INDUSTRY PROFILE:

INDUSTRYOVERVIEW
1.1 Background The Indian Telecommunications network is the third largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world. The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for Indias resurgent Indias economic growth . 1.1.1 Growth This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. 1.1.2 Wireline Vs Wireless It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The preference for use of wireless phones has also been predominant in the sector. Participation of the private entities in the telecom sector is rapidly increasing rate there by presenting the enormous growth opportunities. There is a clear distinction between the Global Satellite Mobile Communication (GSM) and Code Division Multiple Access (CDMA) technologies used and the graph below shows the divide between the two. 1.2 Segment wise Status 1.2.1 Wireline Services With increasing penetration of the wireless services, the wireline services in the country is

becoming stagnant. On the other hand, Broadband demand has picked up and promises to stabilise fixed line growth. 1.2.2 GSM Sector In terms of the Global System for Mobile Communication (GSM) subscriber base this now places India third after China and Russia.China had 401.7 million GSM subscribers 1.2.2 CDMA Services CDMA technology was introduced in India as a limited mobility solution. The introduction of CDMA services has created competition, lowered tariffs and offered many citizens access to communication services for the first time 1.2.3 Internet Services Internet services were launched in India on August 15, 1995. In November 1998 the government opened up the sector to private operators. A liberal licensing regime was put in place to increase Internet penetration across the country. The growth of IP telephony or grey market is also a serious concern. Government loses revenue, while unlicensed operation by certain operators violates the law and depletes licensed operators market share. New services like IP-TV and IP-Telephony are becoming popular with the demand likely to increase in coming years. The scope of services under existing ISP license conditions are unclear. 1.3 Manufacture of Telecom Equipment Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunication, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last two years saw many renowned telecom companies

setting up their manufacturing base in India. Ericsson has set up GSM Radio Base Station Manufacturing facility in Jaipur. Elcoteq has set up handset manufacturing facilities in Bangalore. Nokia set up its manufacturing plant in Chennai. LG Electronics set up plant of manufacturing GSM mobile phones near Pune. The Government has already set up Telecom Equipment and Services Export Promotion Forum and Telecom Testing and Security Certification Centre (TETC). A large number of companies like Alcatel, Cisco have also shown interest in setting up their R&D centers in India. With above initiatives India is expected to be a manufacturing hub for the telecom equipment. 2 POLICY AND INITIATIVES

2.1 Regulatory Framework The Telecom Regulatory Authority of India (TRAI) was set up in March 1997 as a regulator for Telecom sector. The TRAIs functions are recommendatory, regulatory and tariff setting in telecom sector. Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in May, 2000. TDSAT has been empowered to adjudicate any dispute between a licensor and a licensee between two or more service providers between a service provider and a group of consumers hear and dispose of appeal against any direction, decision or order of TRAI Tariffs for telecommunication services have evolved from a regime where tariffs were determined by Telecom Regulatory Authority of India to a regime where tariffs are largely under forbearance. TRAI intervenes by regulating the tariffs for only those services, the markets of which are not competitive. Universal Service Obligation Fund (USOF) exclusively for meeting the Universal Service Obligation was established in April, 2002. The Universal Service Levy is presently 5 per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers except the pure value added service providers like Internet, Voice Mail, E-Mail service providers etc. Indian Telegraph Act has been amended in October2006 to provide support for all telegraph

services including mobile and broadband to bridge the digital divide. With the introduction of the Unified Access Licensing Regime, operators can offer telecom access services to consumers in a technology neutral manner, subject to fulfilling certain conditions. Introduction of this regime has also broken the legal/regulatory impasse between the cellular and basic service providers. Issuance of Intra-Circle Merger and Acquisition Guidelines provide investors an opportunity to take stakes in existing telecom operations. 2.2 Government Initiatives The Government has taken the following main initiatives for the growth of the Telecom Sector: All telecom services have been opened up for free competition for unprecedented growth 217 (Information Technology Agreement) ITA-I items are at zero Customs Duty. Specified capital goods and all inputs required to manufacture ITA-I, items are at zero Customs Duty Availability of low cost mobile handsets The international Long Distance Services (ILDS) opened with effect from April 2002. Calling Party Pays (CPP) regime was implemented with effect from 1st May Guidelines for Unified Access Service License regime were issued in November 2003, 27 licenses out of 31 Basic Service Licenses were converted to Unified Access Service Licenses In April 2004, license fee for Unified Access Service Providers (UAS) was reduced by 2 per cent License fee for infrastructure Provider-II reduced from 15 per cent to 6 per cent of the Adjusted Gross Revenue and spectrum charges between 2 to 4 per cent in June 2004 Entry fee for NLD licenses was reduced to Rs. 2.5 Crore from Rs. 100 Crore. Entry fee for ILD reduced to Rs. 2.5 Crore from Rs. 25 Crore Lease line charges have been reduced to make the bandwidth available at competitive prices to facilitate growth in IT enabled services One India plan i.e. single tariff of Re. 1/-per minute to anywhere in India was introduced from 1st March 2006 by the Public Sector Undertakings. This tariff was emulated by most of the private service providers also. This scheme has led to death of distance in telecommunication and is going to be instrumental in promoting National Integration further

 The robust telecom network has also facilitated the expansion of BPO industry that is having 500,000 employees now and adding 400 employees per day. Annual license fee for National Long Distance (NLD), International Long Distance (ILD), Infrastructure Provider-II, VSAT commercial and Internet Service Provider (ISP) with internet telephony (restricted) licenses was reduced to 6 per cent of Adjusted Gross Revenue (AGR) with effort from Jan 2006. The Governments policy is neutral on use of technology by telecom service providers subject to availability of scarce resources such as spectrum etc. Licence Fees 6-10 per cent of Adjusted Gross Revenue (AGR) 2.3 Foreign Direct Investment Policy Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with the telecom manufacturing segment in 1991 - when India embarked on economic liberalisation. FDI is defined as investment made by non-residents in the equity capital of a company. For the telecom sector, FDI includes investment made by Non-Resident Indians (NRIs), Overseas Corporate Bodies (OCBs), foreign entities, Foreign Institutional Investors (FIIs), American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) etc. Present FDI Policy for the Telecom sector: In Basic, Cellular Mobile, National Long Distance, International Long Distance, Value Added Services and Global Mobile Personal Communications by Satellite, FDI is limited to 49 per cent (under automatic route) subject to grant of licence from the Department of Telecommunications and adherence by the companies (who are investing and the companies in which investment is being made) to the licence conditions for foreign equity cap and lock-in period for transfer and addition of equity and other license provisions. Foreign Direct Investment up to 74 per cent permitted, subject to licensing and security requirements for the following: Internet Service (with gateways) Infrastructure Providers (Category II) Radio Paging Service FDI up to 100 per cent permitted in respect to the following telecom services: ISPs not providing gateways (Both for satellite and submarine cables) Infrastructure Providers providing dark fibre (IP Category I) Electronic Mail Voice Mail The above is subject to the following conditions: FDI up to 100 per cent is allowed subject to the condition that such

