1 st Latin American Conference Integration of Markets

Transcription

1 1 st Latin American Conference Integration of Markets Santiago, Chile Host by Corpgroup Corredores de Bolsa and Que Pasa. 1-2 December, 2010

2 _our essence A new brand image to project closeness and modernity, forging a solid link with our customers in the long term.

3 Table of contents Industry Size and Competitive Environment Company Overview Business Segments Financial Overview 3

4 Chilean telecom market: Mobile Services Leading sector Chilean Telecom Market (Year 2009 Estimates) IT Outsourcing Services 5% IT Services Others 6% Mobile¹ 108% Subscription: 0,12 US$/ min Prepaid: 0,12 US$/ min Local 11% Local¹ 21% 0,02 US$/ min Pay TV 9% Mobile 54% Internet² 37% Broadband: US$/ month Internet 8% Datacomm 4% Source: Entel estimates Long Distance 3% Pay TV² 38% Básic: 41 US$/ month Telecom Market Size (Revenues) = US$ 6.9 bn (*) Long Distance N.A. DLD: 0,11 US$/ min ILD: 0,29 US$/ min IT Services Others: includes HW, SW Deploy and Support, Integration and Development, Education and Training and Consulting. (*) Exchange rate as of June 2010 $ % over population 2 % over homes 4

5 Company Overview 5

6 Entel is the largest telecom company listed in Chile Entel Overview Leading competitive position in main markets in which it participates, based on quality services, technology and innovation. Wide range of integrated telecom services and solid execution. Convergence of fixed & mobile services. Focus on reliable service and customer oriented Telecom Market Share VTR, 11% Telefonica, 20% Entel Wireline, 8% Entel Móvil, 22% ENTEL 30% Top brand in Chilean telecom market. Movistar, 22% Claro, 8% GTD, 3% Telsur, 2% Telmex, 4% 2009 ENTEL Revenues by Business Line Entel s Market Share (Septiembre 2010) 38% 42% 31%-38% Chile Wireline 22% Americatel Peru 2% Call Center & Others 1% Mobile services 75% Mobile Data Source: Entel Services (*) Exchange rate as of June 2010 $ DLD - ILD Total Revenues 2009 = US$2,057 MM (*) 6

7 Entel is the top brand in the Chilean industry Overall Image Survey Chilean Mobile Telecom Sector (September 2010) New brand image launched in February Entel Movistar Claro Better Quality of Communication Largest Number of Branches Advanced Technology Best Coverage Best Price Plans Best Customer Service Most Innovative bills exact Best Cell phones Greater Variety of Additional Services Recommend closer to me fulfills its promise Best Internet on your cell phone Best Broadband to Women to man to young to Adults to wealthy people to companies I identify Chilean represents Fuente: Kronos Chile January - September

