Post on 18-Mar-2020
Tata Tata
indicomindicom
Tata Teleservices (Maharashtra) LimitedTata Teleservices (Maharashtra) Limited
2
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
3
Over 50% of Group Revenues earned from outside IndiaOver 50% of Group Revenues earned from outside India
Largest Employer in the Private Sector with 250,000 Employees**Largest Employer in the Private Sector with 250,000 Employees**
FY 06-07 Revenues (est.)** of USD 27.1 Bn, Profits (est.) of USD 2.4 BnFY 06-07 Revenues (est.)** of USD 27.1 Bn, Profits (est.) of USD 2.4 Bn
Market Capitalization** of USD 54 Bn, Highest in IndiaMarket Capitalization** of USD 54 Bn, Highest in India
Only Indian Entity in Forbes’s list of World’s 20 Most Reputed CompaniesOnly Indian Entity in Forbes’s list of World’s 20 Most Reputed Companies
India’s Most Respected Multinational Business Conglomerate*India’s Most Respected Multinational Business Conglomerate*
India’s Largest Business GroupIndia’s Largest Business Group
The Tata Group The 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 market
capitalization, and 47,000 employees to the Group
11
22
33
44
55
66
77
4
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
Indian
Hotels
Tata Power
TitanTata Tea
Tata Chemicals
Voltas
Tata
Motors
Tata
Autocomp
Tata Steel
5
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
6
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
7
0
40
80
120
160
FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07
Fixed Mobile Broadband
Telecom Telecom –– The Story Thus FarThe Story Thus Far
Source: TRAI, COAI, AUSPI
Mn
Su
bscri
bers
National Telecom Policy ‘99 : Introduction of Revenue
Share
Entry of 3rd and 4th
GSM Operators
Unified Access Service Licences issued
“Calling Party Pays”Introduced
Micro Prepaid/ Long Validity Plans
launched
CDMA Limited Mobility
Entry
8
India outperforms ChinaIndia outperforms China
Source: Study paper on ‘Indicators for Telecom Growth Subscribers value are as at the end of the year (December).
9
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.
10
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
11
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 wireless
subscribers, 0.5Mn
wireline subscribers
0.2Mn broadband
subscribers
India’s fastest
growing DTH
operator
Serves majority of the
Top 1000 enterprise
customers in India
World’s 12th largest software
services company; software
vendor to world’s leading telcos
and telecom equipment
manufacturers
3200 seat BPO;
supports English,
Hindi and 9 Indian
languages
Global No.1
wholesale voice
provider
12
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
13
Fixed Wireless Phones
“Best Service in Emerging Markets” -
World Communication Awards 2005
Wireless Internet
TTL 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 Advantage The CDMA Advantage –– Innovative Products & ServicesInnovative Products & Services
RoadWarrior – Mobile VPN
Strong uptake from segments
such as BFSI, Retail and Lottery
PARSEC
Payphone +PoS
14
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 brand name in the Indian market
� Most new handsets being launched are RUIM based and BREW enabled
� TTL’s Instachange Card allows subscribers to change their handset while retaining 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 One Number T-SIM Card
Low End / Mass Market High EndMid End / Youth Market
15
TTL recently entered the Limca Book of Records by launching 100 exclusive outlets on a
single day
Wireless ServicesWireless ServicesDistribution ChannelDistribution Channel
� India’s largest branded telecom retail chain
� Over 3,300 exclusive outlets, occupying 0.6 Mn Sq Ft of prime retail space
� Extensive handset distribution reach through presence at over 60,000 multi-brand retail outlets
� Recharge vouchers distributed through more than 140,000 outlets
16
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
17
Telecom Operator’s Business LifecycleTelecom Operator’s Business Lifecycle
Phase 1
Setup
Phase 2
Growth mode
Phase 3
Maturity
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 wireless
operations
Once we get into matured mode, the business starts yielding recurring revenue
which impacts positively on the financials of the company
Once we get into matured mode, the business starts yielding recurring revenue
which impacts positively on the financials of the company
18
The Story So Far…The 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 CDMA
Wirelessoperations in Maharashtra
Launch of Prepaid Offerings
Sub Base crossed 1 million
Exited EBITDA Positive
Launch of Long Validity Products
Became 1000Cr Company
Exited Cash Positive
Sub Base Crossed 3 million
Robust growth in Financials
FY04Launch
FY04Launch
FY05120 towns
FY05120 towns
FY06222 towns
FY06222 towns
FY07410 towns
FY07410 towns
19
Advanced Network ArchitectureAdvanced Network Architecture
High “resilience” of network
architecture provides strong
platform for scalability
“Distributed network” design
optimizes transmission costs
Awarded for the best
performance in Key Network
Parameters
World Class network leads to robust and Reliable operationsWorld Class network leads to robust and Reliable operations
Switches
Pioneers in RF
New Technology RF
20
Reaching Out with a Strong BrandReaching Out with a Strong Brand
Touching lives at
every stageTouching lives at
every stage