companies would divest 26 per cent of their equity in favour of Indian public within 5 years, if these companies are listed in other parts of the world. The above services would be subject to licensing and security requirements, wherever required. Proposals for FDI beyond 49 per cent shall be considered by Foreign Investment Promotion Board (FIPB) on a case-to-case basis. In the manufacturing sector 100 per cent FDI is permitted under the automatic route. In Basic, Cellular Mobile, paging and Value Added service, and Global Mobile Personal Communications by Satellite, FDI is permitted up to 49 per cent (under automatic route) subject to grant of license from Department of Telecommunications Foreign direct investment up to 74 per cent permitted, subject to licensing and security requirements for the Internet Service (with gateways), Infrastructure Providers (category-II), Radio Paging Service FDI up to 100 per cent permitted in respect of ISPs not providing gateways (both for satellite and submarine cables), Infrastructure Providers providing dark fibre (IP Category I); Electronic Mail; and Voice Mail FDI up to 49 per cent is also permitted in an investment company, set up for making investment in the telecom companies licensed to operate telecom services. Investment by these investment companies in a telecom service company is treated as part of domestic equity and is not set of against the foreign equity cap. Manufacturing - 100 per cent FDI is permitted under automatic route. FDI is subject to the following conditions FDI up to 100 per cent is allowed subject to the conditions that such companies would divest 26 per cent of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. The above services would be subject to licensing and security requirements, Wherever required. Proposals for FDI beyond 49 per cent shall be considered by FIPB on case to case basis

3. COMPETITION 3.1 Major Players

OVERVIEW

There are three types of players in telecom services: State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications)

Bharat Sanchar Nigam Limited (BSNL)

Name Year of Establishment Company Profile Bharat Sanchar Nigam Limited (BSNL) 2000 Bharat Sanchar Nigam Ltd. is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc. Within a span of five years it has become one of the largest public sector unit in India. It has a network of over 45 million lines Global Presence/ Marketing covering 5000 Network towns with over 35 million telephone connections. Acquisitions / Strategic Alliances Future Prospect BSNL plans to expand its customer base from present 47 millions lines to 125 million lines and infrastructure investment plan to the tune of Rs. 733 crores (US$ 16.67 million) in the next three years.

Mahanagar Telephone Nigam Limited (MTNL)

Name Year of Establishment Company Profile

Mahanagar Telephone Nigam Limited (MTNL) 1986 MTNL was set up by the Government of India to upgrade the quality of telecom services, expand the telecom network, introduce new services and to raise revenue for telecom development needs of India.s key metros. MTNL with a market share of about 13% of the National telecom Network has a customer base of 5.92 million. The Govt. of India currently holds 56.25% stake in the company.

Acquisitions / Strategic Alliances

MTNL has formed a Joint Venture company in Nepal by the name of United Telecom Ltd. (UTL) in collaboration with Telecom Consultants India Limited (TCIL) in 2001 for providing WLL based basic services in Nepal. MTNL has set up its 100% subsidiary .Mahanagar Telephone Mauritius Limited. (MTML) in Mauritius, for providing basic, mobile and international long distance

Videsh Sanchar Nigam Limited (VSNL)

Name Year of Establishment Company Profile Videsh Sanchar Nigam Limited (VSNL) 1986 The Videsh Sanchar Nigam Limited (VSNL) - a wholly Government owned corporation. The company operates a network of earth stations, switches, submarine cable systems, and value added service nodes to provide a range of basic and value added services and has a dedicated work force of about 2000 employees. VSNL's main gateway centers are located at Mumbai, New Delhi, Kolkata and Chennai. Global Presence/ Marketing Network The company has 52 subsidiaries in 21 countries as well as operations across four continents.

Acquisitions / Strategic Alliances

VSNL acquired Nasdaq-listed Teleglobe International Holdings Ltd for $239 million in 2005 Videsh Sanchar Nigam Ltd acquired Tyco Global Network, submarine cable system, for USD 130 million in 2005

Future Prospect

The company plans to expand its wholesale voices services across the EU, to effectively enable enterprise customers and retail voice carriers to connect to India. VSNL is adding its capacity to meet the overwhelming demand for connectivity to India in the wholesale voice

services domain. The company is also offering flexible agreements and charging methods to meet the growing demands of the wholesale voice market

Bharti airtel
Company Profile Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India. Bhartis operations are broadly handled by two companies: the Mobility group and the Infotel group. Global Presence/ Marketing Network The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 94 cities. Acquisitions / Strategic Alliances Bharti Telecom and British Telecom formed a 51%:49% joint venture, Bharti BT Internet for providing Internet services, in 1998 Bharti Tele-Ventures acquired an effective 32.36% equity interest in Bharti Mobile (formerly JT Mobiles), the cellular services provider in Karnataka and Andhra Pradesh circles in 1999

Bharti Telesonic entered into a joint venture, Bharti Aquanet, With SingTel for establishing a submarine cable landing station at Chennai in 2001 A 50:50 joint venture between Bharti and SingTel, to undertake the largest infrastructure project between Singapore and Indian companies in 2001 Future Prospect Bharti Airtel company is planning to set up 3000 more towers as part of enhancing their rural coverage and will now focus on rural and semi-urban areas
.

Reliance Communication
Name Year of Establishment Company Profile Reliance Communications 1999 Reliance Telecom's cellular services are available in 340 towns within its eight-circle footprint. Reliance Infocomm also offered for the first time in India, mobile data services though its RWorld mobile portal. This portal leverages the data capability of the CDMA 1X network. Reliance Infocomm offers a complete range of telecom services covering mobile and fixed line telephony including broadband, national and international long distance services, data

services and a wide range of value added services and applications aimed at enhancing productivity of enterprises and individuals. Global Presence/ Marketing Network Reliance Communications has IP-enabled connectivity infrastructure comprising over 150,000 kilometers of fiber-optic cable systems in India, the US, Europe, Middle East, and the Asia Pacific region. Acquisitions / Strategic Alliances International wholesale telecommunications service provider, FLAG Telecom amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocomm in 2004

Tata Teleservices
Name Year of Establishment Company Profile Tata Teleservices 1996 Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way

conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services. Global Presence/ Marketing Network Tata Teleservices has presence in across 19 circles that includes Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal. Acquisitions / Strategic Alliances Tata Teleservices has acquired Hughes Tele.com (India) Limited [now renamed Tata Teleservices (Maharashtra) Limited] in 2002 Future Prospect The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime.

Vodafone
Vodafone Acquired majority stake in Hutch Essar in India, by buying out complete stake of Hutch in 2007, Essar is still minority stakeholder in company
Company Profile

Name Year of Establishment

Vodafone Essar in India is a subsidiary of

Vodafone Group Plc and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular licence for Mumbai. Vodafone Essar now has operations in 16 circles covering 86% of India's mobile customer base, with over 45.78 million customers. Vodafone Essar, under the Hutch brand, has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the country' and the 'Most Creative and Most Effective Advertiser of the Year'. It has operations in 25 countries across 5 Global Presence/ Marketing continents and 40 Network partner networks with over 200 million customers worldwide. Acquisitions / Strategic Alliances Future Prospect Vodafone Essar is expecting to touch over 35 million customers across 400,000 shops and thousand of hutchs own employees along with employees of its business associates.