8 Entel s top quality services are provided through its extensive network POP ( ) Mobile Network (60 Mhz in Band 1900 Mhz) 1 BSC IQUIQUE 1 BSC ANTOF. 1 BSC COPIAPO 1 BSC SERENA 1 BSC QUILLOTA 2 BSC VALP. 11 BSC STGO. 1 BSC SAN ANTO. 2 BSC RANCAGUA 1 BSC CURICO 1 BSC TALCA 2 BSC CONC. 1 BSC CHILLAN 1 BSC TEMUCO 1 BSC VALDIVIA 2 BSC P. MONTT 1 BSC COYHAIQUE 1 BSC P. AREN. BSC ( 32 ) MSC ( 8 ) 1 MSC-S ANTOF. 1 MSC LA SERENA 1 MSC-S; 1 MSC VALP. 2 MSC; 1GMSC STGO. 4 MSC-S STGO. 1 MSC; 1 MSC-S RANC. 1 MSC; 1 MSC-S CONC. 1 MSC TEMUCO. 1 MSC-S P. MONTT 1 MSC-S P. AREN. MSC-S (10) MGW (23 ) IQUIQUE ANTOFAGASTA LA SERENA VALPARAISO SANTIAGO RANCAGUA CONCEPCION TEMUCO PUERTO MONTT PUNTA ARENAS RNC (25 ) MSC : Mobile Switching Center MSC-S : Mobile Switching Server Center POP : Point of presence BSC : Base Station Controller MGW : Media Gateway RNC: Radio Network Controller 1 MGW IQUIQUE 1 MGW IQUIQUE 1 RNC IQUIQUE 1 MGW ANTOF. 1 RNC ANTOF. 1 MGW COPIAPÓ 1 RNC COPIAPÓ 1 MGW 1 MGW LA SERENA 2 RNC LA SERENA 1 MGW VALPO 1 MGW QUILLOTA 1 MGW 1 MGW VALP. 2 RNC VALP. 6 MGW STGO 8 RNC STGO 1 MGW SN ANTON 1 MGW RANCAG. 2 RNC RANCAG. 1 MGW CURICO 1 MGW TALCA 1 RNC TALCA 1 MGW CONCEP. 1 RNC 1 RNC CONCEP. 1 MGW CHILLAN 1 RNC CHILLÁN 1 MGW TEMUCO 1 RNC TEMUCO 1 MGW P. MONTT 2 RNC P. MONTT 1 MGW VALDIVIA 1 MGW COYHAIQ 1 RNC COYHAIQ 1 MGW P. ARENAS 1 RNC P. ARENAS Domestic Fiber Optic Network Panamerican Cable Arica Iquique Antofagasta La Serena Valparaíso Concepción Valdivia FO Cable to Peru Chillán Copiapo Los Andes FO Cable to Santiago B.Aires and P.Arenas (Chile) Puerto Montt FO Cable to Bolivia FO Cable to Argentina and Atlantic ocean FO Puerto Montt destino Coyhaique Capacity ARICA IQUIQUE ANTOFAGASTA R/E 2 X 140 MBPS 4 X 140 MBPS LA CRUZ R/E R/E EL VIENTO 3 X 140 MBPS COPIAPO LA SERENA VALPARAISO SANTIAGO TALCA CONCEPCION TEMUCO VALDIVIA PUERTO MONTT Digital Microwave Network R/E 3 X STM-1 EL ROBLE R/E R/E R/E 2 X 140 MBPS CHILLAN 3 X 140 MBPS R/E 2 X 140 MBPS R/E CASTRO R/E 3 X155MBPS PTO. AYSEN R/E 3 X STM-1 MBPS R/E COYHAIQUE 3 X STM-1 MBPS FO: Pta Arenas- Argentina-Stgo PTA. ARENAS POP: 3.472; 2G Sites: (2.654 BTS Micro RP); 3G Sites: (incl. FDT) 8

9 ... with presence all along the country Local Telephony Network (NGN-IP) Fixed Wireless Coverage (WiMax) ARICA Arica IQUIQUE ANTOFAGASTA CALAMA Iquique Alto Hospicio La Chimba Antofagasta Chuquicamata (San Jorge) Calama San Pedro de Atacama Michilla Lince COPIAPO LA SERENA COQUIMBO QUILLOTA VALPARAISO SAN ANTONIO CHILLAN TALCAHUANO CONCEPCIÓN TEMUCO VALDIVIA OSORNO PUERTO MONTT VALLENAR OVALLE SAN FELIPE LOS ANDES SANTIAGO RANCAGUA SAN FERNANDO CURICO TALCA LINARES LOS ÁNGELES Copiapó La Serena Coquimbo Viña del Mar Valparaíso Nogales Queronque Santa Cruz Curicó Constitución Talcahuano Concepción Chiguayante Paipote Pichincha Pan de Azucar Los Andes - San Felipe - Nogales Quillota Casablanca Santiago Rancagua Pichidegua Talca Cerro Peñón Chillán Los Ángeles Temuco COIHAIQUE Llanquihue Castro Osorno Puerto Montt Calbuco PTO. NATALES PTA. ARENAS NGN Presence Switches NGN Entel s network provides services to the main cities of Chile (digital and NGN switches). San Gregorio WiMax Presence WiMax Presence (Cluster) Nationwide capacity for 350,000 equivalent lines. 2 national coverage licenses. 100 MHz total spectrum frequency in 3.5 GHz band 9 9

