Analyst Meet
Q4 & FY08 Results
Tata Teleservices (Maharashtra) Limited
27 May 2008
1
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.
2
Telecom Overview
Indian Telecom Scenario
World's fastest growing market: Addition of over 8 million subscribers
per month
The Wireless Teledensity is 23%
Half a billion subscribers expected by the year 2010
World's lowest voice tariffs and lowest priced handsets
Vision of 20 million Broadband subscribers by 2010 from the present
3.4 million broadband connections
Maharashtra
India
Mumbai
(excl. Mumbai)
Population
Population as
as on
on July
July 2007
2007 (Mln)
(Mln)
1129.8
1129.8
99.8
99.8
18
18
Wireless
Wireless Base
Base as
as on
on March
March 2008
2008 (Mln)
(Mln)
261
261
21
21
13.6
13.6
Wireless
Wireless Teledensity
Teledensity
23%
23%
21%
21%
76%
76%
Subscriber
Subscriber growth
growth (YoY)
(YoY)
57%
57%
65%
65%
38%
38%
Source: Department of Economics & Statistics, Tata Services Ltd. & TRAI Subscriber Report
3
Wireless
Product & Services
Postpaid
Mobile
Prepaid Walky
Postpaid
Walky
Pay Telephone
Booth
VData Cards
Fixed Wireline
Audio / Video
Conference
ADSL
1- 800 Toll
Free
Leased Line
Leased Line
Internet Port
Wireline
Prepaid Mobile
4
Distribution Channels
Exclusive Tata Indicom outlets
Multi-Branded Outlets (MBO)
5
TTML – The Story So Far…
FY 1996 - 2005
Acquired
Acquired Basic
Basic
provider
License
provider License
in
in Maharashtra
Maharashtra
(1996)
(1996)
Company
Company
crossed
crossed 100,000
100,000
Wireline
Wireline
subscriber
subscriber mark
mark
(2001)
(2001)
Launch
Launch of
of
Prepaid
Offerings
Prepaid Offerings
(2005)
(2005)
Hughes
Hughes Tele.com
Tele.com
formed
formed
(1997)
(1997)
Hughes
Hughes Tele.com
Tele.com
launched
launched TDMA
TDMA
Services
Services in
in
October
October
(1998)
(1998)
6
Commenced
Commenced
CDMA
CDMA
Wireless
Wireless
operations
operations in
in
Maharashtra
Maharashtra
(2003)
(2003)
Tatas
Tatas acquired
acquired
Hughes
Hughes Tele.com
Tele.com
and
and
Tata
Teleservices
Tata Teleservices
(Maharashtra)
(Maharashtra)
Ltd.
Ltd. was
was formed
formed
(2002)
(2002)
Sub
Sub Base
Base
crossed
crossed 11 million
million
(2005)
(2005)
Exited
Exited EBITDA
EBITDA
Positive
Positive
(2005)
(2005)
TTML – The Story So Far…
FY 2006 FY 2007 FY 2008
Tata Teleservices
(Maharashtra) Ltd
(222 Towns)
(410 Towns)
Became
Became
1000Cr
1000Cr
Company
Company
Sub
Sub Base
Base
Crossed
Crossed 33
million
million
EBITDA
EBITDA of
of
Rs.
Rs. 124.7Crs.
124.7Crs.
EBITDA
EBITDA of
of
Rs.
Rs. 303Crs.
303Crs.
Exited
Exited Cash
Cash
Positive
Positive
Cash
Cash Profit
Profit of
of
Rs.
Rs. 131Crs.
131Crs.
7
(565 Towns)
Sub Base
Crossed
5 Million
EBITDA
EBITDA of
of
Rs.
Rs. 486Crs.
486Crs.
Cash
Cash Profit
Profit
of
of Rs.
Rs.
315Crs.
315Crs.
