Airtel India - Investor Day

16th November
Agenda

• Introduction to Airtel

• Our Strengths

• The Industry and Opportunity

• Our Strategy
Who we are : Bharti Airtel

#2 #2
Telecom operator in India Telecom operator in Africa

#3 16
Telecom operator globally* Countries presence globally

* In terms of customer base

Our Size : Global

$12.1 B $4.2 B 4.2

Global Revenues (LTM) Global EBITDA (LTM) Net Debt : EBITDA (LTM)

448 M+ 125 M+ 1.8 B+

Customers Wireless Data Customers Addressable population

LTM = Last Twelve Months as on Sep’18

Customer Data as on Sep’18 exit
Our Portfolio : India

Mobile Services Airtel Business Homes

330 Mn+ Customers #1 Enterprise Telco in India 2 Mn+ customers

Digital TV Tower Infrastructure Payments Bank

15 Mn customers Among Top Passive Infra Providers 30 Mn Banking Customers

Our Portfolio : India

Mobile Business Homes Broadband

Customers (M) 304 Customers (M) 2.2

Revenue (Rs Mn) 462,640 Revenue (Rs Mn) 25,265

EBITDA % 32.6% EBITDA % 46.7%

Airtel Business Digital TV

Large Corporates 2,000 Customers (M) 14.2

Revenue (Rs Mn) 113,566 Revenue (Rs Mn) 37,570

EBITDA % 37.4% EBITDA % 37.9%

Above figures are for FY18

Our Digital Services

Wynk Music Airtel TV myAirtel

100 Mn+ Customers 80 Mn+ Customers 80 Mn+ Customers

One Home

Homes Platform Device Platform Payments Platform

One Billing Layer on all Services Solid Platforms – Device, Lenders, Delivery 1.2 Mn Retailers on one App
Agenda

• Introduction to Airtel

• Our Strengths

• The Industry and Opportunity

• Our Strategy
1a. Obsession with Network Experience : Spectrum

Airtel’s Spectrum Share of Liberalized Spectrum

Aircel
Band Footprint Holding per Circle BSNL 3.1%
9.3%
RCom Airtel 2
Low Band 15 Circles 5 – 10 Mhz 7.0%
28.4%

Mid Band Pan India 15 – 25 Mhz1 Jio 20.5%

31.7%

High Band Pan India 20 – 30 Mhz Voda + Idea

Massive spectrum holdings across all bands

1. Except for Kolkata (9 Mhz) and West Bengal (6.2 Mhz)

2. Includes liberalized spectrum of Tata
1b. Obsession with Network Experience

Largest Ever Deployment Extensive Fiber Roll-out State of the Art Tools

Geo-Spatial Analysis

100 mbps 200 mbps 1 gbps

Self-Optimizing Network

~200K Base Stations

In last 2 years
Bulk of our Sites are 200+ Mbps
Digitization

Continuously rated as India’s fastest network

2. Obsession with Customer Experience
Decision Tree Platform ‘Next Gen’ Digital Stores

Open Network Call-center Calls per customer

75% reduction

0.25x

FY'15 FY'18
3. Scientific Sales & Marketing

Deep Customer Understanding Omni Channel Delivery Powerful Tools

1.2 M Retailers GOAL

2,850 Airtel Stores

Customer 360 Mitra

Own Digital Apps

Geo Spatial Analytics
Data Science
4. A War on Waste

Opex Growth YoY

8.0%
6.9%

6.0% 5.0%

4.0% 3.1%

2.0%

• Smart Procurement
0.0%
FY'15 FY'16 FY'17 FY'18
• Frugal Cost Culture
-2.0%

• Continuous Process Redesign

-4.0% -3.1%
• Digitization and Automation
5. Capacity to play multiple games

Dedicated Teams for the Core Preparing for the Future Design & Execution Machines