10 Entel also provides transportation capacity via global consortiums Fiber Optic and Satellites Los Angeles Nueva York OJUS Miami NAP Miami ENTEL Bolivia (1 STM-1) Río de Janeiro Lima Santiago 10

11 Entel is moving forward in Social Responsibility Social Responsibility is an essential part of Entel s corporate management... Voluntarily manifesting the ability to listen, understand and meet the expectations and interests of the Company s stakeholders In order to ensure long term sustainability, contributing to the development and welfare of society. Entel services and products play a central role under CSR framework, encouraging academic excellence and improvements in quality of life First Phase of Todo Chile Comunicado was launched: the connection of 451 rural villages from Arica to Punta Arenas with mobile broadband, benefiting 1.7 millon inhabitants. 11

12 Entel shares are traded in the Chilean stock market Highlights Listed on Santiago stock exchange. Entel s Ownership Strong and experienced All Others 23% Market cap 1 : US$ 4.0 billion. Daily average trading volume 2 : US$ 4.1 million. Entel ranked 13 th in traded amount during the first semester of Pension Funds 22% Altel Inversiones Ltda. 55% 1: Exchange rate Ch$/1 US$.- Stock price as of November 22, As of November 18, : Altel is a wholly-owned subsidiary of Almendral (Holding Company) and its main controllers are Matte, Fernandez/Hurtado, Izquierdo and Gianoli Economic Groups. 2: Average from November 2008 to October Entel s corporate governance at high standards. Board of Directors composed by 9 members Controlling parties appoint 7members 2 members are independents. Board Committee composed by 3 Directors 2 members are independent. Procedure related to market disclosure of information. Release of relevant information in company s website. Adoption of Ethic Code. Ranked top 10 in Corporate Reputation and 1 st in Telecommunications Industry. 12

13 Corporate structure Main Operating Companies (Year 2009) Ch$ IFRS values divided by $ US$ 513 mm US$ 179 mm ENTEL Chile S.A. Long Distance / Data Services Internet Entel Consolidated: Total Revenues 2009: US$ 2,057 mm (*) Total EBITDA 2009: US$ 830 mm US$ 1,550 mm US$ 629 mm 100% ENTEL Telefonía Personal Mobile PCS (60 MHz) Móvil US$ 103mm US$ 11mm 100% ENTELPhone Local Telephony / WiLL 100% US$ 43 mm US$ 1 mm Americatel Perú LD / Internet/ Datacom/Local International Wireline US$ 38 mm US$ 2 mm Call Center Chile / Perú 100% 100% Entelfonica Commercial Support US$ 29mm US$ 8mm Cientec ** TI Support Services Chile Wireline *Net of inter-company revenues. **Company acquired in December

14 Business Segments 14

15 Mobile 15

16 Revenue (US$ bn) Ingresos (US$ bn) Revenue (US$ bn) Ingresos (US$ bn) Mobile industry worldwide trends: Voice - Data voice Voz Total Mobile Revenues (data vs voice) Ingresos Globales (Datos/voz) data Datos Total Data Revenues (Broadband vs others) Ingresos Globales (Broadband/Non Broadband) Non Broadband Broadband Total Mobile Revenues (voice and data), Voice services declining in revenue share. Relevant increases in mobile broadband share. Within data, also Mobile Internet (chat, browsing, digital TV and radio) and s are growing rapidly. Source: Informa Telecoms and Media 16

