DLI Business Scenario(AAPAC)

India

Subscriber Growth - 10 Years

*

* Data for 19 months (upto Oct ‘11)

Tele-density Growth - 10 Years

Tele-density Growth – analysis

Rural growth will drive future business

Subscriber additions / month - last 12 months

(In Mn)

Yearly Subscriber Additions

Subscriber Growth / year (Mn)

(Est.)

Tele-density geographical spread

Source : Telecom Live – December 2011, data as of October 31, 2011

Average Teledensity

324%

84%

64%

50%

Market Share %

Source : Telecom Live – December 11 ; data as of October 31, 11

Oct '10 Oct '11 % change Oct '10 Oct '11 % change

20.87 19.82 -1.1 9.07 9.76 0.7

17.03 16.90 -0.1 3.40 3.07 -0.3

16.84 16.65 -0.2 0 0 0.0

11.53 10.02 -1.5 3.5 4 0.5

11.45 11.09 -0.4 83.39 81.82 -1.6

10.85 11.62 0.8 0 0 0.0

6.78 6.88 0.1 0 0 0.0

1.96 3.69 1.7 0 0 0.0

1.02 1.60 0.6 0.11 0.13 0.0

0.80 0.69 -0.1 0 0 0.0

0.43 0.37 -0.1 0 0 0.0

0.26 0.40 0.1 0 0 0.0

0.162 0.13 0.0 0.51 0.58 0.1

0.01 0.18 0.2 0 0 0.0

OperatorsWireless Wireline

· India is the fastest growing Telecom market in the world• 750 million Telephones added in 10 years• Population of 1.2 billion – significant future growth potential

· Hyper-competition – 14 operators· Although India added 230 million subscribers in 2010 the revenue only grew

by 4%· Lowest tariffs in the world – ARPU currently at 2.2 USD / mth (tariffs have

started to increase lately)· 1 Lac Cr ($ 22 billion) invested on 3G and BWA license· Adoption (& availability) of 3G is slow· Cash flows are constrained – Capex on freeze· CAPEX reduced by almost 25% in 2011 over previous year· FDI in Telecom USD 1.7 b in FY 2011 Vs. USD 2.6 b in 2010· NTP 2012 is aimed at making M&A lax. Number of operators expected to

come down to 6 from 14

Current Telecom Scenario

· Telcos aiming to enhance network to provide 3G services to increase ARPU· Total number of Towers - 3,58,000

Only 10% are connected with Fiber At-least 15% (50K) additional towers will have to be connected on

fiber for reasonable 3G backhaul· Additional 100,000 telecom towers are required for 4G which must have

Fiber for high data rates· BWA Players are expected to roll out their 4G (LTE/WiMax) Networks in

2012 / 13 · The lead 4G player RIL (license in 22 Circles) will invest US $ 4.5 Billion in

next five years on BWA infrastructure

Current Telecom Scenario

The potential 3 G Impact

Operators 3 G Circle Licenses

Current connections

covered by 3 G License (%)

3 G Market 2011

3G Market 2014

Aircel 13 90 3 10Airtel 13 65 6 20BSNL 16 100 67 22Idea 11 77 3 11MTNL 2 100 10 2

Reliance 13 49 2 9STEL 3 100 0.2 1

Tata teleservices 9 48 3 11Vodafone 9 60 4 14

(in %)

Business Drivers - 2012-2014

FTTH

· BSNL has launched an initiative of providing FTTH connection to 800,000 homes in select towns.

· The Network Architecture is based on Dura-Line design and products.

· Dura-Line is playing an active role in the success of this initiative.· It is expected that this will trigger off large scale FTTH deployment in

the country with Private Sector Telecom Operators and Builders.· This will generate significant business for our MicroDuct products.