Idea
Name Year of Establishment Company Profile Idea 1995 Idea Cellular is part of the Aditya Birla Group, which is India's first truly multinational corporation. Aditya Birla Nuvo Ltd. holds 35.7 per cent, Birla TMT Holdings Ltd. 44.9 per cent, Grasim 7.5 per cent, and Hindalco 10.1 per cent in Idea.

Global Presence/ Marketing Has a customer base of over 17 million, IDEA Network Cellular has operations in Delhi, Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UPWest, Himachal Pradesh and Kerala.

Acquisitions / Strategic Merged with Tata Cellular Limited in 2001, Alliances thereby acquiring original license for the Andhra Pradesh Circle Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chattisgarh) Circlein 2001 In 2004 acquired Escotel, incumbent cellular service provider in Haryana, UP(W) & Kerala and new licensee in HP Acquired Escorts Telecommunications Limited (subsequently renamed as Idea Telecommunications Limited)

in 2006 Merger of seven subsidiaries with Idea Cellular Limited in 2007

Future Prospect

Idea also plans to enter rural and neglected circles as a strategy to gain subscribers. Other advancements in the telecom industry will help it cut costs - use of e-mail to send bills to customers; sharing cell sites; smaller base transmission stations that will mean lesser infrastructure requirements and expenses and independent tower operators. Along with its plan to go for a national long distance licence, it will also look at international long distance in the near future.

4.

CHALLENGES AND OPPORTUNITIES

4.1 Opportunities The telecom sector has been one of the fastest growing sectors in the Indian economy in the past 4 years. This has been witnessed due to strong competition that has brought down tariffs as well as simplification of policy environment that has promoted healthy competition among various players.. The mobile sector alone has been growing rapidly and has emerged as the fastest growing market in the whole worlds. Currently of a size nearing 70 million (GSM and CDMA), this sector is expected to reach a size of nearly 200 million subscribers by financial year 2008. The government has eased the rules regarding inter circle and intra circle mergers. This has led to a slew of mergers and acquisitions in the recent past. Also as the sector is moving

closer to maturity, further consolidation is a reality and this will lead to the survival of more profitable players in this segment In order to further promote the use of Internet in the country the government is taking proactive steps to develop this sector with the help of the various players in this segment. For this purpose, the use of broadband technology is being mooted and this will go a long way in improving the productivity of the Indian economy as well as turn out to be the next big opportunity for telecom companies after the mobile communications segment Non-voice services and VAS are the gold mines. The big takeoff is expected with the rollout of 3G services in early 2007, once the spectrum issues are sorted out. Internet users base fast reaching near the English speaking population base. Local language and content required for further growth Infrastructure equipment cost is down to a fraction of what prevailed just a few years ago. Operators can plan better expansion plan now Increased viability for the operators to expand to semi-urban and rural markets, hence, accelerate growth further Its not without reason that India is tipped to be the worlds third-larges economy by 2050! No wonder if it happens much earlier Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates. At a time when global telecom majors are struggling to cope with their losses and the rollout of 3G networks, which has been a non-starter for close to a year now; India, with its telecom success story, represents an attractive and lucrative destination for investmen.

COMPANY PROFILE In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea. Then Idea set sights on RPGs operations in Madhya Pradesh which was successfully acquired, helping Batata have a million subscribers, and the licence to be the fourth operator in Delhi was clinched. In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians were on the companys network. In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And Idea was left only with one promoter, the AV Birla group. When the companys stock listed on the bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less than three years, the subscriber numbers have more than quadrupled. The public issue was oversubscribed 50 times and raised Rs 2,450 crore.In June 2008, Idea Cellular bought out BK Modis stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners for over Rs 2,000 crore. In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea. Then Idea set sights on RPGs operations in Madhya Pradesh which was successfully acquired, helping Batata have a million subscribers, and the licence to be the fourth operator in Delhi was clinched. In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians were on the companys network. In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And Idea was left only with one promoter, the AV Birla group. When the companys stock listed on the bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less than three years, the subscriber numbers have more than quadrupled. The public issue was oversubscribed 50 times and raised Rs 2,450 crore.In June 2008, Idea Cellular bought out BK Modis stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka

circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners for over Rs 2,000 crore. Key People Board of Directors Mr. Kumar Mangalam Birla (Chairman) Smt. Rajashree Birla Mr. M.R. Prasanna Mr. Saurabh Misra Mr. Sanjeev Aga (Managing Director) Mr. Arun Thiagarajan Ms. Tarjani Vakil Mr. Mohan Gyani Mr. Biswajit Anna Subramanian Mr. Gian Prakash Gupta Management Team Corporate Leadership Team Mr. Sanjeev Aga, Managing Director Mr. Anil J. Jhala, Chief Financial Officer Mr. Anil K. Tandan, Chief Technology Officer Mr. Prakash K. Paranjape, Chief Information Officer Mr. Pradeep Shrivastava, Chief Marketing Officer Mr. Amar Babu R K, Chief Service Delivery Officer Mr. Vinay K. Razdan, Chief Human Resource Officer Mr. Rajat K. Mukarji, Chief Corporate Affairs Officer Mr. Rajesh K. Srivastava, Chief Materials & Procurement Officer Mr. Ambrish Jain, Chief Operating Officer, Corporate Mr. Himanshu Kapania, Chief Operating Officer, Corporate Circle Heads Mr. Iyer Subbaraman S., Chief Operating Officer, Andhra Pradesh Mr. Rajendra Chourasia, Chief Operating Officer, Delhi & NCR Mr. Gururaj D. Kulkarni, Chief Operating Officer, Gujarat Mr. Cherian Peter, Vice President - Operations, Haryana & Himachal Pradesh Mr. T. G. B. Ramakrishna, Chief Operating Officer, Kerala Mr. S. Sashi Shankar, Chief Operating Officer, Madhya Pradesh & Chattisgarh Mr. P. Lakshminarayana, Chief Operating Officer, Maharashtra & Goa Mr. Virad Kaul, Chief Operating Officer, Uttar Pradesh (West)

Mr. Subodh K. Srivastav, Vice President - Operations, Uttar Pradesh (East) Mr. Puneet Krishnan, Vice President - Operations, Rajasthan 3

Customer service The company has its retail outlets under the "My Idea" banner. The company has also been the first to offer flexible tariff plans for prepaid customers]. It also offers GPRS services in urban areas. Idea Cellular won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya GlobalConnect Customer Responsiveness Awards 2010 [citation needed]. Holding Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each. Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecommunications (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same circle and Tata Indicom was already operating in Mumbai when Idea filed for its licence. The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying that they would exit Idea but only for a good price. On 10 April 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT holdings Private Ltd., an AV Birla family-owned company. Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia based Axiata controls a 14.99% stake in the company. 3G

