Asia Investor & Analyst Field Trip 2014

Bangladesh
Vivek Sood, CEO

*Real GDP growth and Std Dev

A fast growing resilient

economy

Tunisia

1.7

Morocco

1.5

4.4%

Pakistan

2.1

4.5%

Kenya

1.6

Bangladesh

0.3

Vietnam

0.9

6.4%

Nigeria

1.4

6.5%

Sri Lanka

1.3

6.5%

8th most populous with 167 Mn

people
Density of 1131 / square KM
Median age of 24.3

Domestic consumption driven GDP

Growing per capita income

Strong currency among peers

4.0%

4.8%
6.2%

Inflation correlation with peers

25
20

Stable inflation

15
10
5
0
2004

2005

2006

Bangladesh

2007

2008

Pakistan

2009

2010

2011

Sri Lanka

Source: World Bank

GDP considered for Frontier market only
* 10 Years average from 2004 to 2013

2012

2013

Vietnam

An industry ahead of its

time

Subscriptions (Mn) and Penetration*

113.78

118.49

97.18

85.45

Competitive market of 6 players

68.64

3 players consist 89%

33.2%

37.2%

2011

2012

44.5%

45.7%

2013

Sep'2014

27.5%

99% prepaid with voice dominance,

encouraging data adoption
2010

Widespread network coverage

Real penetration of around 46%

Flagship Digital Bangladesh vision

of Government

Very high and unpredictable tax

regime

* GP own estimation

Subscriber base

An exciting journey of connecting people

5.5 Mn

1 Mn

1997- 99

Prepaid Service
M2M Service

2000 - 02
Best Joint
venture
Enterprise

2003 - 05

2 Mn Subscriber

WAP service

Prepaid product
with PSTN
connectivity

21 Mn

2006 - 08

36.5 Mn

2009 - 11

50.7 Mn

2012 -14

A company bringing magic

of closeness to the mass

Connecting 50+ Mn people

Nationwide robust 2G network

covering 99% of population

45% population under 3G coverage

Largest listed entity of $ 5.5 Bn*

Top line comprising of 1.3% of GDP**

Long term loan of $ 345 Mn

Largest corporate tax payer

Direct and indirect employment of

700k lives
*At Dhaka Stock Exchange as of 24 Nov 2014
** Considered real GDP for 2013

Regulatory landscape

Increasingly consultative approach

Cooperation with other sector

regulators e.g. Bangladesh Bank,
NBR etc.

Collaboration within mobile industry,

and with other important
stakeholders

Long term road map for

predictability and certainty lacking

Corporate governance framework

Shareholders

Board of Directors
Treasury
Committee

Company
Secretary

Audit
Committee

HR
Committee

HSSE
Committee

CEO
Internal Audit
Management Team

Organization

Stakeholders

Recognitions that inspire us

GSMA Award

Brand Award

mBillionth Award

Declaration of Best
Presented Annual Reports
2013 by SAFA & ICAB

Opportunities in a changing
environment

Connecting the unconnected

Growing internet penetration and

new services

Enabler of Mobile Financial Service

Social VAS in agriculture, health &

education

Partnership with Accenture

Strategic priorities going

forward

Achieving no 1 position in Net

Promoter Score (NPS)

Acquiring 50 Mn internet users

Driving efficiency through

performance management and
territory approach

Developing scale in Mobile

Financial Services

Asia Investor & Analyst Field Trip 2014

Bangladesh
Dilip Pal, CFO

Revenue (BDT Bn) and EBITDA Margin

A profitable company

+6.1%

Revenue CAGR (5 yrs) of 9.1%

89.06

91.92

96.62
76.74

74.73

Consistently maintaining high EBITDA margin

Healthy OCF and NPAT margin

APPM stabilizing

49.5%

2010

ARPU (BDT), AMPU, APPM (BDT)

255

254

180

178

165

166

170

2011

2012

2013

54.0%

YTD 2014

36.36

38.2%

38.9%

39.5%

37.6%

41.9%

2010

2011

2012

2013

YTD 2014

36.36
32.25

28.54
165

0.70

0.69

0.69

0.68

0.68

Q2'13

Q3'13

Q4'13

Q1'14

Q2'14

Q3'14

AMPU

50.7%

34.65

243

0.71

ARPU (BDT)

