RCOM Investor Ppt March2011

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    Reliance Communications

    March, 2011

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    Reliance Communications an integrated telco

    Wireless

    Global Enter rise

    Home

    ey a eaways

    Confidential 3 of 39

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    Reliance Communications

    FY 2011

    FY 2009 & FY 2010.

    3G

    CDMA & GSM ServicesFY 2007 & FY 2008

    o e

    NGN

    WorldsLargest N/W

    Mobile

    Enterprise

    2L slots Deepest backhaul

    MobileInfratel

    IntegrationGrowthFoundation

    EnterpriseIPTV

    Confidential 4 of 39

    Evolution path towards a profitable integrated Telco

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    Reliance Communications

    #2 in India, #4 globally (single country), dual technologyWireless

    Globalcom Largest global private submarine cable network, blue-chip

    global clients

    Enterprise

    One stop shop for all large corporates and SMBs forcommunications, networking and IT infrastructure needs

    Infratel 200k+ slots, unique ability to provide space and connectivity

    Home Rapidly growing national DTH business, rich content access

    Confidential 5 of 39

    Strong market presence in every business

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    Reliance Communications

    Address mass mobility market thru GSM with special focus on rural distribution

    less

    Increased revenue from new service streams (share of VAS & In-roaming revenue)

    Maximize revenues from existing assets of Towers, OFC & Ducts

    Wir

    tel

    Huge potential of value unlocking for Reliance Communication shareholders

    Sign long term contracts with existing and new operators to provide pan-India infrastructureUSA

    CanadaGermany

    Italy

    London

    Saudi Arabia

    Austria

    Japan

    RussiaSpain

    Belgium

    France

    Switzerlandd

    Netherland

    USA

    CanadaGermany

    UK

    Austria

    Russia

    Belgium

    France Switzerland

    Netherland

    com

    Infr

    Infratel

    Ramp up Managed Services business; Complete NGN Mediterranean and continue tomaintain leadership in the Carriers Carrier market

    Australia

    Pakistan

    Sri Lanka

    China

    Hong Kong

    Bangladesh

    Nigeria

    South Africa

    South KoreaNew Zealand

    UAEBahrain

    Qatar

    Oman

    Taiwan

    MalaysiaSudan

    Australia

    Pakistan

    Sri Lanka

    China

    Hong KongBangladesh

    Nigeria

    South Africa

    Italy

    South Korea

    NewZealand

    UAESaudi Arabia

    Bahrain

    Qatar

    Oman

    Japan

    Taiwan

    Malaysia

    Spain

    Sudan

    India

    Globa

    l

    ise

    Expanding Managed Services portfolio for higher share of customers wallet and to increasestickiness of our products

    Aggressive acquisitions to build the subscriber base for long-term revenue

    En

    terp

    r

    Confidential 6 of 39

    Rigorous program management framework for capex and opex cost efficiencies, esp. Set-top box and ContentH

    om

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    Reliance Communications

    Margins 31.5% 31.9% 33.3%32.4%

    Network expenses

    - Decrease in network cost due to

    savings in Power & Fuel,

    Consumption of stores & spares and25.6% 27.0% 25.0%80%

    90%

    100%

    ma ntenance

    SG&A expenses

    - Increase in SG&A due to increased16.5% 14.8% 15.7%

    .

    50%

    60%

    70%

    lRevenue

    Advertising, Sales & Marketing

    expenses

    Staff cost6.7%

    6.9% 7.0% 7.1%

    .

    20%

    30%

    40%

    %o

    fTot

    Access charges & LF17.6% . . .

    0%

    10%

    4Q FY10 1Q FY11 2Q FY11 3Q FY11

    Confidential 8 of 39

    inspite of launch of multiple new businesses

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    Reliance Communications an integrated telco

    Wireless

    Global Enterprise

    Home

    Confidential 9 of 39

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    Wireless Business

    India, the worlds fastest growing & second biggest mobile market,

    has fifteen telecom service providers.