On 19 M 2010, t 3G spect aucti n in India ended. Idea paid 5768.59 crores for spectrum in 11 circles. The circles it will provide 3G in are Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh (East and Uttar Pradesh (West .[4] On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and Madhya Pradesh.[5] The launch cities were Ahmedabad, Shimla and Indore. This makes Idea the si th private operator (ei hth overall to launch its 3G services in the country followingTata Docomo, Reliance Communications, Airtel, Aircel and Vodafone. Idea currently supports up to 21.1 Mbps over 2G speeds of 256 Kbps. However, different handsets support different speeds, from 384 Kbps, 3.6 Mbps, 7.2 Mbps or 21.1 Mbps. Speeds also depend on the 3G plan/recharge that users opt for.[6] The operator announced that IDEA 3G services will be available in 200 towns of 11 3G circles by mid-April 2011, progressively growing at the rate of ten towns per day to cover 750 towns by mid-2011 and 4000 towns by the end of 2012. [edit] G Coverage Ideas 3G service is currently available in the following cities in 11 telecom circles: Source: [1] Telecom Circle State/Region Andhra Pradesh Andhra Pradesh Gujarat Haryana Himachal Pradesh Jammu & Kashmir Madhya Pradesh Gujarat Haryana No of Town 0 2 8 Ahmedabad, Daman Ambala, Bhiwani, Hansi, Hisar, Jhajjar, Panipat, Rewari, Rohtak Shimla, Baddi, Mandi, Sundernagar, Dharamshala Cities/Towns

Himachal Pradesh 5 Jammu & Kashmir Chhattisgarh

0 Indore, Bhopal, Gwalior Nagpur, Nashik, Pune Ponda, Panaji, Margao Delhi Kolkata Allahabad, Azamgarh, Jhansi, Kanpur,

Madhya Pradesh 3 0 3 3 0 1 1 6

Maharashtra and Maharashtra Goa Goa Punjab Delhi Kolkata Uttar Pradesh Punjab Delhi Kolkata

Eastern Uttar

(East)

Pradesh

Lucknow, Sitapur

Excluding Mumbai Subscriber base Idea's subscriber base as at the end of January 2011 according to the [2] is as follows
y y y y y y y y y y y y y y y y y y y y y y

Maharashtra and Goa - 12,075,220 Madhya Pradesh and Chhattisgarh - 8,401,422 Andhra Pradesh - 7,831,260 Kerala - 6,398,170 Kolkata -10,001,804 Gujarat - 6,632,034 Uttar Pradesh (West) & Uttarakhand - 7,361,534 Delhi - 3,609,746 Haryana - 2,847,079 Uttar Pradesh (East) - 4,935,224 Rajasthan - 2,823,910 Himachal Pradesh - 479,882 Mumbai - 1,822,280 Bihar & Jharkhand - 4,280,626 Tamil Nadu & Chennai - 1,202,343 Orissa - 985,737 Punjab (Spice) - 4,160,189 Karnataka (Spice) - 3,775,443 West Bengal - 1,728,308 Assam - 206,140 Jammu & Kashmir - 93,072 North East India except Assam - 128,807

Totalling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India. Competitors Idea competes with 14 other mobile operators throughout India. They are Aircel, Airtel Cheers Mobile, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile, Reliance Communications, S Tel, Tata DoCoMo, Tata Indicom, Uninor, Videocon, Virgin Mobile and Vodafone. History - Idea Cellular We were incorporated as Birla Communications Limited on March 14, 1995 and granted a certificate of commencement of business on August 11, 1995. Our registered office was in Mumbai, Maharashtra.

Our name was changed to Birla AT&T Communications Limited on May 30, 1996following the execution of a joint venture agreement dated December 5,1995 between AT&T Corporation and Grasim IndustrieS Limited pursuant to which the Aditya Birla Group held 51% of our Equity Share capital and AWS Group held 49% of our Equity Share capital. Our registered office was transferred from Industry House, 1st Floor, 159 Church Gate Reclamation, Mumbai 400 020, Maharashtra to SumanTower, Plot No. 18, Sector 11, Gandhinagar 382011 Gujarat on October 22, 1996. With effect from January 1, 2001 following our merger with Tata Cellular Limited the joint venture agreement between AT&T Corporation and Grasim Industries Limited dated December 5, 1995 was replaced by a shareholders agreement dated December 15, 2000 entered into between Grasim Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited on behalf of the Tata Group and AT&T Wireless Services Inc.on behalf of the AWS Group following which our name was changed to Birla Tata AT&T Limited on November 6, 2001. Consequent to the introduction of the Idea brand, our name was changed to Idea Cellular Limited on May 1, 2002. The AWS Group exited from the Company on September 28, 2005 by selling 371,780,740 Equity Shares of the Company, which constituted 50% of the holding of AT&T Cellular Private Limited in our equity share capital, to ABNL and by transferring the remaining 371,780,750 Equity Shares to Tata Industries Limited. The Tata Group ceased to be a shareholder of the Company on June 20,2006 when Tata Industries Limited and Apex Investments (Mauritius) Holding Private Limited (formerly known as AT&T Cellular Private Limited) sold all their shares in the Company to the Aditya BirlaGroup. On October 26, 2006, P5 Asia Investments (Mauritius) Limited (P5Asia) acquired 14.60% of our Equity Share capital. Under a Governance and Exit Rights Agreement dated October 23, 2006 between P5 Asia, ABNL and Birla TMT, so long as an initial public offering has notoccurred and P5 Asia holds no less than 10% of our Equity Shares,ABNL and Birla TMT are required to procure that (a) our Company and its Subsidiaries shall not take or pursue any of the following actions without P5 Asia s prior consent(such consent to be obtained in a board and/or shareholders resolution) including in respect of: (i) any merger with, acquisition of, or amalgamation or consolidation with another company or business; (ii) assuming or permitting to exist any borrowings or indebtedness in the nature of borrowings if the amount of all such borrowings of our Company and its Subsidiaries would exceed Rs. 6,800 million (iii) entering into a new line of business. (iv) increasing our authorized or issued share capital; or (v) entering into a joint venture and (b) our Company makes available to P5 Asia certain financial information relating to our Company and its Subsidiaries such as monthly management accounts, quarterly unconsolidated balance sheet and profit and loss account and the annual audited consolidated balance sheets and profit and loss accounts. P5 Asia also has a right to appoint one director to our Board so long as it holds at least 10% of our total issued and outstanding Equity Shares. Mr. Biswajit Subramanian has been appointed to our Board by P5 Asia pursuant to the exercise of the above right. In addition, any IPO of our Equity Shares requires P5 Asias written consent, and, further, in any such IPO, P5 Asia hasthe right to offer for sale such number of Equity Shares representing up to 10% of the total Equity Shares which are held by it. By itsletters dated December 2, 2006 to ABNL and Birla TMT, P5 Asia hasgiven its written consent for the Issue and has

confirmed that it does not intend to offer for sale any of the Equity Shares held by it in such Issue. We, either directly or through our Subsidiaries, provide mobile services in the Andhra Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra and Uttar Pradesh (West) Circles, and have recently launched services and as such are in the process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and Himachal Pradesh Circles pursuant to licenses issued by the DoT. MAJOR EVENTS The chronology of key events of the Company from incorporation is set out below: 1995: Incorporated as Birla Communications Limited Obtained licenses for providing GSM-based services in the Gujarat and Maharashtra Circles following the original GSM license bidding process 1996: Changed name to Birla AT&T Communications Limited following joint venture between Grasim Industries and AT&T Corporation 1997: Commenced operations in the Gujarat and Maharashtra Circles