Business Drivers - 2012-2014

NOFN (National Optical Fiber Network )

· India's Department of Telecommunications has proposed setting up of a national optical fiber network at a cost of about INR200 billion (5,00,000 kms)

· The objective of the scheme is to extend the existing optical fiber network which is available up to district / block HQ’s level to the Gram Panchayat (village office)

· This network will help the government to achieve its target of broadband penetration of 160 million by 2014

Defense

· India's BSNL tendered for a 76.5 billion rupee ($1.65 billion) contract to build India's defense fiber network to a consortium led by Vindhya Telelinks

· The network, which will involve the deployment of around 57,000km of fiber across the country, will be used to serve the bulk of the communications requirements of the defense forces

Business Drivers - 2012-2014

NTP 2012 and its impact

· Provide ‘broadband on demand’ by 2015· Achieve target of 175 million broadband users by 2017 and 600

million by 2020· To promote R&D & product development in telecom· To make India a global hub for telecom equipment manufacturing· Increase rural tele-density from 35% to 60% by 2017 and to 100% by

2020· 80% of telecom networks to be domestically manufactured by 2020· Address the Right of Way issues in setting up of telecom

infrastructure· Relaxed M&A norms to allow consolidation

Industry analysis - Bharti Airtel

· Market share has shrunk to 21.73 % (191 Mn subscribers ) from 25% in 2009

· Invested Rs. 156 billion ($ 3.5 billion) on 3G license in 13 circles (68% of annual Revenue)

· Acquired Zain Africa (16 countries for $ 11 billion) · Focus is on Africa because of poor fiber network and high potential

(ARPU 7.3 $)· Domestic fiber network now at 1,13,000 Km· Launching BOT Model for Fiber Networks· Bharti's EBITDA is down by 20% on account of low tariff· Increased call rates first time in the history

Industry analysis - Vodafone Essar

· Under severe financial stress due to cash commitments on 3G auction (acquired at $ 116.2 Mn) and also impending tax Liability case ($ 2.5 billion)

· Network rollouts are all time low at 4000 Km in FY 10, continues to be subdued in FY 11

· Hiked tariff by 20% in 12 circles to improve ARPU’s

Industry analysis - Idea Cellular

· Won 3G license for 11 circles (81% of its revenue) · The third largest mobile services provider in revenue terms· Leads the Indian market in MNP conversion with net gain of nearly

825,000 customers as on 30th June, 2011· Revenue share has gone up from 9.7% to 12% in FY 2010· Entered into a roaming agreement with Airtel & Vodafone for 3G· Total Fiber optic network is 42,000 Rkm of which 50% is swapped· Roll-outs are limited to 3G circles only

Industry analysis - Aircel

· Fastest growing operator with 9% market share in a span of two years

· Aircel has close to 60 million customers and 2G spectrum licenses to operate in 22 circles across India

· Won 3G auction in 13 circles· Actively focused on IP Networks as voice is commoditized· Revenues of Rs 5600 crore in 2010 - net loss of Rs 260 cr· The company is likely to have total debt of close to Rs 17,000 crore

this year· Company is going through a severe financial crisis – close to

defaulting loan servicing· RIL is considering an acquisition of Aircel

Industry analysis - Reliance Infotel

· RIL Infotel won Pan India (22 Circles) BWA spectrum (2X20MHz) for providing Wi-Max / LTE services

· In a 4G connection a download speed of 80 Mbps and upload speed of 20 Mbps is possible

· This will require intercity BTS tower connectivity on fiber besides a national fiber optic backbone

· Seriously considering acquisition of an existing company to get fiber network

· Reliance has in-house duct manufacturing

OPEX of different operators

Capex - Telcos

India 2012 Business Strategy

· Utility Corridors - FiberWays· HTMS – turnkey· Gas Pipeline – telecom networks· Railway Freight Corridor· AT Services· Airfield Lighting Services – turnkey· Turnkey FTTH Solutions

Enhancement of Enterprise & Value Added Services Business

Indian Business Diversification –Telcos Vs Enterprise Business

20122011

Mid-East, SEA and Pacific

Kuwait MOC FTTH projectKOC Gas Pipeline

Qatar QNBN FTTH initiative

KSASTC FTTH program

Iraq, Basrah500 MT Duratrac

UAEDu Fiber Network

Egypt FTTH Project

Middle East

BangladeshSummit – FTTH project

WASA, (1000 MT potential)Dredging Project (350 MT)

NepalNTC – 2000 kms Fiber

NetworkNCell – 1000 kms Fiber

NetworkADB Funded pipeline project

(500 MT potential)

BhutanPipeline project (500 MT

potential)

Sri Lanka

Dailog

China Harbour

SAARC

SEA & Pacific

• UFB $ 1.35 billion initiative launched by Govt.• Chorus (70% share)• Wel Networks• Enable• North power