    ,

    4.4%2323

    747Reliance

    18%Aircel

    7%

    MTNL1%

    MTS1%

    2019 20

    1617

    1817

    1817

    19

    500Tata

    Idea12%

    1819

    v09

    c09

    n10

    b10

    ar

    10

    pr

    10

    y10

    n10

    ul10

    g10

    p10

    ct10

    v10

    c10

    21%

    Vodafone17%

    BSNL11%

    12%

    747 Mn wireless subscribers at the end of December 2010

    RCOM (126 Mn)

    N D J F M A

    MJ J A S O N D

    Confidential 10 of 39

    RCOM has 18% of the CMS and adds around 2.8mn customers every month

    Achieved landmark of 125mn customers last quarter

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    In i n l m : F h n in l n

    Wireless Business

    Operators

    Hyper competition - Number of players increased from 7 to 15 in last one year

    Price Wars

    Multiple product offerings with innovation on price and tariff cuts only

    Call Rates

    Confidential 11 of 39

    2007 2010Intense Price cuts reduced the call rate from Rs.2/- in 2007 to just 1p in 2010

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    Wireless Business

    Dual technology advantage1

    Data leader (HSD / EVDO)2

    125 Million+ customer base3

    3G License winner in 13 circles

    (All 900 Mhz circles covered)4

    Integrated Telco with segmented play5

    Confidential 12 of 39

    All this with only 7 years of existence in industry as compared to 15+ years

    for competition

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    Wireless Business

    -

    Won 13 circles with a spend of Rs.

    8,585cr

    Geographical mix of top 3 metros, 4

    B circles & 6 C circles

    Marginal capex for 3G upgrade on our

    EDGE GSM network

    rc es

    2G + 3G Circles

    Delhi & Mumbai

    Confidential 13 of 39

    Nationwide EVDO/ 3G footprint

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    Wireless Business

    3G services kick off in 3 key metros of Mumbai, Delhi & Kolkata and city of

    Chandigarh on 13th December, 2010

    Currently, 3G services are available in 25 cities and soon will be available in 140

    cities

    Confidential 14 of 39

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    Wireless Business

    choice and value proposition across.

    Coverage Customer choice1. 2.

    HSD/Internet on the move Product & Service innovations3. 4.

    5.

    Confidential 15 of 39

    Unmatched customer proposition

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    Wireless Business

    24,000 Towns

    600,000 Villages

    Voice Data VAS

    CDMA GSM

    Confidential 16 of 39

    Seamless coverage wherever you go

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    Wireless Business

    Mobile Handheld Dongles

    Voice

    CDMA GSM

    Video

    Confidential 17 of 39

    Wide options for Voice, Data & Video across CDMA & GSM platforms

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    Wireless Business

    Competitive differentiation

    Fastest internet broadband service in Indias top 500+

    cities

    Seamless handover & connectivity through CDMA 1X

    of the Indian population

    Wide reach compared to limited reach of wireline

    networks

    Broadband coverage expansion the wireless way

    ARPUs are 3-4 times higher than the voice usage

    Increased capacity utilization in CDMA network

    Easy availability & instant activation within minutes

    compared to few weeks or even months in case of

    wired broadband

    Confidential 18 of 39

    Fastest internet connectivity under wireless platform

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    Wireless Business

    Group Talk Simply MusicTune Maker Nokia Life Tools

    Bubbly (voice twitter)

    WAP PortalApp Store Location Based Services

    Confidential 19 of 39

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    Wireless Business

    World-class design , fit out & ambience at

    ,

    streets/Malls

    High quality reach & national footprint

    through 5,000 distributors & 1.2 million

    retailers

    ,

    force to cater to customers at their

    premises

    Dimensioned to handle over 35 mn salestransactions annually

    Confidential 20 of 39

    One of the largest retail distribution network in the industry

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    Wireless Business

    Revenue (Rs. Mn) EBITDA (Rs. Mn)

    11,815 11,989 12,101 11,792

    4 000

    8,000

    12,000

    40,900 , , 40,644

    20,000

    40,000

    0

    4QFY10 1QFY11 2QFY11 3QFY11

    0

    4QFY10 1QFY11 2QFY11 3QFY11

    EBITDA Margin

    28.9% 28.9% 29.0%40%

    60%

    80%

    .

    0%

    20%

    4QFY10 1QFY11 2QFY11 3QFY11

    Confidential 21 of 39

    Short term impact due to competitive intensity and portfolio rebalancing

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    Wireless Business

    2Q10 3Q10 4Q10 1Q'11 2Q'11 3Q11

    Changeover last 6 Qtrs.