Movies, Music,
myAirtel
Circles
One Home

Open Platforms

Center
New Products

Excellence in Partnerships
Business Environment Remains Challenging

Massive Need for Capex ARPU Erosion by 45%

Disruption

Battle for 4G Primary Slot 10x Data Traffic Growth

Financial Performance : India

Reported Revenue (Rs. Cr) EBITDA %

84,000 Series 1
73,422 40.9% 41.4%
74,000 70,844
64,529 64,096 39.2%
64,000 37.2%
54,000

44,000

34,000 28.5%

24,000

14,000

4,000
FY'15 FY'16 FY'17 FY'18 FY'15 FY'16 FY'17 FY'18 Q2'19

YoY Growth % 12.1% 9.8% 3.6% -12.7%

Operational Performance : Mobile India

Mobile Customers (Mn) ARPU (Rs.)

350 333 220
188
330
170 145
310
282
290
260 120 100
270
250 70
230
210 20
Q2'17 Q2'18 Q2'19 Q2'17 Q2'18 Q2'19

Data Consumed (PB / Day) Voice Minutes per Day (Bn)

8 7.5
30
26.9
7
25
6
20
5 4.8
15
4 3.4
10 7.9
3
5 1.8
2
0
Q2'17 Q2'18 Q2'19
Q2'17 Q2'18 Q2'19
RMS Performance

34.4%

Airtel 32.1%
31.3% 30.7% 33.8%
A+T+T

22.9%
Vodafone 21.5%
19.4% 19.9% 19.3%
18.7%
Idea 34.7%
16.3%
15.4% V+I
28.5%
Others
23.3%
21.4% 22.4% 22.4%
Jio

10.80%
11.6%
Jio 9.1%
Others

Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19

RMS is calculated on the basis of adjusted gross revenue including NLD. Source: TRAI
Agenda

• Introduction to Airtel

• Our Strengths

• The Industry and Opportunity

• Our Strategy
The Industry and Opportunity

Mobile Homes B2B

Explosive 4G Growth

# 4G Phones (Mn) Avg. Time Spent (Mins/Day)

300
Series 1 Series 1
320 250
250
220
200
120 200
180

150
Sep'16 Sep'17 Sep'18 Sep'16 Sep'17 Sep'18
More than a
Phone
Data usage per month (GBs) Voice Mins per month
750
9 686
Series 1
650

550 518
4
450 406
1
350
Sep'16 Sep'17 Sep'18 Sep'16 Sep'17 Sep'18

Based
*Baseson on
internal estimates
internal and Statista.com
estimates data
and Statista.com Data
Opportunity

Customer Revenue Contribution

Postpaid

Prepaid Smartphones

Prepaid Mass Market

Opportunity

Customers Geography

Different Customers, Different Needs High Potential Districts

The Industry and Opportunity

Mobile Homes B2B

Homes

Affluence Rising The Home Opportunity

Households with Income > Rs 10 L p.a.*
Home Broadband Pay TV

36 Mn 18 Mn 140 Mn

30 Mn

2 Mn 15 Mn

2018 2020

* Source: BCG - The New Indian

The Industry and Opportunity

Mobile Homes B2B

B2B

Significant Potential Use Occasions Exploding

Market Size

Connectivity Non-Connectivity

Top
3000 12,000 Cr Data Centers Connectivity

SME Huge
(1.4 Mn) Opportunity

10,000 Cr
SOHO
(8.5 Mn)
Video Conferencing Audio conferencing

Source: Frost & Sullivan Research Reports and Internal Estimates

Agenda

• Introduction to Airtel

• Our Strengths

• The Industry and Opportunity

• Our Strategy
Airtel Strategy

Win 4G
decisively
Win 4G Decisively

Our Strategy

Postpaid • Gain Decisive Leadership through an Exceptional Experience

Prepaid Smartphones • Win in Urban India and Top Villages

Prepaid Mass Market • Upgrade to 4G.