53.3%

OCF (BDT Bn) and Margin

250

240

240

53.4%

APPM (BDT)

EBITDA is before other items

OCF defined as EBITDA before other items, less capex excl spectrum fees
YTD 2014 denotes figures upto September 2014
Deconsolidation of GPIT considered from 2013

Dividend Per Share (BDT) and Yield*

Healthy shareholder return

20.5
66% annualized cumulative return
Attaining more balanced capital structure

12%

12.0

Stated dividend policy

160%

110%
60%
10%

-40%

8%

9.5
3%

2011

2012

2013

2014(Interim)

Relative Market Performance in DSE***

250

20%

230

18%

210

16%

190

14%

170

12%

150

10%

130

8%

110

6%

90

4%

70

2%

50

0%

Feb-13

-90%

9%

Outperforming the market index

Total Shareholder Return**

210%

14.0

4%

2010

260%

14.0

May-13

Aug-13

Nov-13

% of Total Turnover (RHS)

Feb-14

May-14

GP Price

*Considering yearly average closing price of DSE

**Including dividends reinvested
*** Price and index rebased

Aug-14

DSEX

Nov-14

DSE30

Driving revenue growth

Volume growth from untapped

segment

Growth in data subscribers

Higher voice revenue
Contribution from data

Retention of HVU with innovative

value propositions

Youth opportunity capturing VAS

and contents

Adjacent business

Structured effort towards

operational excellence

Cost benchmarking through globally

reputed consultant ATKearney

Learning & synergies at the Telenor

Group level

Opex Margin
42.5%

2010

Robust Opex management process

with focus on granularity

Stable opex margin

39.1%

40.1%

41.3%

2011

2012

2013

YTD 2014 denotes figures upto September 2014

38.0%

YTD 2014

Cluster formation:
Territory Approach

Bangladesh

Thana is the smallest Govt.

administration hub with 50-90 Sq km
Each territory contains on an avg 1-2
thana based on the following:

Size

Area

Region

& business 200 Sq Km Max

Telco POS: 200-250 POS

Territory

Number of BTS: 40-50

Avg Travel Time (E2E): 4 - 5 Hours

9 Region
34 Area

Territory officer and area manager

114 DTR

Similar principle followed in area

formation

222 Territory
9k BTS

Summary

Growth story is intact. Data the main driver.

Grow profitably
Ambition to retain market share

Investment in network for strengthening leadership position

Disclaimer
This presentation includes very high level guidance on the future" These may include, without limitation,
statements relating to our future business development and economic performance, future earnings and cash
flow, our business strategy, regulatory changes, future policy of the Bangladeshi Government relating to the
telecommunications industry in Bangladesh, our competitive position and the effects of competition, and the
amount and nature of our capital expenditures and capital commitments. These guidance represents our
current views with respect to future events and are not a guarantee of future performance. You are cautioned
not to rely on these very high level guiding statements. A number of important factors could cause actual results
or outcomes to differ materially from those expressed in any forward-looking statement.

We have obtained certain market data, industry forecasts and data used in this presentation from market
research, publicly available information, including governmental publications, and industry publications. Industry
publications generally state that the information contained therein has been obtained from sources believed to
be reliable, but that the accuracy and completeness of the information is not guaranteed. While we believe
these industry forecasts and market data are reliable, we have not independently verified this information, and

we make no representation as to the accuracy of this information.

Because the market data included in this presentation is derived from multiple sources, you should not assume
that it has been compiled on a consistent basis. You should exercise caution when comparing market data from
different sources or across different time periods. We make no representation that such market data is accurate
or complete or that it has been compiled or presented on a consistent basis.