    Player 1 0.56 0.52 0.47 0.45 0.44 0.44 -21.4%

    Player 2 0.56 0.51 0.47 0.44 0.42 0.42 -25.0%

    RCOM 0.47 0.45 0.44 0.44 0.44 0.44 -6.4%

    0.55

    0.60Revenue Per Minute (Rs.)

    0.45

    0.50

    0.40

    2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11

    RCOM Player 1 Player 2

    Confidential 22 of 39

    RCOM, the only operator which has held on to the RPM over last 4 quarters

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    Reliance Communications an integrated telco

    Wireless

    Global Enterprise

    Home

    Confidential 23 of 39

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    Global Enterprise Business

    Carrier Enter rise Consumer

    Global Enterprise Business

    Leading Enterprise servicesprovider in India

    Among the Top 6 Leader-board of

    Among Top 15 largestinternational long distance

    carriers with over 14 billion

    Offer virtualinternational calling

    services to retailcustomers for calls to

    Among Top 11 Managed Servicesproviders in the U.S. and Europe

    Amongst Top 10 Data Centers in

    Worlds largest privatesubmarine cable system ownerand capacity provider

    Leadin NLD Infrastructure

    200 internationaldestinations

    2.5 million retailcustomers in 14

    provider in Indiacountr es

    Confidential 24 of 39

    Scalable and proven infrastructure and capabilities are in place

    to enable the next phase of growth

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    Global Enterprise Business

    Infrastructure Geared for exponential growth of application and content traffic1

    2

    3

    CustomersDiverse base includes the largest data users in developed andemerging markets

    Products & Services Complete suite of products to capture growth across the value chain

    4 Organisation Multicultural, close to customer, strong on-the-ground presence

    5 Financials Profitable growth momentum and strong cash generation

    Confidential 25 of 39

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    N w rk r h

    Global Enterprise Business

    Own 277,000 RKms of optic fiber cable with landing points in 30 countries & worlds largest private underseacable system spanning 65,000 Kilometers

    Manage over 60,000 customer sites in 163 countries through 700 carrier partners

    This cable system is seamlessly integrated with 1,90,000 kilometer of fiber optic in India connecting 600,000

    villages & 24,000 towns to key business markets in India, USA, Europe, Middle East, and APAC regions

    Over 1000 direct interconnects with 450+ top networks

    Confidential 26 of 39

    Network connecting over 85% of the worlds population

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    Global Enterprise Business

    Nine data centres with level 3+ accreditation

    more than 450 000 s ft of facilities s ace

    Geographic redundancy

    Wide & com lex a lication hosted

    Core Banking, ATM/ Internet Banking

    Complex ERP/ SAP Applications

    .

    Large Messaging Applications

    Confidential 27 of 39

    Expanding capacity to cater to fast growing demand

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    Global Enterprise Business

    Over 200 wholesale customers based on strong long term relationships with

    Particularly strong in China, Asia, the Middle East and India.

    Carrier

    Enterprise

    corporate customers

    Among Top 6 Global Ethernet Service providers with over 1,200 customers;

    , ,NASDAQ.

    Serve 850 of top 1000 enterprises in India

    Retail Over 2.5 million customers for our Reliance Global Call service in 14 countries

    - U.S., Canada, U.K., Australia, New Zealand, Hong Kong, Singapore, France,Spain, Belgium, Netherlands, Austria, Ireland and India

    Confidential 28 of 39

    Wide customer base in Enterprise and Carrier segments

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    Global Enterprise Business

    Voice

    Landlinere aid and

    Wireless

    Mobile

    EnterpriseData

    MPLS VPN

    NLD/ILD

    RelianceIndia Call

    IDC

    Hosting

    Collaboration

    VideoConferencin

    BroadbandInternet

    postpaid

    E1PRI

    SmartOfficeCentrex

    FixedWireless

    R World, R

    LL, ELL

    ManagedServices

    IPLC

    Intl Voice

    Storage &HA services

    Security

    Data/Webconferencing

    postpaid BBfor homes

    EnterpriseInternet Voice

    Networking

    Call CenterSolutions

    Audio conf

    CNM

    WDVPN

    BPOs

    Intl MPLSVPN

    Professionalservices

    ASP,

    Internet forContenthosters

    1 800 TollFreeServices

    Intl TollFree

    Confidential 29 of 39

    One Stop Shop to Meet Enterprise Needs

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    Global Business

    25,000

    Revenue (Rs. Mn) EBITDA (Rs. Mn)