FY08 Incremental Wireless Market Share
MTNL
3.3%
BSNL
8.2%
TTML
15.8%
Idea
16.7%
Airtel
18.2%
BPL
1.9%
Vodafone
20.4%
Reliance
15.6%
Source: TRAI Subscriber Report
8
FY08 EOP Wireless Market Share
BSNL
10.4%
TTML
13.5%
MTNL
5.6%
Airtel
19.0%
Idea
14.1%
BPL
3.7%
Reliance
16.4%
Vodafone
17.5%
Source: TRAI Subscriber Report
9
TTML EOP Wireless Revenue Market Share
(April 07 – Mar 08)
Idea
12%
Airtel
22%
BPL
5%
Vodafone
25%
BSNL
6%
Reliance
17%
MTNL
4%
* Wireline figures not removed for Reliance & Airtel
TTML
9%
Source: TRAI Revenue reports
10
Key Priorities
Optimize Costs & Enhance Margins
Build Indicom Brand
Enhance Network Coverage
Focus on Customer Service
11
Cost Optimization & Margin Enhancement
Improved monetization of assets – e.g.
sale of Towers
Reduced reliance on free on-net calling as
a subscriber acquisition tool, and close
monitoring of rate per minute; e.g.
withdrawal of the Go Super starter pack,
last year’s best selling product
Increased focus on Value Added Services
(VAS)
12
Marketing Campaign - Mumbai
Billboard at Andheri Lokhandwala (Size 40 x 20)
Billboards
13
Marketing Campaign - Mumbai
Traffic Pedestal at Kalanagar Bandra
Back-Lit Shelter
Juhu Centaur Hotel
Traffic Pedestals
Bus Shelters
14
Marketing Campaign - Mumbai
Bridge panel:Sukhsagar ET Size: 111 x 6.3
15
Marketing Campaign - Mumbai
Plug 2 Surf Wiz Creative On Hoarding
Haji Ali Junction MT Size: 40 x 60
16
Marketing Campaign – Rest Of Maharashtra
Kolhapur
17
Marketing Campaign – Rest Of Maharashtra
Mumbai – Pune Express Highway
18
TTML Fiber Backbone – March 2007
0
50
Kilometers
19
100
TTML Fiber Backbone – March 2008
TTML
TTML is
is the
the largest
largest private
private
Wireline
Wireline service
service provider
provider for
for
voice
voice and
and data
data in
in Mumbai
Mumbai and
and
Maharashtra
Maharashtra
20
Enhance Network Coverage
CAPEX spends of 850 Crs
without GSM outlay
Plan to increase wireless
coverage from 60% to 95% of
all census towns and 75% of
population
Key priority will be upgrading
Mumbai fiber network, which
supports over 2,50,000 bluechip
corporate and SME customers;
selective enhancement of fiber
network in major parts of
Maharashtra
Increased focus on enterprise
solutions and high bandwidth
applications
21
Focus on Customer Service
Improved customer segmentation, and
loyalty programs
Youth offering through the Virgin brand
Close attention to Churn control
New devices, and exchange offers
Creative use of IT tools, in partnership
with TCS
22
Key Priorities
Optimize Costs & Enhance Margins
Build Indicom Brand
Enhance Network Coverage
Focus on Customer Service
23
Financials
24
SCORECARD FY08 vs FY07
FY 07
FY 08
EOP
EOP Sub
Sub Base
Base (Nos.
(Nos. in
in million)
million)
3.07
3.07
5.08
5.08
Net
Net Additions
Additions (Nos.
(Nos. in
in million)
million)
1.2
1.2
2.0
2.0
Total
Total Revenue
Revenue (Rs.Crs.)
(Rs.Crs.)
1424
1424
1789.6
1789.6
EBITDA
EBITDA (Rs.Crs.)
(Rs.Crs.)
302.6
302.6
485.6
485.6
EBITDA
EBITDA Margin
Margin %
%
21%
21%
27%
27%
Cash
Cash Profit
Profit (Rs.Crs.)
(Rs.Crs.)
130.8
130.8
314.5
314.5
(310.6)
(310.6)
(125.7)
(125.7)
PAT
PAT (Rs.Crs.)
(Rs.Crs.)
