Reliance communications
Group 8
Presented by:
Nichelle Kamath
Mitali Mistry
Komal Tambade – F65
Mansi Morajkar – F39
1
Reliance Communication
• Established in 1999
• Ranks among the top 5 telecom companies
in world
• Market cap of Rs 363,371.78
• Customer base of about 80 million in India
• Launched GSM service network in Dec 2008
• Won 13 circles with a spend of Rs.8,585cr
2
Business Mix
3
4
• Rapidly growing national DTH business, rich content Home
access
• 200k +slots, unique ability to provide space and Infratel
connectivity
• One stop shop for all large corporate and SMBs for Enterprise
communication, networking and IT infrastructure
• Largest global private submarine cable network, blue Globalcom
chip global clients
Wireless
• 2nd in India, 4th globally, dual technology
business unit
Current position of different
Telecommunication industry
• 392 million wireless subscribers in India
• Urban penetration close to 70%
• Rural penetration only 12%
• High Minutes of Usage but low ARPU due
to low Average Revenue per month
• Number of operators in rural areas
expected to be low
5
Industry Trends
• Sustained High Growth
• 3G and WiMax Roll – out
• Innovations in internet technology
• Rural penetration
• Infrastructure sharing
• Utilisation of Numbering Resources
• Prepaid services in Jammu and
Kashmir (J&K)
6
Expected Growth in Subscribers
Subscribers(mn)
1200 9 %
= 14. 1109.98
GR 1014.36
1000 CA 909.96
797.8
800
680.02
600 558.88
400
200
0
2010E 2011E 2012E 2013E 2014E 2015E
7
Subscriber market share
18% Reliance
22%
Others
Aircel
3%
Idea
7% TATA
BSNL
17% Vodafone
11% Airtel
11% 11%
8
Revenue market share
Revenue
4%2%
7% Airtel
Reliance
29%
Vodafone
13% BSNL
Idea
TATA
9% Aircel
15% others
21%
9
Competitor profile
10
ARPU continue
• Average Revenue Per User for Reliance Communications, the
dual technology (GSM and CDMA) cellular service provider, has
slipped to Rs. 210 in the first quarter of fiscal 2010 from Rs. 224 last
quarter and Rs. 282 for the same quarter last year
• RCOM added 6,501,363 wireless subscribers in the quarter.
11
Wireless business- product and
services innovations
12
Financial Competitor Analysis
TODAY 52 WEEK
Current Change
Company Low / Low / Volume EPS PE
Price (%Chg)
High High
Reliance
-3.10 (- 175.65 / 131.80 /
Communications 176.05 444320 75.87 2.32
1.73%) 180.65 220.00
Ltd.
-8.15 (- 328.10 / 229.50 /
Bharti Airtel Ltd. 329.05 241334 13.26 24.82
2.41%) 340.00 376.50
-2.15 (- 69.00 / 47.05 /
Idea Cellular Ltd. 69.65 776153 21.82 3.19
2.99%) 71.90 79.90
Mahanagar
-1.35 (- 68.80 / 51.80 /
Telephone Nigam 69.00 987594 -1.42 -48.63
1.91%) 71.50 92.80
Ltd.
Tata
-5.95 (- 312.80 / 230.25 /
Communications 313.25 24628 18.48 1316.95
1.86%) 320.75 468.10
Ltd.
Key financial analysis
Revenues (Rs. Mn)
250 229.49 221.32
214.31
200 190.68
150 144.68
Net Profit (Rs. Mn)
100 70
60.45
60 54.01
50
50 46.55
0 40
FY 07 FY 08 FY 09 FY 10 FYE11 31.63
30
20 17.74
10
0 14
FY 07 FY 08 FY 09 FY 10 FYE 11
Cost management (as a % of revenues with
stable margins)
15
Capital expenditure
25000
22392.3
21275.98
20000
16694.5
15000
13150.09 13607.1
Reliance
Bharti
10000
9394
6387.98
5000 4831.98
0
2007 2008 2009 2010 16
Key ratios
FY0708 FY0809 FY0910 FY1011
Reported
cash EPS
(Rs) 9.64 32.64 21.46 20.76
Dividend
per share 0.85 0.80 0.75 0.50
Net profit
margin (%) 3.33 30.47 17.45 18.63
Current
ratio 2.17 2.73 1.65 1.87
Earning
retention
ratio 117.36 85.48 91.36 94.91
17
18
Wireless Business
19
Wireless Business
20
Wireless Business
21
Globalcom Business
22
Globalcom Business
23
Enterprise Business
24
Enterprise Business
25
Home Business
26
Home Business
27
Looking Ahead
28
New Initiatives by RCom
• Redefines industry benchmarks
• Alliance with Polycom inc. and
Microsoft
• Alliance to continue leadership in
mobile applications
• RITL & Globalcom new
agreements signed
• Globalcom retail expansion
29
30
• Entry of many new Operators
• Entry of Mobile Virtual Network
Challenges
Operator (MVNO) / Brand franchisees
• 3G Launch
• Convergence
• Rural opportunity Opportunities
• Dual Technology
• Passive Infrastructure
• Unique positions in India
THANK YOU
Communication - it’s a never ending
business 31