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Abhijeet Sangle 9300 Vaibhav Sancheti 9300 Pravin Gondhale 9355

Indian Telecom Sector. Abhijeet Sangle 9300 Vaibhav Sancheti 9300 Pravin Gondhale 9355. Introduction. India is the second largest telecom market in the world. Fastest growing market in the world (in terms of new users addition).

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Abhijeet Sangle 9300 Vaibhav Sancheti 9300 Pravin Gondhale 9355

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  1. Indian Telecom Sector AbhijeetSangle 9300 VaibhavSancheti 9300 PravinGondhale 9355

  2. Introduction • India is the second largest telecom market in the world. • Fastest growing market in the world (in terms of new users addition). • Growth opportunities driven by strong growth fundamentals, increasing urbanisation, rising income levels and favourable demographics. • The majority of new customers likely to come from the rural areas with inadequate basic infrastructure and limited or no connectivity. • Fiercely competitive market. • Tariffs rates offered are one of the cheapest in the world.

  3. Mobile subscribers (share of the world) Source: India Telecom 2010, KPMG

  4. Services Offered

  5. The Urban consumer demands The Rural consumer demands lower tariffs for voice calls, value added services like information about market and commodity prices, weather updates • high speed internet connectivity, • audio video streaming, • navigation and location maps, • music downloads, • gaming, • m-commerce, • IPTV and mobile TV

  6. User Base

  7. Growth/Contraction in Services

  8. Growth/Contraction in Services Teledensity1 (%) Source: 1: KMPG India Telecom Report, 2010 2: TRAI, The Indian Telecom Services Performance Indicators Quarterly Reports

  9. Global wireless ARPU comparison (2009) Source: India Telecom 2010, KPMG

  10. Regulatory Environment

  11. Key Players

  12. SWOT Analysis of Indian Telecom Sector

  13. BhartiAirtel Ltd.

  14. Market Share of Cellular Operators

  15. Business Segments • Mobile Service • Telemedia Services • Under telemedia services, BhartiAirtel provides broadband, data and fixed line telephone. • Digital TV Services • Enterprise Services • Passive Infrastructure Services

  16. Business Segments

  17. Business Model

  18. Business Model Strategic Outsourcing Model

  19. 3G and BWA 3G: • Secured licenses for 13 circles for a total consideration of about Rs. 12,000 Cr. (Appox.) BWA: • have acquired spectrum in four circles - Karnataka, Punjab, Kolkata and Maharasthra for a total consideration of just over Rs. 3,000 Cr. Financing: • Debt Rs. 8000 Cr. (Approx.) • Rest Internal Cash

  20. Zain Africa Acquisition and its Impact What Bharti Gets? Pros: • Reach to 15 African Countries. • Zein Africa is No.1 in 10 markets, ranking 2nd in another four. • Added 42 millions of subscriber base. Combined user base over 180 million. • 7th largest mobile company in the world by user base. • One of the fastest growing region for telecom sector in the world. Cons: • Zain’sAfrican operations have posted a loss of $111 million in nine months ended September 2009. • Loss making markets like Uganda and disputed assets of Nigeria (for which Bharti is yet to pay.) • Direct competition with African Biggie ‘MTN’.

  21. Zain Africa Acquisition and its Impact (Amounts in Billion USD)

  22. Zain Africa Acquisition Financing • Debt raised from a consortium of foreign banks and State Bank of India. • Lead-arranger and lead-advisor Standard Chartered Bank committing the highest amount -- $1.3 billion. • Followed by $0.9 billion by Barclays. • The rest of the co-advisors -- ANZ, BNP, Bank of America-Merrill Lynch, Credit Agricole CIB, DBS, HSBC, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation -- have allocated $600 million each. • SBI has given Loan of around $ 1 billion in Rupees. • Loan Tenure 6 Years • Interest Rate: (Floating) LIBOR + 195 basis points (Approx. 2.5% ) • Debt/Equity Ratio raised to 1.3 (Q2 2010 Consolidated Results) from earlier 0.3.

  23. Financials

  24. Thank You

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