Tulip Telecom Ltd Earlier Tulip IT Services Ltd DATA CONNECTIVITY – VEHICLE FOR GROWTH

Tulip Telecom LtdEarlier Tulip IT Services Ltd

DATA CONNECTIVITY – VEHICLE FOR GROWTH

DATA CONNECTIVITY – VEHICLE FOR GROWTH

Enterprise Data Connectivity || Network Integration || Data Centre || Managed Services360° Engagement

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Safe Harbour

Certain statements in this presentation may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, economic developments, technological risks, and many other factors that could cause the actual results to differ materially from those contemplated by the relevant forward-looking statements. Tulip Telecom Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

Certain statements in this presentation may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, economic developments, technological risks, and many other factors that could cause the actual results to differ materially from those contemplated by the relevant forward-looking statements. Tulip Telecom Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.


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Industry Accolades


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Operational Snapshot

Network reachNetwork reach Over 1,500 cities across almost every district in India

Over 1,500 cities across almost every district in India

Total customersTotal customers In excess of 1,600In excess of 1,600

Network OpsNetwork Ops 2 NOC’s supporting over 300 agents

2 NOC’s supporting over 300 agents

Sales & supportSales & support 12 sales offices160 support offices

12 sales offices160 support offices

Customers from all vertical segments including banking, telco, retail, manufacturing, services, education, healthcare, Utilities and government

India’s largest & fastest growing MPLS network

2,500+ employees across India with over 70% technical staff

MPLS NOCs in Delhi & Mumbai. Global managed service delivery centre in Delhi

Data CentresData Centres 44Tier 3/4 data centres in Delhi, Mumbai, Navi Mumbai & Bangalore. More tier 3/4 data centres under implementation


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Financial Snapshot

Market CapMarket Cap In excess of Rs. 25,000 millionIn excess of Rs. 25,000 million

Company profileCompany profile Telecom service providerand managed network services provider

Telecom service providerand managed network services provider

Net profitNet profit Rs. 2,505 million, up 34% over previous yearRs. 2,505 million, up 34% over previous year

RevenueRevenue Rs. 16,144 million, up ~33% over previous yearRs. 16,144 million, up ~33% over previous year

Listed on BSE & NSE. Included in BSE-500 and BSE-MIDCAP indices.

*financials are as of financial year ended March 2009.


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Our Understanding

• Last mile availability.

• Voice vs. Data.

• Single point for everything related to data.

• Niche players have an advantage of better service.

• Own fibre is not always an advantage.

• Last mile availability.

• Voice vs. Data.

• Single point for everything related to data.

• Niche players have an advantage of better service.

• Own fibre is not always an advantage.


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Our Business• Meet all telecom requirements of customers with

respect to data connectivity• Data connectivity (IPLC, DLC, MPLS VPN and Internet)• Managed Services - NI to support connectivity, Data

Centres, security and application management. Total IT outsourcing

• Value Added Services

• Why Tulip? Customers prefer specialized data companies that take complete responsibility to cover all aspects of data connectivity

• Meet all telecom requirements of customers with respect to data connectivity• Data connectivity (IPLC, DLC, MPLS VPN and Internet)• Managed Services - NI to support connectivity, Data

Centres, security and application management. Total IT outsourcing

• Value Added Services

• Why Tulip? Customers prefer specialized data companies that take complete responsibility to cover all aspects of data connectivity


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Customer Requirement

• Head offices and major branches of customers located in commercial / institutional clusters require high bandwidth from 2 MBPS to 155 MBPS

• Branches / outlets like bank branches need 64 KBPS to 512 KBPs in major cities and smallest of towns

• Dealers need low bandwidth between 16 KBPS to 256 KBPS

• Head offices and major branches of customers located in commercial / institutional clusters require high bandwidth from 2 MBPS to 155 MBPS

• Branches / outlets like bank branches need 64 KBPS to 512 KBPs in major cities and smallest of towns