1999: Migrated to revenues share license fee regime under New Telecommunications Policy (NTP)

2000: Merged with Tata Cellular Limited, thereby acquiring original license for the Andhra Pradesh Circle 2001: Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited 2001:

Obtained license for providing GSM-based services in the Delhi Circle following the fourth operator GSM license bidding process 2002: Changed name to Idea Cellular Limited and launched Idea brand name . Commenced commercial operations in Delhi Circle . Reached the one million subscriber mark 2003: Reached the two million subscriber mark 2004: Completed debt restructuring for the then existing debt facilities and additional funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited (subsequently renamedas Idea Mobile Communications Limited) Reached the four million subscriber mark First operator in India to commercially launch EDGE services 2005: -Reached the five million subscriber mark -Turned profit positive -Won an award for the Bill Flash service at the GSM Association Awards in Barcelona, Spain Sponsored the International Indian Film Academy Awards -Sponsored the International Indian Film Academy Awards

2006: -Became part of the Aditya Birla Group subsequent to the TATA Group transferring its entire shareholding in the Company to the Aditya Birla Group -Acquired Escorts Telecommunications Limited (subsequently renamed as Idea Telecommunications Limited) -Restructuring of debt

-Launch of the New Circles -Reached the 10 million subscriber mark -Received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle. -Received Letter of Intent from the DoT for a new UAS License for the Bihar -Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya -Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for the consideration of Rs. 100 million. 2007 -Won an award for the CARE service in the Best Billing or CustomerCare Solution at the GSM Association Awards in Barcelona, Spain -Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity Shares on the Bombay Stock Exchange and theNational Stock Exchange -Merger of seven subsidiaries with Idea Cellular Limited -Reached the twenty million subscriber mark

2008 - Idea Cellular Ltd has informed that the Board of Directors of theCompany at its meeting held on October 20, 2008, inter alia, has appointed the following persons as Directors on the Board of the Company: 1. Mr. R C Bhargava - Independent Director (Additional Director) 2. Mr. P Murari - Independent Director - (Additional Director) 3. Dr. Hans Wijayasuriya - Non Executive Director (Nominee of TM International Bhd). -Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West Bengal, Orissa, Kolkata, Assam, North East and Jammu &Kashmir -Acquired Spice Communications with the operating circles of Punjab and Karnataka -Launched services in Mumbai metro in the largest single metro city launch, ever -Launched services in Bihar 2009 -Subscriber base as on December 31, 2009: 57,611,872

-Idea becomes a pan-India operator -Emerging Company of the Year - fastest growing mobile operator in the worlds fastest growing telecom market

Award and achievement The company has its retail outlets under the "My Idea" banner. The company has also been the first to offer flexible tariff plans for prepaid customer. It also offers GPRS services in urban areas Idea Cellular won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya GlobalConnect Customer Responsiveness Awards 2011.

Vision:
One of the most common Vision statements Ive come across is to be the most profitable company or to be the #1 in the category.

Mission
Our circles The Indian telecommunications market for mobile services is divided into 23 Circles. There are four metropolitan Circles, covering the cities of Mumbai, Delhi, Kolkata and Chennai, and 19 Circles classified by theGovernment as category A, category B or category C, which cover the rest of India. These classifications are based principally on a Circles revenue generating potential, with metropolitan and category A Circles having the highest revenue potential. Established Circles We operate in the metropolitan Circle of Delhi, the category A Circles of Andhra Pradesh, Gujarat and Maharashtra, and the category B Circles of Haryana, Kerala, Madhya Pradesh and Uttar Pradesh (West). Licenses for the Maharashtra and Gujarat Circles were awarded to us in December 1995, with network rollout and commercial launch achieved in 1997. Subsequently, in January 2000, we merged with Tata Cellular Limited, the mobile operator in the Andhra Pradesh Circle, and integrated its operations into ours byJanuary 2001. In February 2001, we acquired RPG Cellcom Limited, the mobile operator in the Madhya Pradesh Circle, with full integration of this Circle with ours achieved by June 2001. We acquired the license for the Delhi Circle during the fourth mobile license auction in October 2001, with network rollout and

commercial launch by November 2002. Escotel Mobile Communications Private Limited (Escotel), which we acquired in January 2004, was awarded the originallicenses in the Circles of Haryana, Uttar Pradesh (West) and Kerala. We re-branded these Circles and integrated them with ours by June 2004. New Circles In connection with the acquisition of Escotel, we also acquired Escorts Telecommunications Limited (Escorts), which was awarded licenses for the New Circles. Due to certain existing license conditions we were unable to complete the transfer of shares of Escorts until June 2006. However, we ensured that Escorts met the first phase of network requirements for these New Circles in June 2005 in accordance with the relevant licenses (as amended following the payment of a penalty by us on behalf of Escorts). Following significant investment by us in the roll-out of the network in the New Circles, amounting to approximately Rs. 4,678 million upto September 30, 2006, we were able to achieve full commercial launch of mobile services in the New Circles between September and November 2006 in a manner which also met the network roll-out requirements of the licenses which were to be completed by June 2007. Area of operation Idea's subscriber base as at the end of January 2011 according to the is as follows
y y y y y y y y y y y y y y y y y y y y y

Maharashtra and Goa - 12,075,220 Madhya Pradesh and Chhattisgarh - 8,401,422 Andhra Pradesh - 7,831,260 Kerala - 6,398,170 Kolkata -10,001,804 Gujarat - 6,632,034 Uttar Pradesh (West) & Uttarakhand - 7,361,534 Delhi - 3,609,746 Haryana - 2,847,079 Uttar Pradesh (East) - 4,935,224 Rajasthan - 2,823,910 Himachal Pradesh - 479,882 Mumbai - 1,822,280 Bihar & Jharkhand - 4,280,626 Tamil Nadu & Chennai - 1,202,343 Orissa - 985,737 Punjab (Spice) - 4,160,189 Karnataka (Spice) - 3,775,443 West Bengal - 1,728,308 Assam - 206,140 Jammu & Kashmir - 93,072

North East India except Assam - 128,807

Totaling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India.