25
TTML - Financials
Subscriber Base (Million)
Revenue (Rs. Crs)
1790
5.1
1424
1097
3.1
807
1.8
EBITDA (Rs. Crs)
Cash Profit (Rs. Crs)
315
486
303
26
FY 08
FY 07
-21
FY 06
FY 08
FY 07
FY 06
FY 05
-66
-210
FY 05
131
125
*
FY 08
FY 07
FY 06
FY 05
FY 08
FY 07
FY 06
FY 05
1.0
Yearly Comparison : Actual FY 07 Vs FY 08
Rs. Cr
Particulars
EOP ( In Lacs)
Net Sales/Income from Telecommunication services
Operating Costs
Network operations costs (Incl. Revenue Share)
Interconnect and other access costs
Payments to and provisions for employees
Administration and Customer Service expenses
Marketing and Sales promotion expenses (Net)
Total Cost
EBITDA
EBITDA Margin
Interest & Other Finance Charges
Cash Profit
Depreciation
Fringe Benefit Tax
Extraordinary items
Loss after Tax
27
FY-07
Actual
30.7
1,424
244
395
71
175
237
1,122
303
21%
172
131
446
1
(5)
(311)
FY-08
Actual
50.8
1,790
288
437
94
184
302
1,304
486
27%
171
315
439
1
(126)
Profit & Loss Statement : Quarterly 2007-08
Q1 08
Q2 08
Q3 08
Q4 08
Rs. Cr
FY 08
Gross Revenue
410
429
460
491
1,790
NW Operations Cost
Interconnect and other access costs
Employees cost
Administration and other expenses
Marketing and business promotion expenses *
61
104
23
48
73
69
107
23
42
82
75
110
23
47
76
83
116
24
48
70
288
437
94
184
302
Operating Expenses
309
323
331
341
1,304
EBITDA
100
107
128
150
486
Finance & Treasury Charges
25
51
42
53
171
Cash Profit
75
55
86
98
315
104
0.20
104
0.40
114
0.02
118
0.31
439
0.93
Particulars
Depreciation
Fringe Benefit Tax
PAT
(28)
** Includes
Includes Handset
Handset Subsidy:
Subsidy: Q4
Q4 average
average below
below Rs.
Rs. 500
500 per
per unit
unit
28
(49)
(27)
(21)
(126)
Balance Sheet – Debts & Assets
Gross Debt
= Rs. 2627 Crs. *
Net Debt
= Rs. 2592 Crs.
Gross Block (including Capital WIP) = Rs. 4650 Crs.**
* Including debt for GSM Spectrum fees of Rs. 393 Crs.
** Fully depreciated TDMA Assets retired during the year
29
Key parameters
Particulars
Units
For the Quarter Ended
Year Ended
Jun-07 Sep-07 Dec-07 Mar-08
FY-08
Wireless Services
Customers
Prepaid customers as a % of total customers
Wireless Subscribers Market Share
ARPU **
Avg. MOU per User
Rate per Minute
Postpaid Voluntary Churn
Postpaid Company Initiated Churn
Prepaid Churn
Non Voice Revenue as a % of Total Wireless Revenue
Nos. '000
3,170 3,794 4,333 4,683
%
82% 85% 86% 86%
%
12.7% 13.6% 13.9% 13.5%
Rs. per month 303
265
254
254
Minutes
395
356
313
302
Rs.
0.77 0.74 0.81 0.84
%
1.1% 0.8% 0.7% 1.1%
%
2.3% 2.3% 1.7% 1.4%
%
1.1% 1.1% 1.8% 2.2%
%
5.1% 5.1% 6.1% 7.2%
4,683
86%
13.5%
268
338
0.79
0.9%
1.9%
1.6%
6.0%
Wireline Services
Customers
ARPU
Nos. '000
308
333
363
396
Rs. per month 1,449 1,411 1,284 1,269
396
1,324
** Q4-08
Q4-08 ARPU
ARPU includes
includes Rs.
Rs. 17Crs.
17Crs. of
of USO
USO Subsidy
Subsidy received
received of
of previous
previous two
two quarters
quarters
30
Traffic, Coverage & Network details
Particulars
Units
Year Ended
FY-08
Wireless Services (in Mn Min)
Mn Min
Wireless Services
Census Towns
Population Coverage
Network Sites
Nos.
Nos. lacs
Nos.
287
602
1538
Passive Infrastructure Services (Owned)
Total Towers
Ground Based Towers
Roof Top Towers and Others
Optic Fibre Network
Nos.
Nos.
Nos.
Km
1172
373
799
6485
31
15,145
Thank You
32