Bringing affordable mobile to the Indian mass market

Transcription

1 Uninor Sigve Brekke, Managing director Uninor Bringing affordable mobile to the Indian mass market 23 million subscribers* 13 circles and 2,000 sites Proven market and distribution model 1,800 distributors 330,000 points of sale Operating cash flow on track Focus on ultra low cost operations *) Subscribers as of August 2011, based on 30 days activity

2 The Indian wireless market continues to grow Subscriptions (mill)* 0% SIM penetration translating into 50% real penetration Industry monthly churn of 9-10% gives opportunity for newcomers Still a very competitive market Jun'11 Real Penetration (%)* 4% 49% 50% 43% Sep'10 Feb'11 Apr'11 Jun'11 *) Source: TRAI. Real penetration estimated by Uninor Pricing: Early signs of rationality? Incumbents price per minute stable for the last five quarters Recent moves by incumbents to increase prices 20% increase in tariffs on selected prepaid plans Early days to see real benefit Still very competitive on acquisition High cost of acquisition Free airtime offered on acquisition Average price per minute (INR paise)* 0,80 0,0 0,60 0,50 0,40 0,30 0,20 Bharti RCOM IDEA Q Q4 Q Q4 Q Q4 Q Q1 Q Q2 Q *) Source: Company reports

3 Clarity on regulatory framework required New National Telecom Policy Spectrum policy Rural rollout obligations M&A framework Revised Interconnect rates Investigation into 2G licence allocation ongoing Supreme Court case: More rationality visible Central Bureau of Investigation: Awaiting framing of charges, may take more time Parliament investigation: Investigating government policies on allotment of licence and spectrum

4 Uninor confirming its position as most successful new entrant Subscribers (mill) / market share (%)* 4 million net adds per quarter Performance in 13 operational circles 12% share of net adds 15% revenue growth QoQ 4% subscriber market share Stable ARPU around INR 100 Proven go-to-market model ,6 % 3,9 % 4,2 % 8 3,1 % 4 2,1 % 1,2 % Q210 Q310 Q410 Q111 Q211 Aug'11 *)Based on subscriber market share, as reported by TRAI for June 2011 for 13 circles. Subscribers based on 30 days activity. Already in decent positions in best performing circles Subscriber market share /rank* UP West UP East Kolkata West Bengal Bihar Orissa Gujarat Andra Pradesh Maharashtra Mumbai Karnataka Tamil Nadu Kerala % 6.2 % 5.8 % 5. % 5.2 % 4.5 % 4.2 % 4.0 % 3.5 % 3.1 % 2.3 % 1.8 % 2.0 % Ranking based on revenue market share as reported by TRAI for June 2011

5 Cash flow profile according to plan Revenues EBITDA Capex A 2010 A 2011 E A 2010 A 2011 E A 2010 A 2011 E All numbers in INR billion Financial targets unchanged Operating cash flow (INR billion)* EBITDA breakeven approx. 3 years after launch Operating cash flow breakeven approx. 5 years after launch Peak funding within INR 155 billion (35) (44) (~40) (~35) *) Operating cash flow defined as EBITDA before other items less capex. Actuals , outlook 2011 and forecast Exchange rate INR/NOK = end of Aug 2011.

6 Operating on three strategic pillars Best on mass market distribution Best on servicing basics Ultra low cost operations What does ultra low cost operations mean? Uninor Incumbent 1 Basic Vs. Broad 2 Clusters Vs. Expansive 3 Volume Vs. Premium service 4 Multi-SIM Vs. Single SIM 5 Functional Vs. Emotional Simplification, standardization and continuous improvement

7 Mass market distribution as a distinct capability More than 50% of customers influenced at point of retail Direct link to retailer ensures payment and relationship Processes and IT to drive daily targets and network utilization Best practise across Asia Cluster approach Scale matters in clusters not Pan-India Uninor positioned as best price on local voice 80% of revenues are local voice Dual-SIM handsets allow for handover for customers 30% of handsets are dual-sim 50% of new handsets are dual-sim

8 Position brand as best price on local voice Build on-net communities Preferred second SIM in cluster Basic VAS services Network capacity-based pricing Reduction in churn and subscriber acquisition costs SAC reduction through From acquisition to usage focus Distributor and retail support linked to KPI and quality acquisitions Focus on the most profitable retail Customer Acquisition Cost (INR) Churn reduction through Improving quality of acquisition Proposition better understood by customers Utilising business intelligence experience from other Asian markets Q1'11 Q2'11 Q3'11 Q4'

9 Ultra low cost operating model Capacity enhancement Energy efficiency Transmission optimisation Managed service transformation IT simplification Process simplification Ultra low cost execution will bring Uninor at par with incumbents Average cost per minute (INR paise)* Incumbent Q410 Q111 Q *) Computations based on total minutes as reported by TRAI.

10 Summary Basic services focus on local voice Best on mass market distribution Ultra low cost operations Peak funding within INR 155 bn Uninor Sigve Brekke, Managing director Uninor