Background
Idea Cellular Ltd Industry :Telecommunications - Service Provider Incorporation Year 1995 Chairman Kumar Mangalam Birla Managing Director Himanshu Kapania Company Secretary Pankaj Kapdeo Auditor Deloitte Haskins and Sells Registered Office Suman Tower Plot No 18, Sector 11, Gandhinagar, 382011, Gujarat Telephone 91-79-66714000 Fax 91-79-23232251 E-mail shs@idea.adityabirla.com Website http://www.ideacellular.com Face Value (Rs) 10 BSE Code 532822 BSE Group A NSE Code IDEA Bloomberg IDEA IN Reuters IDEA.BO ISIN Demat INE669E01016 Market Lot 1 Listing Mumbai,NSE Financial Year End 3 Book Closure Month Sep AGM Month Sep Registrar's Name & Address Bigshare Services Pvt Ltd, E-2/3 Ansa Indl Est, Saki Vihar Road, Sakinaka Andheri(E), Mumbai 400072. 91-22-28470652/53 91-22-28475207 Directors Idea Cellular Ltd Industry :Telecommunications - Service Provider Designation Name Chairman Kumar Mangalam Birla Director Rajashree Birla

Remunerations 80,000.00 80,000.00

Director Director Director Director Director Director Company Secretary Director Director Director Nominee Alternate Director Idea Cellular Ltd

Sanjeev Aga Arun Thiagarajan Tarjani Vakil Mohan Gyani Biswajit Anna Subramanian Gian Prakash Gupta Pankaj Kapdeo R C Bhargava P Murari Rakesh Jain Juan Villalonga Navarro Shridhir Sariputta Hansa Wijayasuriya

79,430,000.00 130,000.00 140,000.00 80,000.00 110,000.00 20,000.00 40,000.00 80,000.00 90,000.00

Industry :Telecommunications - Service Provider (Rs in Crs) Subsidiary Name Year No Of Shares Face Value (Unit Curr.) Investment Cost Holding (%) Subsidiary's Year end NP in Holding Co a/cs (PY) NP not in Holding Co a/cs (PY) NP in Holding Co a/cs (CY) NP not in Holding Co a/cs (CY) Equity Subscribed Subsidiary 's Reserves Fixed Assets Net Current Assets Sales Turnover Profit After Tax Product1 Product2 Carlos Tower Ltd Mar 10 50000 10 0.05 100.00 201003 0.00 0.00 0.00 -0.01 0.05 -0.01 0.00 0.00 0.00 -0.01 -

Financial analysis Company at a Glance Idea Cellular Ltd Industry :Telecommunications - Service Provider (Rs in Crs)

Financial Performance Year End Mar 10 Mar 09 Mar 08 Mar 07 Mar 06

Latest Results (Rs Cr) PeriodEnded Sales Jun 11 Jun 10 Var [%

Equity

3,299. 3,100. 2,635. 2,592. 2,259 84 10 36 86 .53 11,457 11,294 3,542. 2,179. 685.5 .23 .42 27 15 3 27,843 20,781 33,096 26,946 0.00 .42 .93 .03 .27 17,983 18,873 10,057 6,429. 4,084 .64 .78 .03 66 .13

4,479.6 3,626.4 23.5 8 1 3 0.00 0.00

Networth Enterprise Value Capital Employed

Other Income 0.00 PBIDT

1,016.9 36.0 747.70 1 1 810.73 671.23 20.7 8 48.8 8

PBDT

22,834 15,562 13,204 9,202. 4,650 Gross Block .40 .75 .30 58 .92 Sales 11,850 9,857. 6,719. 4,366. 2,007 .24 08 99 40 .07

PBIT PBT

420.85 282.67

214.67 206.20 4.11 149.73 201.64 25.7 4 0.00 0.00 0.00

RPAT

Other Income 587.38 477.37 199.05 46.13 13.84 PBIDT 3,283. 3,248. 2,462. 1,521. 735.1 64 02 58 84 6 2,719. 2,329. 1,993. 1,180. 476.0 93 72 62 86 4 1,732. 2,005. 1,585. 387.6 850.04 44 16 82 2 1,168. 1,086. 1,116. 509.06 128.5 EPAT

PBDT

APAT

149.73 201.64 25.7 4 745.79 666.67 11.8 7

PBIT PBT

CP

Shareholding Pattern

73 RPAT

86

86

1,053. 1,001. 1,044. 125.6 502.06 66 21 36 0 992.25 821.54 1,006. 124.0 493.76 15 8

(AS ON Jun 2011) Foreign

Shares

[%]

1,418,925,6 42.9 03.00 5 263,853,42 7.99 3.00 0.00 0.00

APAT

Institutions Govt Holding Non Promoter Corp. Hold. Promoters

CP

2,604. 2,244. 1,921. 1,173. 473.1 86 07 12 86 4

Rev. Earnings 71.27 68.66 79.03 72.80 69.95 in FE Rev. Expenses 74.73 60.49 31.25 23.30 8.04 in FE Book Value (Rs) EPS (Rs.) 34.59 36.37 13.44 8.40 3.19 3.23 0.00 0.00 3.96 0.00 0.00 1.94 0.00 0.00 3.03 0.56 0.00 0.00

17,075,873. 0.52 00 1,520,679,0 46.0 47.00 3 83,222,710. 2.52 00 3,303,756,6 100. 56.00 00

Public & Others

Totals

Dividend (%) 0.00 Payout (%) 0.00

Market Data (As on Monday, August 01, 2011 ) Price (Rs) 98.25 52 W H/L(Rs) Lat. P/E 98.6 / 55.65 40.93 75 3303. 94

Ratio Analysis Debt-Equity 0.62

Lat. EPS(Rs)

2.4

Current Ratio 0.97 Invtry Turnover Debtors Turnover 265.02

Mkt. 3246 Lat.Eqty Cap.(Rs Cr) 1.2 (Rs Cr) Lat. BV(Rs) 37.18

Div. Yield 0 (%)

31.20
The image cannot be display ed. Your computer may not hav e e nough me

Interest Cover 3.07 PBIDTM (%) 27.71 PBDTM (%) 22.95 APATM (%) 8.89

ROCE (%) RONW (%)

9.20 8.95

EV/EBIDTA 8.48 Rate of Growth (%) Net Worth Sales PAT M Cap 1.44 20.22 5.24 38.92

ShareHolding Pattern Idea Cellular Ltd Industry :Telecommunications - Service Provider Top of Form Ownership Pattern as on 30-06-2011 Foreign (Promoter & Group) Indian (Promoter & Group) Total of Promoter Non Promoter (Institution) Non Promoter (Non-Institution) Total Non Promoter Total Promoter & Non Promoter Custodians(Against Depository Receipts) Grand Total Fund Holding Idea Cellular Ltd Industry :Telecommunications - Service Provider Fund Mkt Mkt Chang % No of Value Value e in Chang Shares Jun May Value e Jun 2011 2011 2011 Benchmar 0.23 0.60 -0.37 -61.67 28463 k Mutual Fund Birla Sun 5.76 8.30 -2.54 -30.60 722482 Life No of Shares 0 1520679047 1520679047 598701815 1184375794 1783077609 3303756656 0 3303756656 % Share Holding 0.0000 46.0288 46.0288 18.1218 35.8494 53.9712 100.0000 0.0000 100.0000 Share Holder 0 5 5 285 365961 366246 366251 0 366251 Demat Share 0 1520679047 1520679047 598701815 1184361116 1783062931 3303741978 0 3303741978