Best in Class
Network
Infrastructure
Best in Class
Network
Infrastructure
Pioneers in
wireless home phones
Pioneers in
wireless home phones
Providing the
fastest wireless data services
Providing the
fastest wireless data services
21
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
22
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
EBITDAEBITDA33EBITDA 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
23
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
24
TTML Operations TTML 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
Q3F
Y05
Q4F
Y05
Q1F
Y06
Q2F
Y06
Q3F
Y06
Q4F
Y06
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
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
10.5%
11.2%11.3%
11.7%
12.1%
10.8%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
Q3F
Y05
Q4F
Y05
Q1F
Y06
Q2F
Y06
Q3F
Y06
Q4F
Y06
479
449
413
374
340
562
300
350
400
450
500
550
600
650
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
CAGR 89%
25
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
CAGR 52%
CAGR 89%
FY05 FY07
Sub Base(mn)
Market
TTML
26
Market Share
* Wireline & Data Products
Enterprise Enterprise –– Integrated PlayIntegrated Play
Mobile
Audio
Conferencing
Fixed Wired
Phone
Fixed Wireless
Phone
ADSL
High capacity
Leased LinesMobile
Shopping
SMS Based
Application
Wireless
Access
Office on
Mobile
V-Data
TTML
42%
Others
58%
27
TTML TTML -- Financials Financials (Q3 FY 06 (Q3 FY 06 –– Q4 FY 07)Q4 FY 07)
Consistent Financial PerformanceConsistent Financial Performance
Revenue EBITDA
EBITDA Margin PAT
307
324
340
367
389
289
250
270
290
310
330
350
370
390
410
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
40
5558
64
83
96
35
45
55
65
75
85
95
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
18% 18%19%
23%
25%
14%
12%
14%
16%
18%
20%
22%
24%
26%
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
(152)
(113)
(93)
(59)
(45)
(129)
(160)
(140)
(120)
(100)
(80)
(60)
(40)
(20)
-
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
28
694
1,234
817
600
700
800
900
1,000
1,100
1,200
1,300
FY05 FY06 FY07
Significant Investments for Significant 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
29
792
730678
635
582547
509482
441
885
700
610562
479449
415374
340
1,444
1,118
1,013
891
764738
650
561508
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
30
The Tata Group
The India Telecom Opportunity
Tata Group’s Telecom Leadership Play
Tata Teleservices (Maharashtra) Limited
Key Performance Indicators
What makes us Unique
Contents
31
Process Training & CertificationProcess Training & Certification
ISO Documented
Processes
Certification
Pro
cess
Au
dit
Tra
inin
g
In-trackIn-track
Employees
Out-trackOut-track
Outsourced& Partners
Quarterly Cycle
32
The RuralThe Rural--Urban MixUrban Mix
Urban Strategy
Branded Shops
Organized
Retail
Youth Focus
Corporate
Focus
Urban Strategy
Branded Shops
Organized
Retail
Youth Focus
Corporate
Focus
Rural Reach Strategy
Branded Van
Bullock Cart
Exploring untapped villages
Covering Sales of Mobile, FWPsand RCVs
Rural Reach Strategy
Branded Van
Bullock Cart
Exploring untapped villages
Covering Sales of Mobile, FWPsand RCVs
3,00015,000
62,000
109,000
200,000
682
-
50,000
100,000
150,000
200,000
Q3F
Y06
Q4F
Y06
Q1F
Y07
Q2F
Y07
Q3F
Y07
Q4F
Y07
Rural Subscribers
33
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
34
Differentiator Differentiator –– Bulls Eye ApproachBulls Eye Approach
Robust Growth
Rural
Enterprise
Operational Efficiency
Employee
Value toShareholders
35
TTML Key Business Parameters TTML Key Business Parameters Year 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 1 Year 2
EOP Subscriber Base (Mn) Revenue (Rs. Crs.)
Cash Profit (Rs. Crs.)EBITDA (Rs.Crs.)
Year 3
Year 3
Year 3
303303
36
Operational Turnaround HighlightsOperational Turnaround HighlightsMarket Share6th PositionMarket Share6th Position
EBITDA(Negative)
EBITDA(Negative)
Low in Customer Care & Network
Performance
Low in Customer Care & Network
Performance
Cost Per Sub1047
Cost Per Sub1047
AccumulatedLosses
AccumulatedLosses
Cash Profit(Negative)Cash Profit(Negative)
Revenue807CrRevenue
807Cr
PAT(Negative)
PAT(Negative)
Market Share3rd PositionMarket Share3rd Position
EBITDAPositive 8 Seq. quarters
EBITDAPositive 8 Seq. quarters
# 1 in Customer Care & Network
Performance
# 1 in Customer Care & Network
Performance
Cost Per Sub340
Cost Per Sub340
Cash ProfitPositive 5 Seq. quarters
Cash ProfitPositive 5 Seq. quarters
RevenueOver 1400Cr
RevenueOver 1400Cr
Last Entrant into
crowded market
PAT(Negative)
Improved 74%
PAT(Negative)
Improved 74%
37
…in Summary…in Summary
Most aggressive improvement
In Operational Efficiency
Most aggressive improvement
In Operational Efficiency
Increasing Market ShareIncreasing Market Share
Increasing Operating
Profits (EBITDA)
Increasing Operating
Profits (EBITDA)
Leveraging on People
Training & Certification
Leveraging on People
Training & Certification
Fastest Growing
Subscriber base (89% CAGR)
Fastest Growing
Subscriber base (89% CAGR)
Cro
ssed
th
e 3
mil
lio
n S
ub
scri
ber
Lan
dm
ark
Sig
nif
ican
t im
pro
ve
men
t in
re
ve
nu
e
EB
ITD
A p
osit
ive 8
qu
art
ers
in
a r
ow
EB
ITD
A o
ve
r R
s.3
00 C
r
Sig
nif
ican
t im
pro
ve
men
t in
Cash
Pro
fit
Sig
nif
ican
t im
pro
ve
men
t in
C
ost
eff
icie
nc
y
Sig
nif
ican
t im
pro
ve
men
t in
Pro
du
cti
vit
y
167% 130% 242% 624% 133% 135%
38
Thank You