Win 4G Decisively

Services Devices Network Experience

Airtel Strategy

Win 4G Win with Brilliant

decisively Experience
Win with Brilliant Experience

Superior Network Experience

Create Capacity Focus on Quality Disrupt and Innovate

• Massive Spectrum Holdings • Track Quality at Customer Level • Reduce Cost per GB

• L900 Re-farming • New Age NOC • Work with Disruptive Vendors

• Fiber Densification • Drive VoLTE • VRan, ePC etc

Transparency and Personalization : Open Network 2.0

Win with Brilliant Experience

Automation and Digitization Digital Experience at Stores Personalized Network Experience

Airtel Strategy

Win 4G Win with Brilliant Build New

decisively Experience Revenues
Build New Revenues

Accelerate Homes

Broadband DTH Integrated Homes

Focused Expansion Rapid Expansion Converged Solutions

Build New Revenues

Accelerate B2B

Expansion Alliances Build New Verticals

Grow SME & Go Deep More Products, Stronger Relationships

Build New Revenues

Grow Digital Services

Content Services FinTech Services

Build New Revenues

Partnership Principles

T Transparent Commercials

E Ease of Integration on our Platform

A Accelerated Adoption of Partner Propositions

M Mutual Growth
Build New Revenues

The Open Telco Platform

Alliances (Examples)

Services
Device
Mobile Platform Hardware

Fixed
Customer Internet
360
TV Home Products
Services
Office Software
Platform
3P SW &
HW

Payments Utilities
Payments Bank
Platform Goods & Services
Airtel Strategy

Win 4G Win with Brilliant Build New Win with a War

decisively Experience Revenues on Waste
Win with a War on Waste

Drive Opex Savings Improve Capex Productivity

• Process Re-engineering • Infrastructure Sharing

• Digitization and Automation • Smart Procurement

• Business Simplification • Adopting Disruptive Technologies

Airtel Strategy

Win 4G Win with Brilliant Build New Win with a War Win with People
decisively Experience Revenues on Waste
Win with People

Cross Functional Team Work Passion and Motivation Simplify Organization

Build Airtel of the Future

Airtel Strategy

Win 4G Win with Brilliant Build New Win with a War Win with People
decisively Experience Revenues on Waste

Win with a Digital Airtel

Summary

Simultaneously Consolidating in the Short Term

And

Building for the Longer Term

Winning with Customers & New Age Go To Market
Customer Scale| 800 Mn Mobile Users in the Country

1.2 Billion Indians 800 Mn Mobile Users Win with Customers

Winning with Customers| Few Customers = Significant Revenue

Few
Significant Industry Revenue
Customers

Exceptional Service to Customers – Exciting Content and Privileged Experience

We have a deep understanding of who our customers are

Using Data Science and Customer Insights

What do they want to buy, spend on?

Services - Content
- Financial Access
Identifying our Customers!
Demographics Psychographics
Attitudes & Who are they?
What are their needs, aspirations? Age Personality
Behavior Gender Values
Profession Activity
Location Interests

What devices do they aspire for?

Devices What do they enjoy using?

Where are they from?

Geography
Clarity about how this will be delivered

Services Devices Network Experience

Priority Resolution

Exciting Services, Device & Privileged Experience | Seamlessly delivered through our Omni-Channel Touch points!
Open Partner Ecosystem to get the very best for Customers

Transparency

Ease of Integration

Adoption made easy

Mutual Growth and margins

Multiple touch points| Consistent engagement with customers

1.2 Mn Retailers 2,850 Stores Exclusive Promoters Digital Touchpoints

Right
Conversation

Pitch Book

Tool Kit

Digital Tools
In Summary | Well geared to Win With Customers!