No of Shares May 2011 87742

Change in No of Shares -59279

% Chang e -67.56

1229064

-506582

-41.22

Mutual Fund BNP Paribas Mutual Fund Canara Robeco Mutual Fund DSP BlackRock Mutual Fund Edelweiss Mutual Fund Franklin Templeton Mutual Fund ICICI Prudential Mutual Fund Kotak Mahindra Mutual Fund L&T Mutual Fund LIC NOMURA Mutual Fund Mirae Asset Mutual Fund SBI Mutual Fund Sundaram Mutual Fund Tata Mutual Fund Taurus

0.61

0.00

0.61

76589

76589

3.53

2.93

0.60

20.48

450000

433614

16386

3.78

32.28

24.03

8.25

34.33

4047322

3511278

536044

15.27

0.00

0.71

-0.71

104769

-104769

286.3 1

205.4 0

80.91

39.39

3591295 9

3001047 1

590248 8

19.67

52.28

70.22

-17.94

-25.55

6554982

1040285 7

384787 5 -445

-36.99

1.20

1.03

0.17

16.50

150000

150445

-0.30

0.00

0.35

-0.35

50650

-50650

2.49

2.14

0.35

16.36

312500

312500

0.00

3.51

3.09

0.42

13.59

440549

451306

-10757

-2.38

28.30

0.00

28.30

3548562

354856 2 387191 8 -7

69.02

32.74

36.28

110.81

8654970

4783052

80.95

2.89

2.65

0.24

9.06

388996

389003

-0.00

1.05

0.00

1.05

131170

131170

Mutual Fund UTI Mutual Fund

0.00

5.40

-5.40

800000

-800000

Financial Overview Idea Cellular Ltd Industry :Telecommunications - Service Provider (Rs in Crs)

Equity Paid Up Networth Capital Employed Gross Block Net Working Capital ( Incl. Def. Tax) Current Assets ( Incl. Def. Tax) Current Liabilities and Provisions ( Incl. Def. Tax) Total Assets/Liabilities (excl Reval & W.off) Gross Sales Net Sales Other Income Value Of Output Cost of Production Selling Cost PBIDT PBDT PBIT PBT PAT CP Revenue earnings in forex Revenue expenses in forex Capital earnings in forex Capital expenses in forex Book Value (Unit Curr) Market Capitalisation CEPS (annualised) (Unit Curr) EPS (annualised) (Unit Curr) Dividend (annualised%) Payout (%) Cash Flow From Operating Activities

201003 3299.84 11457.23 17983.64 22834.4 -161.13 4290.4 4451.53 22435.17 11850.24 11850.24 587.38 11850.24 9109.77 406.69 3283.64 2719.93 1732.44 1168.73 1053.66 2604.86 71.27 74.73 0 2025.21 34.59 21597.45 7.89 3.19 0 0 1985.13

Cash Flow From Investing Activities Cash Flow From Financing Activities Rate of Growth (%) ROG-Net Worth (%) ROG-Capital Employed (%) ROG-Gross Block (%) ROG-Gross Sales (%) ROG-Net Sales (%) ROG-Cost of Production (%) ROG-Total Assets (%) ROG-PBIDT (%) ROG-PBDT (%) ROG-PBIT (%) ROG-PBT (%) ROG-PAT (%) ROG-CP (%) ROG-Revenue earnings in forex (%) ROG-Revenue expenses in forex (%) ROG-Market Capitalisation (%) Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Ratio Inventory Ratio Debtors Ratio Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) CPM (%) APATM (%) ROCE (%) RONW (%) Debtors Velocity (Days) Creditors Velocity (Days) Assets Utilisation Ratio (times) Value of Output/Total Assets Value of Output/Gross Block Segment Finance Idea Cellular Ltd Industry :Telecommunications - Service Provider Top of Form

-1518.55 -2530.57 1.44 -4.72 46.72 20.22 20.22 29.97 -0.15 1.1 16.75 -13.6 7.53 5.24 16.08 3.8 23.54 38.92 0.62 0.55 0.97 0.62 265.02 31.2 3.07 27.71 14.62 22.95 21.98 8.89 9.2 8.95 12 86 0.53 0.62

Particulars REVENUE Revenue from Operations Less/Add : Inter Segment Revenues Total Segment Revenue Add : Other Unallocable Income/Exp. Other Income Net Revenue from Operations RESULT Profit/Loss Before Interest & Tax Less : Interest Expense Other Un-allocable Expenditure Add : Other Income Extra-Ordinary Income/Expense Net Profit/Loss Before Tax Income Tax Deferred Tax Net Profit OTHER INFORMATION Segment Assets Unallocated Corporate Assets Total Assets Segment Liabilities Unallocated Corporate Liabilities Total Liabilities Net Assets Capital Expenditure Unallocated Capital Expenditure Total Capital Expenditure Depreciation/Amortisation Unallocated Depn/Amortn. Total Depreciation/Amortisation Non Cash Expenditure Unallocated Non-Cash Exp. Total Non Cash Expenditure Fund Flow Idea Cellular Ltd

201003 (12) 11850.24 1231.64 13081.88 -1231.64 0 11850.24

200903 (12) 9857.08 734.02 10591.1 -734.02 0 9857.08

200803 (12) 6719.99 353.67 7073.66 -353.67 0 6719.99

200703 (12) 4387.33 77.9 4465.23 -77.9 0 4387.33

1340.44 206.32 0 34.61 0 1168.73 0 115.07 1053.66

1537.59 450.73 0 0 0 1086.86 0 76.35 1001.21

1394.5 277.64 0 0 0 1116.86 0 65.13 1044.36

814.16 305.11 0 0 0 509.05 5.94 1.05 502.06

19755.31 2271.36 22026.67 13013.74 -2444.31 10569.43 11457.24 3014.62 0 3014.62 1551.2 0 1551.2 0 0 0

14901.48 7335.88 22237.36 10318.7 624.25 10942.95 11294.41 4800.63 0 4800.63 1242.86 0 1242.86 0 0 0

11894.13 858.32 12752.45 9251.74 -45.31 9206.43 3546.02 5402.31 0 5402.31 876.76 0 876.76 0 0 0

6857.28 1725.41 8582.69 6423.39 -19.85 6403.54 2179.15 2797.62 0 2797.62 671.81 0 671.81 0 0 0