• Ericsson and Huawei – awarded contracts• Aiming to sign GPA with both• Significant potential for FuturePath for next 5 years

New Zeala

nd

SEA & Pacific

• Govt. initiated NBN initiative to provide 85% of population on 100 Mbps connectivity

• Network roll-out yet to commence• Dura-Line is working closely with Pipe Networks

(Dark Fiber company, 4th largest network in Australia)

• Mining sector is another key potential area

Australia

SEA & Pacific

• TM’s HSBB initiative of US$ 1.2bn to connect 30% of 30mn population on fiber

• Ist phase 1.3mn to be done through 2013• Roll outs to start by Feb 2012• Dura-Line first and only company to be technically approved

with TM• SIRIM (technical approval agency for TM): standardized Dura-

Line testing facilities and has requested to use facilities for testing samples of other manufacturers

Malaysia

• San-Miguel (beverage conglomerate) is getting into Telecom Services

• San-Miguel plans 5000km of backbone project to commence in 2012

• Dura-Line is aggressively pursuing business in this market through a local partner

Philippines

SEA & Pacific

• Telkom planning FTTH roll-out to connect 50000 homes between 2012-13

• Primacom having a project 900km, scheduled to be finalized by Feb 2012

• Partnership established with Corning Fiber licensee • Strong relations with NSN

Indonesia

• Strongly positioned in the Oil Pipeline segment• Limited requirements in Telcos as 80% of installation is

aerial and without ducting• Dura-Line has implemented & working on major oil

pipeline projects like • PTT 4th pipeline project.• Zawatika pipeline project

Thailand

AFRICA

· Nigeria: SAT3/WASC/SAFE; MAIN ONE; GLO1; WACS; ACE· DRC: WACS, ACE· Congo B: WACS, ACE· Uganda: SEACOM· Ghana: SAT3/WASC/SAFE; MAIN ONE; GLO1; WACS· Kenya: TEAMs; SEACOM; EASSY· Gabon: SAT3/WASC/SAFE; MAIN ONE; ACE· Angola: MAIN ONE; WACS; SAT3/WASC/SAFE· Namibia: ACE· Cameroon: SAT3/WASC/SAFE; WACS; ACE

Hub of Major Activity – Under Sea Cable Landing

Focus Countries

in Africa

Airtel

Non-Airtel

Business Potential Airtel & RoA (2012-13) - 15,000 Kms

Strategy – Africa

· Establish local manufacturing facility to maintain market share & acquire new businesses:South Africa &COMMESA

· Establish Pan-Africa relationship with Vodacom, MTN, Tigo

· Long Term partnership with Huawei – emerging as major Network Roll-out Contractor pan Africa

Summary

Salient differentiators

· Product Innovator• 40/34.2 duct• TornadoPlus• iDuct• DuraSure

· Cable Blowing / Turnkey Services· FTTH Design and Deployment Services

• MicroTrenching· AT comprehensive services· Dura-Line Plumettaz Fiber Academy

Significant customer relationships

· Dartcom/DFA - Dominant (near exclusive)· ALU - Global Purchase agreement in place· NSN - Preferred Vendor status for SEA· Ericsson - Global Purchase Agreement in process· Huawei - Purchase agreement in process for Oceania - On approved vendor list in Bangladesh & Iraq· TM - Preferred vendor, only vendor technically

approved · Airtel, IDEA, Tata - 80 to 90% market share· Aircel - Exclusive partner· Vodafone - Dominant share - India, South Africa & Tanzania · South Africa - Dominant market share of MicroDuct business· Airtel Africa - Exclusive partner

Indian Business Diversification –Telcos Vs Enterprise Business

20122011

2011 2012

Geography Diversification –Domestic Telecom Vs Exports

2012 Estimate – Telecom & Enterprise Business Mix

South Africa43%

Rest of Africa24%

MENA

16%

SEA &

SAARC12%

OCEANIA6%

2012 Estimate Country Mix - Exports

MENA8% SEA

2% SAARC2%

Aus-NZL8%

South Africa69%

Rest of Africa11%

SALES EBITDA

2012 Estimate Product Mix - Exports

Std. Ducts31%

Micro Tech.51%

DWC13%

Fluid Pipes4%

Acces.1% Standard Ducts

11%

Micro Technology84%

DWC3%

Fluid Pipes0%

Accessories2%

SALES EBITDA

Dura-Line