Cluster Way of Work

The New Way of Work Regional Approach

National Approach
Looking at the Country

Regional / Cluster
Approach
Granular way of looking into
cluster markets

Unique Economy and Culture

Agro/ Industrial
HH Income 20K+

10%

Agriculture
HH Income 20K+

5%

Remittance
HH Income 20K+

28%

Industrial/trading
HH Income 20K+

53%

Trading/Seaport
HH Income 20K+

9%

Commercial Hub
HH Income 20K+

28%

Agro/Riverine
HH Income 20K+

9%
21

Company Confidential

Grameenphone - Regional Sales Structure

Regions

Areas (3-7 areas per

Region)

Area

Distributor
Few Territories per Area.
The territories are mapped
according to the geography,
volume and POS Numbers.
Each Territory is managed
by Territory officer.

Regions based on
Geography and Business
Volume

Distributors per Area

based on Partner and
Market Profile. The DTR are
3rd Party Partners

Territories
A Territory contains
BTS

Xx BTS
xx Telco POS
xx ERS POS

Cluster Approach Strategy

From National to Granular
Implement a Cluster Approach from Improving our Competitive Positions in the Markets and Grow Revenue &
SIM Market Share in Respective Territories

Indicators

Strategic Dimensions

Drivers

Revenue /
Reload Sales
Main
SIM
Share

Distribution

Gross Add
Network

Active
SIM
Share

Sub Base
Revenue
Market
Share

Cluster
Level
Actions

Communi
cation

Internet
Revenue
MFS

Product

People

Confidential

23

Cluster Strategy
Right Insights, Right Actions
Issues &
GAPs
Desired
Picture &
Targets

Insights &
Analytics
Action
Planning
KPI

Recipe Mapping Regions + HQ

Distribution

Product

Comm./
Visibility

Network

Cluster Level Actions

People

The KPI Flow

POS
Expand

Devices
Reload
Sales

New
Add
Monitored
Regularly to Impact
KPI

Linked with
Performance and
Bonus/Incentive

NPS

Cluster
KPI

Network
KPI

Result Indicators

Distribution

Product/Sub Analysis

Network Investment

Distribution Quality
and Availability

Product / Campaign
Performance

Traffic/Utilization

Industry
Market
Share

Revenue
25

Strong Performance Management & Right Actions

Territory

KPI1

KPI2

KPI2

Trend

Target

Relative

Target

Relative

Trend

Trend

Growth

Relative

Target

Key Insights

Actions
Maintain

POS, Campaigns

Focus: Distribution,
People

Relative

Utilization, Awareness

Focus:
Communication, BTL

Relative

Relative

Network Issues

Fix Network Issues

Relative

Growth

HV Churn

Focus: New Offer,

Micro Campaign

Organization Wide Collaboration to Develop Action

Points

Organizational Collaboration
Keeping Functional & Regional Alignment
Strategic Planning:
1. National War Room
2. Information alignment
3. Region specific Focus
4. Investment
Prioritization &
Profitability Analysis
5. Product &
Communication
Strategy
6. Revenue, RMS, RG
Action & Execution:
1. Regional War Room
2. Performance Mgt
3. Territory specific TM
Planning
4. Focus on Execution
5. Sales, Campaign,
Distribution, RNPS &
Visibility

Some Demonstrations

Cluster Approach KPI Monitoring

Sub

Reload

Sales
Growth

Devices

Internet

MobiCash
Expansion

Distributi
on

Quality

Cluster KPI Focus

Setting Actions

>60
<60

Utilization Category

Cluster Approach Network Utilization

PLAN COMBAT

MAINTAIN
Sites

HIGH FOCUS
All Out Drive
Sites

HIGH FOCUS
All Out Drive
Sites

Drop

Growth

Change in Utilization

Increasing Investment Efficiency by

Focused Activity Planning

Cluster : A
Challenges:

1. Revenue stagnant

Campaign communication

2. Campaign/Product Awareness

Brand Promoter Activity

Results:
Market share Increase

Rural Activation Events

Cluster : B
Challenges:

1. Low Utilization of Network

Segment based campaign Communication

BTS Based event

Results:
Increase in Campaign Takers.
Low BTS utilization sites decreased.

