0%
Large investment in establishing a robust network footprint
599 5711,208
807 758
71%55%40% 39%
0
500
1,000
FY06 FY07 FY08 FY09 H1FY10
Ca
pe
x
(IN
R c
r)
0%
20%
40%
60%
Ca
pe
x /
sa
le(%
)
12
FY06 FY07 FY08 FY09 H1FY10
Multi‐channel distribution platform7
Multi-channel distribution strategyMulti-channel distribution strategy
Owned / Franchisee Distributors RetailersPortalstores Distributors Retailers
c.685 branded stores exclusively retail only TTML products and
Portal
1st telecom operator in India to offer products
through ‘iChoose’ portal
Large network of c.1,000 distributors for selling the entire array
Extensive handset / starter pack distribution reach through presence TTML products and
services, occupying 0.2 million square feet of
prime retail space
through iChoose portal
Beta site for broadband customers just launched (www.digitalmumbai.in)
selling the entire array of products
reach through presence at over 30,000 multi-brand retail outlets
Recharge vouchers ( g ) gdistributed through more than 60,000
outlets
Among the largest branded telecom retail chain in Mumbai and MaharashtraAmong the largest branded telecom retail chain in Mumbai and Maharashtra
13
Experienced management team8
• B.Tech from IIT, Delhi; • B.E in Electronics from • MBA from University of , ;Masters and Doctorate in International Relations from Oxford University
• 14 years of experience within the Tata Group, including with Tata Sons at the Chairman’s office
• Honored by the World Dr. Mukund
G Rajan
IIT, Roorkee• Founding member of the
company heading the overall network responsibility
• 30 years telecom experience, including senior responsibilities at MTNL
Haridev KhoslaPresident
yStrathclyde
• 30 years of experience having worked with Microsoft, Bharti Airtel, Lucent / AT & T, Samsung and TTSL
Milesh RuparelPresident Corporate • Honored by the World
Economic Forum as a Young Global Leader in 2007
G RajanManaging Director
MTNLPresident –Network & Technology
President – Corporate, Marketing, SCM, HR &
Admin
• B.Sc, AICWA, FCA• 20 years of experience in
corporate finance having
• B.Tech (Anna Univ), MBA (BIM, Trichy), MS (Chicago)
• B.E in Electronics• 20 years of telecom
experience having worked corporate finance having worked with Idea Cellular, Madura Coats, Allergan India
S VenkatesanCFO
( g )• 14 years of experience
having worked with IDBI, Motorola, Tata Infotech
Shankar VaradarajanVP - PMO
experience having worked with Escorts Communications, LG Information and Communications and TTSL at various leadership positions
Raja SrinivasSVP –
Strategy & Special Special Projects
• B.E from IIT Kharagpur, MBA from IIM Ahmedabad
• 20 years of experience having worked with Asian Paints Mudra Reliance
• BE in Electronics & Communications
• 15 years of experience in marketing, sales, product / program / channel
• B.Sc. (Madras University)• 22 of experience in sales,
marketing and service functions in FMCG and telecom industriesPaints, Mudra, Reliance/ program / channel
management for IT & telecom companies
Ramesh IyerVP –
Enterprise business
Abdul KhanSVP – GSM Marketing
telecom industries
T N SrinivasanVP –
Customer Service
Ri h i i t l d ithi th T t G
14
Rich experience in telecom and within the Tata Group
Future Strategy
• Network coverage substantially completed; only capacity sites to be added
• Target customer churn from competitors as well as first time users
• MNP will aid subscriber migration
Wireless - CDMAWireless - CDMA Wireless - GSMWireless - GSM
• Business expected to generate strong cash flows
• Maximise spectrum utilisation
• Provide high quality voice and data biliti
MNP will aid subscriber migration
• Build the Tata DoCoMo brand
• Build 3G capabilities
• 3G-ready network
access capabilities
• Maintain market leadership across • Leverage the vast fibre optic network to
WirelineWireline Data businessData business
Mumbai and Maharashtra
• Offer range of services including leased lines, carrier business, conferencing facilities and toll-free services
offer a range of services, under TTML’s “Broadband Anywhere, Anytime” vision for Digital Mumbai™
• Develop the Wifi network in Mumbai to reduce last mile costs
Broaden customer base and offer diverse product offerings
• Focus on enterprise and high value segments
15
Thank You