Services 360o
Go To Market
Devices

Experience

Strong Network Rollout Brilliant Partnerships

Delivering World Class Digital services
We have built the two largest media products in the country

100 Million 80 Million

Customers Customers
• #1 Music Streaming app • 375 Linear channels & over
in India 10K Movies & shows

• Highest Engagement • 2000 years (1.3bn min)

metrics in the Industry watch-time per month

Benchmarking Source : App Annie Data, Sep 18

Built with love by a young and passionate startup team within Airtel
Our Vision
Our Content Play | Media products drive 3 business objectives for us

Drive Airtel Telco Objectives Build New Revenues

↑
Consumer
ARPU uplift Advertising
Stickiness
We are already seeing a significant impact on customer stickiness

Churn
X

0.7X
Material Impact
on Customer
0.4X
Lifetime Value

Pure Telco Single Digital With Video Scenario

Service
(Music)
We are using content laddering to drive ARPU Uplift on Airtel TV

Marquee Postpaid
Partnerships

Premium Content
& Exclusives
High Value Prepaid

Live TV & Mass Content

Basic Prepaid

Limited Content Access

New Revenue Streams | Advertising revenue as a targeted publisher

Inventory Intelligence Innovation

Multi Bn – video, audio, Driven by Customer 360 Future proof & low intrusion
display
channels

Audio Ads Video Mastheads Video Ads

How are we doing it ?
Building integrated & flexible micro services

New
Apps

Customer 360

Advertising & Smart Personalized Reco & Reward

Single Sign-on experiences capability
Targeting
Tight Cross Pollination across Digital Assets

Digital distribution strategy with

a Plug & Play SDK of Audio &
Video

Integrates with the partner app in

less than 7 days

Already powers My Airtel app 

Creating Next Generation Network
Building Next Generation Network

• Sufficient capacity

• Deeper coverage

• Optimizing “experience”

• Automation of network operations

• Reducing cost of delivery

Promise to Our Customers

Best Broadband Experience Good Quality Voice Connection

Great Content Experience Honest Timely Response

Creating Capacity & Extending Coverage
Well Positioned with Spectrum Holdings

Airtel’s Spectrum Share of Liberalized Spectrum

Aircel
Band Footprint Holding per Circle BSNL 3.1%
9.3%
RCom Airtel 2
Low Band 15 Circles 5 – 10 Mhz 7.0%
28.4%

1
Mid Band Pan India 15 – 25 Mhz Jio 20.5%

31.7%

High Band Pan India 20 – 30 Mhz Voda + Idea

Massive spectrum holdings across all bands, with maximum spectrum deployed for 4G

1. Except for Kolkata (9 Mhz) and West Bengal (11.2 Mhz)

2. Includes liberalized spectrum of Tata
Sufficient network capacity

Largest Ever Deployment Carried traffic (PBs/ Day)

27

8
2

~200K Base Stations

Sep'16 Sep'17 Sep'18 Mar'19
In last 2 years
Carried Traffic Network Capacity

Sufficient headroom in network capacity to ensure good user experience

Augmenting Capacity on Existing Sites

Maximizing spectrum for 4G

LAA – 5GHz

2300
2100
1800

900

Two layers Five layers

Adding capacity with minimum increment Capex & Opex

Address Hyper Capacity Sites

Sectorization Massive MIMO

2x capacity and additional

indoor coverage 3x~5x Capacity Gain

Adding capacity with minimum increment Capex & Opex

Extending Coverage - 4G in Sub-GHz band (900MHz)

Increase in VoLTE & data consumption

• Enhanced time spend on 4G

• Reduction in customer complaints

L2300
• Additional spectrum for 4G, improving data experience
L1800
• Existing handsets supports 4G in 900 band
L900

Reframing liberalized 900 band spectrum to 4G across ten circles by Mar’19

Small Cells for Coverage & Capacity

Outdoor Hot Spots High traffic locations Public locations

Inside shopping malls Tourist locations Corporate offices

Small cells with innovative Opex models – collaboration with ecosystem

LTE-Advanced for Improving User Experience & Capacity

India’s first 4.5G network Improvements

• 3x increase in peak throughputs

• Increase in network capacity with

3x
existing handsets

Aggregating 4G carriers • Further opportunity to increase

with 4x4 MIMO handsets

Software only upgrades on existing sites to augment capacity & improve user experience
Getting Backhaul Ready for 4G & Massive MIMO

Challenge Approach

Getting sites ready for Massive MIMO & 4G capacity

1. Backhaul readiness for 4G expansions

100 mbps 200 mbps 1 gbps

2. 1Gbps for massive MIMO sites

Upgrade 200Mbps sites to 400Mbps using additional spots

Single hop network – ready to support capacity across all 4G bands

Building Transport “Expressways”