• Dealers need low bandwidth between 16 KBPS to 256 KBPS

On On FibreFibre

OnOnWirelessWireless

70% 70% revenuerevenue

30% 30% revenuerevenue


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Tulip’s Network

• Country’s largest data Network reaching over 1,500 cities

• Large FibreFibre based Metro Ethernet network in 10 cities and growing

• All commercial buildings in major commercial

areas with fibre in basement or kerb side to cover 90% of high bandwidth subscribers

• Unlimited, Immediate connectivity on Fibre

• Most economical

• Country’s largest data Network reaching over 1,500 cities

• Large FibreFibre based Metro Ethernet network in 10 cities and growing

• All commercial buildings in major commercial

areas with fibre in basement or kerb side to cover 90% of high bandwidth subscribers

• Unlimited, Immediate connectivity on Fibre

• Most economical

NEW!


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MPLS/VPN and IPLC will continue to show high growth rates, while ATM/Frame relay will slowly phase out

Note: All values are in INR crores. Source: Frost & Sullivan

The data services market is estimated to be around Rs. 5,155 crore and is estimated to reach

Rs. 15,423 crore with a CAGR of 25.1%.

The large enterprises market contributes to around 69% of the market

The growth of data market is driven by MPLS/VPN market which is expected to have a market

share of nearly 50% in 2012-2013.

IPLC17%

DLC18%

ATM/Frame Relay2%

IP VPN/MPLS35%

Internet22%

VSAT6%


2303 Cr

3839 Cr

1106 Cr

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Enterprise Data Market

Enterprise Data Services

IPLC DLC MPLS/IP VPN

Internet

Mkt Share – 12.74%

Mkt 0 0 0 38% 0 0Share Current

Planned

Source:

Fibre Wireless

VSAT11% 8%19%

18%28%

13%46%

Addressable MktAddressable Mkt

18% to 18% to 89%, 1500 89%, 1500 Cr to Over Cr to Over 7500 Cr7500 Cr

957 Cr 1629 Cr

1536 Cr

8378 Cr

721 Cr


Enterprise data Market

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Company

Market Share(%) 09-10

Tata Comm(VSNL) 20.49BSNL 13.69Bharti Airtel 16.73R Comm 13.75

Tulip 11.34Others (HCL Comnet, Sify, MTNL etc) 24

BSNL39.29%

Tata Comm29.10

Tata Comm54.25%Bharti

17.77%

Reliance19.63%

Bharti20.40%Tata Comm

16.00% Reliance12.60%

Reliance12.46%

Bharti27.00%

BSNL 8.65%

Tulip 2.28%

Reliance14.89%

Tulip29.66%

Sify12.36%

Tata Comm8.65%

BSNL 11.54%


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Enterprise Data Market

Segment Value (Rs. crore)IPLC 957 Targeting bandwidth and not submarine cables yet.DLC 1,106 Deliver on Fibre and encourage transition to MPLSVPN 3,839 Currently mostly last mile wireless, now addressing with last mile on fibre

alsoInternet 1,629 We just address the premium high quality bandwidth on fibre to corporates.Addressable Data Market 7,531 Addressable market jumps from Rs 1,300 crore to Rs 7,531 Crore Addressable market jumps from Rs 1,300 crore to Rs 7,531 Crore

** Presently addressing only Rs. 1,500 crore market on wireless as we did not have last mile on fibre


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MPLS VPN Market Share Analysis

Company Share(%)

2008* 2009

Tulip Telecom 27.2 29.66

Sify 15 12.36

Reliance 17.5 14.89

Bharti 8.1 8.71

VSNL 7.1 8.65

BSNL 12.4 11.54

Others 12.7 14.19

Total 100 100

* % figures for the year 2008, were revised. Explanation for the same is carried in the following slides.