17 Entel is a leader in the mobile industry Mobile Overview 60 MHz in the 1,900 MHz band / GSM technology. 3.5G nationwide. First commercial HSPA+ network in LATAM. Penetration at 108% in Chile,and growing. Strong market share at 38%. Market growth driven by mobile broadband and innovative VAS (Internet mobile and ). Competitive environment, with mobile number portability and new entrants expected in Entel s Mobile Subscribers (in Thousands) % % Strategic Focus Create value, sustained in top global service and best in class network. Revenue growth focused on value-added services, especially mobile broadband and Internet mobile. Convergence of Fixed & Mobile services M09 9M10 Prepaid Postpaid BAM Market Share as of September 2010** Claro 22% Nextel 0% Entel 38% Cagr 07 / 09 Growth 09/10 Expand penetration, through a flexible offering (speed, pricing and VAS). Strategic alliances with technology providers and service vendors. Movistar 40% Source: Entel * Market Share measure over active customers 17

18 Value added services and 3.5G growing at high rates Value Added Services Revenues * (US$ Millions) IFRS 35% 206 IFRS 46% 214 Growth. 08/09 Growth 09/ M09 9M10 * Including Mobile Broadband (as of December th. customers) CHGAAP: Constant CHP as of December 2008 divided by $ / 2010 IFRS values divided by $ VAS / Outgoing Revenues(%) 15,4% 19,1% 23.6% 11.6% 13.0% 7.7% 9.7% 1998 a M10 SMS GPRS XAT (SMS) WAP SMS Premium MMS EDGE EDGE Nacional Video Streaming PTT Blackberry 3.5 G en Santiago y V región 3.5 G cobertura nacional Upgrade a HSPA+ en principales ciudades 18

19 Profitable client base Mobile Revenues (US$mm) -3% 12% / 2010 IFRS values divided by $ Mobile EBITDA and EBITDA Margin (US$mm, %) Growth. 08/09 Growth 09/10-5% % % 41% 41% 39% M09 9M figures impacted by 45% drop in access charges Blended ARPU 1 (US$) M09 9M10 MOU 2 (Minutes/month) Cagr 07 / 09-1% -1% 12% 10% 19,9 21,3 19,5 19,5 19, M09 9M10 1. Average Revenue per User M09 9M10 2 Minutes of usage. 19

20 The wireline business - Chile 20

21 Chile wireline offers integrated solutions focused on the enterprise segment Revenue distribution per segment Year 2009 Corporate and SME * Services to Other Telecom Residential * Companies * Local Telephony 26% Long Distance and value added services 11% Internet 9% Traffic Business 29% Internet 8% Local Telephony 7% IT Services 21% Data services 33% Network Rentals 71% Long Distance and value added services 85% US$ 311 million US$ 229 million US$ 49 million * Includes intercompany Revenues IFRS values divided by $

22 Corporate and SME segments: leading position, consolidating in IT services. Overview Leading position and expertise, leveraging Entel s extensive network (42% market share in traditional data services). Recognized player and growing in IT. Market trends: integrated offerings including IT/telco; convergence of Fixed & Mobile; bundle solutions over IP networks (NGN MPLS). Cuidad de Los Valles is interconnected to the network of six data centers. Deliver wide range of IT Services; Cloud Computing Services On- demand solutions Dedicated virtual servers On-demand hosting and storage services Launched stage 1 (2,000 m2) of new Data Center with a master plan of 8,000 m2. Corporate Strategic Focus Continue leading traditional Telco market (integrated voice, data and Internet). Consolidate position in IT (O/S, data center, virtual services and on-demand services). Develop convergence of Fixed & Mobile services. Provide innovative solutions to grow in new technologies. SME Strategic Focus Increase market share. Expand low cost NGN-IP bundling solutions. Develop a competitive access network ( optic fiber GPON). Provide IT services aligned to the SME requirements (virtual infrastructure and on-demand services); convergence of fixed & mobile solutions. 22