Extreme-scale architecture 16QAM

8QAM 32QAM
Readiness to handle data explosion
QPSK 64QAM
@ disruptively lower cost/bit

 10x scalability
100G to 400G
 Superior network uptime

 5G Ready backbone

Full optical cross-connect

Worlds Largest Self healing ‘IP over photonics’ implementation

Improving Operational Efficiency

Single RAN Outdoor Sites Outdoor microwave

Using new generation architecture for improving coverage, experience & tightening OPEX
Improving Voice & Data Experience
Customer Experience – End to End perspective

Network

Applications Customers

Environment Devices

Operating System
Taking Content Closer to Customer – Reducing Latency

Challenge Approach

Legend
Cross-connect
Optical by-pass
Router
Access node

Over 350 mini data centers for distributed content connected with IP over Photonics
Automation of Service Provisioning & Management

Software defined network, agile and converged IP network

Building Predictive Experience Management

We are here Point of arrival

FCAPS Reactive Proactive Predictive

Self Healing network e2e Root cause map

Leveraging Machine Learning & Artificial Intelligence to optimize user experience before it hits the customer
Summary

Passionate across organization for delivering delightful experience

• Augmenting capacity with minimum cost

• Extending coverage using liberalized low band spectrum

• Moving to proactive & predictive experience

Homes of the Future
Opportunity 1: Expansion

286 Mn Households in India

183 Mn TV Households in India

152 Mn Pay TV Households in India

65 Mn DTH Households in India

18 Mn Broadband Households in India

15 Mn Airtel DTH Connections

2.2 Mn Airtel V-Fiber Connections

*Source: FICCI EY 2018, TRAI

Opportunity 2: Converged Solutions

Changing media consumption and lifestyle habits: 30 Mn HH with 10L+ income p.a.*

- Linear & Non-linear content

- Media consumption on the go

- Virtual Connect

- Security & surveillance

*Source: BCG – The New Indian

Growth Opportunities

DTH: V-Fiber: Airtel Home:

Rapid Expansion Focused Expansion Converged Solutions
Airtel Home: Leverage Go-to-market of V-Fiber & DTH

1500+ Channel Partners 2850 Airtel Stores National Retail Presence

Modern Trade / B2B Relationship Strong Sales & Service Organization Robust Partner Ecosystem
& IT Enabled Processes
Airtel Home: Consumer Proposition
Single Proposition for Linear & Non-Linear Content

Single Bill, Single Payment Single Sign-on Content Discovery & Recommendation
Airtel Home: Consumer Services

Catch-up TV Voice Assistant Integration Video-calling Internet of Things:

Smart Homes

Cloud DVR Security/ Surveillance Gaming

Airtel Home: Best-in-class service experience

Homes Platform Premium Customer Care Digital Journeys

for ‘Homes’ Customers for Entire Customer Lifecycle
From Pipes to Enterprise Solutions
Airtel Business | An Overview

Data Domestic &

Centers International satellite
2,50,000 RKMS Satellite partnerships
Global Fiber
10 Large and 130 Edge DCs
Fiber
4 Upcoming DCs

Voice &
Mobile
Alliances across the
world
PoPs
India and Global
PoPs Across India
Customers and Globe

Cables
30 International Cables
CLS
7 Cable Landing Stations
Airtel Business | Product Portfolio

Data & Connectivity Data Center & Cloud Global Voice & Messaging
Internet | MPLS | IPLC & Colocation Services | Managed • Wholesale Voice | International
Ethernet Hosting | Infrastructure Toll Free (ITFS) | Message Hub |
VSAT | NLD | Local Access Management | Cloud Solutions SMS Firewall Solution | Airtel Talk

IoT Cyber Security Collaboration

Connectivity | Connectivity
Security Products | Audio Conferencing | Unified
Management Platform | Applications
Managed Security Collaboration | Video Conferencing
Services| Bundles