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Source - Voice & Data June 2009, V&D100 Issue

Network Integration positioning


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Customers include all major financial institutionsBanking, Financial Services and Insurance

Reliance Entertainment Mutual Fund


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Logistics

Enterprises

All telcos and major corporatesTelecom


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Lines of Business BreakupLine of Business EBIDTA

MarginStart % of business

Current % of business

Tgt % of business in 2 years

Network Integration 5-7% 100% 33% 15%

Enterprise Data Services 30-40% 0 67% 75%

Managed Services – DC, RIM, Security

30–40% 0 0 5%

Value Added Services 30–40% 0 0 5%


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Bandwidth Scenario in IndiaTelcos with

national FibreUtilities with National Fibre

Tulip with Pan India last mile in over 1,500

cities

Tulip leases last mile to these telcos


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Our InfrastructureDelivery

• 1,500+ certified engineers.• Robust alliances.• ISO 20000-1 & 27001 based processes.

Network • In excess of 1,500 cities.• 180 support centers.• More than 4,200 Points of Presence.• STM 16 based core backbone.• Redundant Multicarrier Network.• Metro Ether net based access network.• WiMAX & Advanced WiFi based wireless access

technologies.• IP NGN tested with major BTS players

•Data Centers• A potential capacity of 100,000 sq feet.• Only provider to have termination from all telcos.• Ready to use NGN head.


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High End Router

INTER-CITY CONNECTIVITY

MumbaiMumbai

ChennaiChennai

BangaloreBangalore

DelhiDelhi

Inter-City Primary Link

Inter-City Redundant Link

Inter-city bandwidth available aplenty. Can start at 2 MBPS and go upto GBPS. If demand justifies, lay own fibre where required.


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ChennaiChennai

BangaloreBangalore

DelhiDelhi

Multi-STM Primary Link

Multi-STM Backup Link

Mumbai

Connecting Mumbai


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Fiber / Point to point radios upto 45 MBPS capacity. Multiple radios possible, in licensed band.

Multi - STM Inter-city Backbone from Service

Providers

Each Base Station Radio has a

capacity of 4 MBPS Shared.

2. Supports upto 126 subscribers.

Inter-city bandwidth starts at 2 MBPS shared and can go upto multiple GBPS.

Range 2.5 KM

Tulip / SP / M

SO Fiber

Tulip / SP / MSO Fiber


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Inter City Network Design

Data Center

High Capacity Fiber

Point to Point Wireless

Central NOC in New DelhiRedundant NOC in Mumbai Regional NOC’s in all Class B citiesISDN RAS in all Class A & B Cities

MumbaiMumbai

DelhiDelhi

AA

BB

CC

DD

PunePune

AhmedabadAhmedabad ChennaiChennai

BangaloreBangalore

HyderabadHyderabad

KochiKochi

ChandigarhChandigarh

BhopalBhopalKolkataKolkata

LucknowLucknow

Rural network


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64 K to any bandwidth on wireless

Central site

Fibre / High speed radio

Typical NetworkDR Site


National Highways

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Network Management (NOC)

• Entire network managed from main NOCs in Delhi and Mumbai.

• New NOC in Delhi for managed services.

• 10 Regional NOCs in major regions.

• Every element manageable from anywhere.

• 24x7 Management Services

• Entire network managed from main NOCs in Delhi and Mumbai.

• New NOC in Delhi for managed services.

• 10 Regional NOCs in major regions.

• Every element manageable from anywhere.

• 24x7 Management Services


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Typical Contract

•Contract typically offers 25% uplift annually

•EBITDA margins rise with volumes

•Tax free revenue up to 10 years

ChargesCharges Fixed Cost ModelFixed Cost Model

• One time non-refundable Installation charge and Recurring yearly charge

• Assured revenues by way of recurring charges


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Data Centres

• Presently one in Delhi and two in Mumbai, one in Bangalore. Coming up in Hyderabad, Chennai, Pune and Kolkata.

• Tier 3/4 data centres.

• Data centres and NOC ISO 27001 certified.

• Premium customers like

• Strong self owned / long leased buildings.