Industry :Telecommunications - Service Provider (Rs in Crs) Year Sources of funds Cash profit Increase in equity Increase in other networth Increase in loan funds Decrease in gross block Decrease in investments Decrease in working capital Others Total Inflow Application of funds Cash loss Decrease in networth Decrease in loan funds Increase in gross block Increase in investments Increase in working capital Dividend Others Total Outflow Cash Flow Idea Cellular Ltd Industry :Telecommunications - Service Provider (Rs in Crs) 201003 Cash Flow Summary Cash and Cash Equivalents at Beginning of the year Net Cash from Operating Activities Cash Flow From Operating Activities Net Profit before Tax & Extraordinary Items Adjustment For Depreciation Interest (Net) Dividend Received P/L on Sales of Assets P/L on Sales of Invest Prov. & W/O (Net) P/L in Forex Fin. Lease & Rental Chrgs Others 2344.43 1985.13 1053.65 1551.2 324.02 0 3.08 -87.87 95.32 0 0 -3.4 Mar 10 4221.14 199.74 0 0 0 2173.68 1561.39 0 8155.95 0 1090.59 1052.95 6012.41 0 0 0 0 8155.95

Total Adjustments (PBT & Extraordinary Items) Op. Profit before Working Capital Changes Adjustment For Trade & 0th receivables Inventories Trade Payables Loans & Advances Investments Net Stock on Hire Leased Assets Net of Sale Trade Bill(s) Purchased Change in Borrowing Change in Deposits Others Total (OP before Working Capital Changes) Cash Generated from/(used in) Operations Interest Paid(Net) Direct Taxes Paid Advance Tax Paid Others Total-others Cash Flow before Extraordinary Items Extraordinary Items Excess Depreciation W/b Premium on Lease of land Payment Towards VRS Prior Year 's Taxation Gain on Forex Exch. Tran Others Net Cash Used in Investing Activities Cash Flow from Investing Activities Investment in Assets : Purchased of Fixed Assets Sale of Fixed Assets capital WIP Capital Subsidy Recd Financial/Capital Investment : Purchase of Investments Sale of Investments Investment Income Interest Received Dividend Received Invest.In Subsidiaires Loans to Subsidiaires Investment in Group Cos Issue of Sh. on Acqu. of Cos Canc. of Invest. in Cos Acq. Acquisition of Companies

1882.35 2936 -88.95 0.11 124.39 -770.88 0 0 0 0 0 0 -14.87 -750.2 2185.8 0 -200.67 0 0 -200.67 1985.13 0 0 0 0 0 0 -1518.55

-3384.32 8.31 0 0 0 1014.87 0 265.2 0 0 0 0 0 0 0

Inter Corporate Deposits Others Net Cash Used in Financing Activities Cash Flow From Financing Activities Proceeds: Proceeds from Issue of shares (incl share premium) Proceed from Issue of Debentures Proceed from 0ther Long Term Borrowings Proceed from Bank Borrowings Proceed from Short Tem Borrowings Proceed from Deposits Share Application Money Cash/Capital Investment Subsidy Loans from a Corporate Body Payments: Share Application Money Refund On Redemption of Debenture Of the Long Tem Borrowings Of the short term Borrowings Of financial Liabilities Dividend Paid Shelter Assistance Reserve Others Net Cash Used in Financing Activities Net Inc/(Dec) in Cash and Cash Equivalent Cash and Cash Equivalents at End of the year

0 577.39 -2530.57

2.34 0 379.4 0 0 0 0 0 0 0 0 -719.91 -1500 0 0 0 0 -2530.57 -2063.99 280.44

Profit & Loss Idea Cellular Ltd Industry :Telecommunications - Service Provider (Rs in Crs)

Year INCOME : Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income EXPENDITURE : Raw Materials Power & Fuel Cost

Mar 10(12) 11,850.24 0.00 11,850.24 587.38 0.00 12,437.62 0.02 968.89

Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit Adjst. below Net Profit P & L Balance brought forward Statutory Appropriations Appropriations P & L Balance carried down Dividend Preference Dividend Equity Dividend % Earnings Per Share-Unit Curr Earnings Per Share(Adj)-Unit Curr Book Value-Unit Curr BS Consolidated Idea Cellular Ltd

563.78 6,012.05 1,390.15 219.09 0.00 9,153.98 3,283.64 563.71 2,719.93 1,551.20 1,168.73 0.00 0.00 115.07 1,053.66 61.41 992.25 -1,529.21 -405.28 0.00 -484.46 -396.37 0.00 0.00 0.00 3.19 34.59

Industry :Telecommunications - Service Provider (Rs in Crs) Year SOURCES OF FUNDS : Share Capital Reserves Total Equity Share Warrants Equity Application Money Total Shareholders Funds Minority Interest Secured Loans Unsecured Loans Total Debt Mar 10 3,301.76 8,026.15 0.00 44.45 11,372.36 0.00 7,316.62 542.68 7,859.30

Total Liabilities APPLICATION OF FUNDS : Gross Block Less: Accumulated Depreciation Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities Key Financial Ratios Idea Cellular Ltd

19,231.66 27,064.66 8,890.68 18,173.98 0.00 546.47 1,130.37 53.64 465.56 289.99 2,853.83 3,663.02 3,844.72 223.26 4,067.98 -404.96 0.00 479.26 693.46 -214.20 19,231.66 3,012.71

Industry :Telecommunications - Service Provider

Mar 10 Key Ratios Debt-Equity Ratio Long Term Debt-Equity Ratio Current Ratio Turnover Ratios Fixed Assets Inventory Debtors Interest Cover Ratio PBIDTM (%) PBITM (%) PBDTM (%) 0.62 0.55 0.97

0.62 265.02 31.20 3.07 27.71 14.62 22.95

CPM (%) APATM (%) ROCE (%) RONW (%) Valuation Ratios Idea Cellular Ltd Industry :Telecommunications - Service Provider

21.98 8.89 9.20 8.95

Price Earning (P/E) Price to Book Value ( P/BV) Price/Cash EPS (P/CEPS) EV/EBIDTA Market Cap/Sales

Mar 10 20.52 1.89 8.29 8.48 1.82

SWOT ANALYSIS

Strengths
D Idea cellular has more than 65 million customers (July 2008). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers. D Other stakeholders in Idea cellular include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. D The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.

Weaknesses
D An often cited original weakness is that when the business was started by adithya birla over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field. D Until recently Idea did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally. D The fact that the Idea has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.

Opportunities
D The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Idea brand, and also provides advertising opportunities in Indian for Google. D Global telecommunications and new technology brands see Idea as a key strategic player in the Indian market. The new iPhone will be launched in India via an Idea distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. D Despite being forced to outsource much of its technical operations in the early days, this allowed Idea to work from its own blank sheet of paper, and to question industry approaches and practices - for example replacing the Revenue-Per-Customer model with a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns. D The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy. D Idea cellular is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.

Threats
D Idea and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Idea business sold it back to Idea, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Idea now moves into the hands of one of its competitors. D The quickly changing pace of the global telecommunications industry could tempt Idea to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market. D Idea cellular could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market.

Idea comes to you from Idea cellular Limited, India's largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Idea cellular since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Idea cellular have been structured into three individual strategic business units (SBU's) - Mobile Services, Idea Telemedia Services & Enterprise Services.