Mobility
• Postpaid | Data Card
• International Roaming
Airtel Business | Unique Business Model

Customer relationship
Customer • Sales, Product specialist and
Relationship customer experience team of 1500+
member
Key activities
• Product creation
• Digital platforms
Key
Activities

Value Customer
Partner segments
Propositions
MONETISE ALL AIRTEL ASSETS
• Domestic Fiber
• Submarine Fiber
• Data centres Unique
• Towers
• 426 Mn subscribers
Culture Channel
• FTTH & One Home
• Customer Analytics
• Payment Bank
• Wynk
• 14 countries Africa operations
Revenue
Cost
stream
structure
Market Snapshot

1,200+ customers Global

Carriers
and OTTs

Connectivity
2,000 customers
Market FY’18: 12,000 Cr
Large & Major
Accounts
Growth: 10%
Non-Connectivity:
India Huge Opportunity

MSME
10.0 mn customers Market: 10,000 Cr
MSME / Small
Growth: 20%
offices India

Source: Frost & Sullivan Research Reports and Internal Estimates

Airtel Business Strategy

Go Global
1,200+ customers Global Bring Global customers &
Carriers content to India
and OTTs
Lead & Innovate
Leadership in Core Connectivity &
Digital offerings
2,000 customers
Large & Major
Accounts More Products Per Customer
New strategic products and offerings
India for business growth

Expansion
10.0 Mn customers MSME / Small Tap MSME Segment with
bundled offerings
offices India
Key Takeaways

• Unique Business model

• Make India as Digital Internet Hub

• Leadership in core connectivity

• Integrated Enterprise solutions provider

• Bundled simplified product for MSME

Payments Bank – Banking the Next 500 Million
Our Mission and Vision

Mission:
Grow India by improving financially under-banked
and digitally underserved lives

Vision: Every Mile, Every Family, Every Business

We have built moderate scale

Digital Services Remittances Cross-sell products

Over 10% Market Share in #1 Payments Bank to launch

Top #10 UPI Players
Domestic Remittances PMJJBY & APY

Assisted Payments
and Withdrawals Cash Drop Services

#1 In No of Banking Points 20 Partnerships

in the country
Strategy

Mission:
Grow India by improving financially under-banked
and digitally underserved lives

Vision: Every Mile, Every Family, Every Business

Airtel Retailer as a Hub for

Airtel Digital Ecosystem

Enabling Industries and
The Bottom of Pyramid

Small Businesses and

Institutions

Merchants
Services

Digital

Frugal

Culture

Products
Digitization – Core of New Airtel
What you have heard so far

Deep Brilliant
Enable Delivery &
Customer Customer
Partnerships Adoption
Understanding Experience
The Digital Brain – using power of AI and Machine Learning
Realtime Triggers

Postpaid
Prepaid
Broadband CLM
DTH

Omnichannel

Digital Next Best Action

Brain
Digital Advertising
Data Lakes

Customer (BSS)

Personalization

Network (OSS)
Bringing transparency to NW Experience

Open Network 2.0 takes network transparency even further

• Provides coverage quality in any area

• Real-time alerts on network degradations or outages with a resolution timeline

• Personalization using user level data and analysis

• Full troubleshooting for profile, device and NW issues

Next Gen Digital Stores

Open design wrapped in digital technologies Touch table to create personalized solutions

Explore network experience & enjoy digital content Social wall to explore airtel stories
Airtel Open Telco Platform Strategy

Services Platforms Devices Platform Payments

(Homes + Offices + Thanks + (Phones + IOT + Platform
3rd Party Services) 3rd Party HW) (Bill Hub + Cash Mgmt)

CUSTOMER 360 PAYMENTS

(unified view of the customer) BANK
Delivery & Distribution - Offline drives Online

Mobility
DTH + Broadband
Payments Bank

80mn Customers

Content Complete cross-pollination

Live TV

80mn Customers
Airtel Mitra App
Used by 1.2 Mn retailers

Music

100mn Customers