• SP agnostic. Fiber from all SPs available already.

• IT Services Mgt systems Certified.

• Presently one in Delhi and two in Mumbai, one in Bangalore. Coming up in Hyderabad, Chennai, Pune and Kolkata.

• Tier 3/4 data centres.

• Data centres and NOC ISO 27001 certified.

• Premium customers like

• Strong self owned / long leased buildings.

• SP agnostic. Fiber from all SPs available already.

• IT Services Mgt systems Certified.


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Why Rural?• 70% population in rural areas.• Virgin territory. Wireless enables overcome generations of

technology gap.• Orders in thousands compared to hundreds in urban areas.• Low cost due to high volume.• Customers are Government, CSCs, Banks, Financial

inclusion, Educational, SEBs, Retail, Corporates. • Virgin territory for voice infrastructure.• Operate in un-licensed band. Low cost, no spectrum

constraint.

• 70% population in rural areas.• Virgin territory. Wireless enables overcome generations of

technology gap.• Orders in thousands compared to hundreds in urban areas.• Low cost due to high volume.• Customers are Government, CSCs, Banks, Financial

inclusion, Educational, SEBs, Retail, Corporates. • Virgin territory for voice infrastructure.• Operate in un-licensed band. Low cost, no spectrum

constraint.


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Conclusion

GREAT BUSINESS

MODEL

Extremely Profitable

Completely Scalable

More Services PossibleReducing

cost with volume

Recover investment in 2 Yrs

Strong Customer control


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Increase in Revenue

In Rs. Million

3,438.4

5,093.5

8,431.5

12,394.9

16,144.0

14,348.4

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

FY2005 FY2006 FY2007 FY2008 FY2009 9M FY2010


Healthy Change in Revenue Mix

2,061.9

3,264.3

4,266.8

5,252.65,589.4

4,643.0

12,286.2

157.8

814.9

3,155.3

6,575.1

11,439.8

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

FY2005 FY2006 FY2007 FY2008 FY2009 9M FY2010

Network Integration Corporate Network/Data Services

14%

38%

86%

29%

62%

95%

84%

46%

5%

16%

71%

54%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY2005 FY2006 FY2007 FY2008 FY2009 9M FY2010


In Rs. Million


Strong Annuity Income

974.8 1,045.8

761.1913.3

1,004.6

2375.1 2439.9

2926.0

3263.23417.4

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Q3 FY2009 Q4 FY2009 Q1 FY2010 Q2 FY2010 Q3 FY2010

Installations charges Recurring charges from clients

Revenue break-up – Data Connectivity Segment

In Rs. Million


Increasing Profitability

Profit after Tax

133.9

489.8

969.6

1,879.1

2,505.3

1,952.1

0

500

1000

1500

2000

2500

3000

FY2005 FY2006 FY2007 FY2008 FY2009 9M FY2010

7.45

28.4433.43

64.50

73.69

60.08

0

10

20

30

40

50

60

70

80

FY2005 FY2006 FY2007 FY2008 FY2009 9M FY2010

Earning Per Share (Rs.)

In Rs. Million


496.4

686.1

0

200

400

600

800

Q3 FY2009 Q3 FY2010

4,417.85,008.7

0

1,000

2,000

3,000

4,000

5,000

6,000

Q3 FY2009 Q3 FY2010

Revenue mix (%)

24.211.7

75.888.3

0

25

50

75

100

Q3 FY2009 Q3 FY2010


Q3 FY2010 Results SnapshotRevenues

In Rs. Million

13.4%

Profit after Tax

38.2%

EBIDTA

924.2

1,350.0

0

200

400

600

800

1000

1200

1400

Q3 FY2009 Q3 FY2010

46.1%

Thank You

Tulip Telecom Ltd

Documents

Tulip Telecom Ltd Earlier Tulip IT Services Ltd DATA CONNECTIVITY – VEHICLE FOR GROWTH