23 Services to other telecom companies: Optimization of network usage Overview Leading network infraestructure provider to other telecom operators and related companies. Service provided to Mobile business represents more than 60% of Network Rentals. Cost-effective provider of Traffic desk, managing credit risk in high volumes related to Wholesale, Incoming Traffic and Value Added Services Revenues Traffic Business US$ 67mm US$ 162mm Note: Includes intercompany Revenues Network Rentals Strategic Focus Provide quality service of rental network capacity to related companies and other operators. Leverage current network capacity. Traffic routing optimization to assure low tariffs for LD traffic. Focus on low risk profile customers. IFRS values divided by $

24 Chile s Wireline Business reporting solid growth Chile Wireline EBITDA and EBITDA Margen (US$ millions) Growth. 08/09 Growth 09/10 26% 16% % 70% 60% % % 34% 33% 28% M09 9M10 40% 30% 20% EBITDA EBITDA Margin Strategy focused in the enterprise segment / 2010 IFRS values divided by $

25 Americatel Perú 25

26 Americatel Perú Overview Continuous growth in datacom and local telephony services in the enterprise segment in the Lima Area. Revenues (US$ millions) Growth 08/09 Growth 09/10 Growing in NGN-IP services over WiMax focused on the enterprise segment, leveraging Chilean experience. Long distance services have decreased, mainly due to the migration of traffic to mobile networks. Strategic Focus 37 3% % Change in revenue mix, increasing services over Americatel s own access network in Lima (WiMax, copper). Launched IT services integrated with Chile M09 9M10 Revenue Mix : Changing to services provided over own access network Data, Local Telephony & NGN 14% Wholesale 36% LD 50% Data, Local Telephony & NGN 43% LD 32% Wholesale 25% M

27 Financial Overview 27

28 Consistent Strong Financials Consolidated Figures (US$ MM ) Revenues EBITDA and EBITDA Margin 0% Growth. 08/09 Growth 09/10-1% % 2,082 2,057 7% ,523 1,624 40% 40% 40% 42% M09 9M figures impacted by a 45% drop in Access charges Operating Income M09 9M10 Net Income 406-6% % % % M09 9M / 2010 IFRS values divided by $ M09 9M10 28

29 CAPEX mostly driven by Mobile Expansion CAPEX Strategy Keep tech. / quality edge in mobile, managing growth and providing broadband solutions. Minimum investments in mature services. Mobile (including postpaid handsets) accounts 81% of CAPEX CAPEX Breakdown Data + Internet 13% All Others 6% Total = US$ 580 million Mobile 53% Bulk of investment driven by demand. Mobile handsets 28% Historical CAPEX * - Excluding postpaid handsets (US$ in Millions) CAPEX / Revenues % 16% 19% 19% *Average Exchange rate of each year. 29

30 Strong cash flow in line with mobile expansion Cash Flow * (US$ Millions) Growth. 08/09 Growth 09/10 3% 35% M09 9M10 * Cash Flow is defined as: EBITDA - Capex - Net financial expenses / 2010 IFRS values divided by $

31 Liquidity and debt ratios reflects the company s healthy financial position M09 9M10 Current Ratio EBITDA/Financial expenses Gross Financial Debt/EBITDA Total liabilities /(Equity+ Minority interest) Net financial debt (US$ Million) Net financial Expenses (US$ Million) Fully hedged to F/X exposure. 44% of debt is at fixed rate. Moody s rating: Baa1, S&P rating: BBB+ (both with stable outlooks) Dividend policy: Up to 80% of Net Income / 2010 IFRS values divided by $

32 with a comfortable debt payment schedule Maturities (US$ Millions) Bank Leasing Total gross debt = US$ 630 million as of June,

33 Thank You Investor Relations Andres Bello 2687 Las Condes Santiago_Chile