    3,5553,317 3,393

    3,966

    2,000

    4,000

    20,27818,137 18,391

    19,233

    10,000

    15,000

    20,000

    0

    4QFY10 1QFY11 2QFY11 3QFY11

    0

    5,000

    4QFY10 1QFY11 2QFY11 3QFY11

    EBITDA Margin

    20%

    30%

    40%

    17.5%18.3%

    18.4%

    20.6%

    0%

    10%

    4QFY10 1QFY11 2QFY11 3QFY11

    Confidential 30 of 39

    Improved business performance with Global recovery

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    Enterprise Business: Domestic

    3,0008,000

    Revenue (Rs. Mn) EBITDA (Rs. Mn)

    , , ,2,267

    1,000

    2,000

    , , ,6,184

    4,000

    6,000

    0

    4QFY10 1QFY11 2QFY11 3QFY11

    0

    ,

    4QFY10 1QFY11 2QFY11 3QFY11

    EBITDA Margin

    37.2% 36.6% 37.5% 36.7%40%

    60%

    0%

    20%

    4QFY10 1QFY11 2QFY11 3QFY11

    Confidential 31 of 39

    Short term impact due to pricing pressure in the market

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    Reliance Communications an integrated telco

    Wireless

    Global Enterprise

    Home

    Confidential 32 of 39

    H B i

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    Home Business

    Source : Industr Estimates

    Confidential 33 of 39

    DTH penetration at ~20%% of TV homes; gaining momentum

    H B i

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    Home Business

    Pioneering HD experience in India

    Pioneering DVR Watch when you

    want Key service differentiators

    More channel choice

    Pure Digital viewing

    32 Cinema channels Easy program guide

    Quick channel select

    Interactive applications (iNews, iGames,r c e , oo ng, e c

    Superior MPEG 4 technology

    Confidential 34 of 39

    Digital viewing experience will create revolution in TV entertainment platforms

    H B i

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    Home Business

    BroadcastTV and Radio EPG / Mini EPG Mosaic Portal

    Information News Stock

    Entertainment

    Advertisments

    Game VoD / MoD / PVR Karaoke / Photo Album

    Interactive Promotion Dedicated Advertiser Location

    Messaging

    SMS / MMS Mail Polling / Voting

    Commerce Shopping / Banking

    Confidential 35 of 39

    Public Service T - Government / T - Learning

    H B i

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    Home Business

    Reach and service

    Content

    250+ channels

    20+ exclusive movie channelsin English, Hindi and other

    6,500 towns

    2,000+ exclusive Relianceretail stores

    reg ona anguages

    Interactive features Games,News, Cricket, Stocks,

    Astrology, Cooking

    24x7, 11 languagecustomer service

    Experience

    High-definition channels

    Technology

    MPEG 4

    Digital Picture

    Digital Sound

    High-definition DVR box

    Next generation easy-to-use guide

    Confidential 36 of 39

    Most advanced mini guide

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    Reliance Communications an integrated telco

    Wireless

    Global Enterprise

    Home

    Confidential 37 of 39

    Looking ahead

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    Looking ahead

    Drivers Impact

    Increase revenue

    generating ability

    Financials at inflection point as GSM and 3Gmomentum scales up

    RCOM not only reliant on wireless business forarge p pe ne o

    untapped business tosupport growth

    uture growt ; mass ve opportun ty n newersegments including DTH and expansion ofEnterprise/IDC

    Operationalleverage improves margin &

    profitability

    o en a or un oc ng s are o er va ue asubsidiary level (Infratel, Globalcom, DTH)

    Peak investment phase is over

    Potential of unlockingshareholders value

    Acquisition of DigiCable creates leadership positionin Indian Pay TV market

    Confidential 38 of 39

    Further integration of Telecom, Media and IT will be levers of future growth

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    Thank ou