Key Component

Engaging Retailers & Customers

Hype generating
activities in retail
hotspots

MT & Back office

employees visit to
retail

Colorful customer
engagement activities
in flagship channels

Strong Performance Management Culture

Celebrating with Management

Q1 2013: Sylhet

Q2 2013: Dhaka

Q4 2013: Barisal

Q3 2013: Bogra

Q1 2014: Sylhet

Empowerment Territory Level Actions

Driving Internet for All in Bangladesh

Erlend
Prestg
ard,
CSO
Grame

Although low-income, Bangladesh is a country of strong

growth and an exceptionally young population
Country overview

Population: 166 million

51% of population < 25 years
GDP per capita of USD 752
GDP growth ~6%

37
Source: ITU, World bank and CIA World Factbook

Grameenphone is a strong and profitable player in a

competitive, but growing, telecom market
Subscriptions

Market share

Mobile penetration1

~45%
50 Mn

~47%
Revenue market share

Real mobile penetration

~20%
Active data users

Quarterly revenue

ARPU

EBITDA Margin

BDT 25.7Bn /
USD 331.7Mn

BDT 165 /
USD 2.1

~54%

1 Active data users baed on 90d users using GP internal estimates

Q3 2014 numbers, 1 USD = 77.49 BDT,
EBITDA before other items

38

GP regular data user base has grown over the last

quarter, mainly driven by micro data packs
Regular internet user base have growth
(90 day, > 150 KB)

Median data usage is also in a growth

trajectory

+14%

Aug-14

39

Sep-14

+28%

Oct-14

Aug-14

Sep-14

Oct-14

Internet penetration in this market is push based in

other words, we drive the market for internet

1-Jan-14

1-Feb-14

1-Mar-14

1-Apr-14

1-May-14

1-Jun-14

1-Jul-14

1-Aug-14

1-Sep-14

1-Oct-14

1-Nov-14

Continuous push to drive down handset devices

although cheap, they are still a hurdle in BD context
Pushing data enabled handsets down in price

GP Initiatives to introduce affordable internet phones

BDT 850/USD 10.6, unbranded

Chinese basic
BDT 925 /USD 11.5, local basic, strong
brand
BDT 1,500/USD 18.75, Edge+Java,
good local

BDT 4,000/USD 50, low-end 3G

smartphone
BDT 6,500/USD 81, most selling
smartphone

BDT 20,000/USD 250 high-end local

41

EDGE Feature
phone
USD 18.75

3G Smartphone
(FireFox)
USD 58

GP: Regaining coverage supremacy by building on the

widest 3G network coverage in Bangladesh
1st operator cover all 64 administrative
districts in Bangladesh
3G coverage of about 2/3 of 3G
handsets

Regaining the coverage supremacy by rolling out new

3G sites

New roll out in quarter

Existing

~ 45% of population within 3G coverage

~ 99% EDGE or 2G internet coverage
Additional coverage build up in Q4 14
investment on network roll out to
continue in 2015
Competition ramping up their 3G
coverage too
Q2 14

42

Q3 14

GP working on two fronts acquire new customers with

affordable product & capture smart phone segment with
all-in bundles
1 Taka whole day internet
3 MB data, 2G
New user acquisition
Launched on July 14

Helped to grow regular data subscriber base

by over 15% in two month period

Offered free Facebook to stimulate usage & acquire new

data users

Data centric monthly commitment bundles with Data +

Voice + SMS + MMS

43

Our internal analysis shows positive impact of data

usage on service ARPU but causes prisoners
dilemma dynamics
Data users ARPU is higher than non-data
users ARPU

Moving forward, data usage to take a greater

ARPU share

Data

Voice & others

Non data

Data

New users

44

Non data

Data

Existing users

2013

2014

Competition not monetizing speed / driving down 3G

prices / aggressive roll-out = demanding dynamics
Data prices being driven down by competition

Prices of 1 GB data has fallen by 25% in 3

quarters

3G data at the price of 2G/ unlimited utilities with

data packs

-25%
400
300

Q4 13

45

Q3 14

Future of internet growth is very bright in Bangladesh;

GP to get its fair share
All major factors to drive mobile internet
penetration in place
Youthful population (majority population

below 24 years)
No fixed internet infrastructure
Mobile internet network coverage across the

nation
Ever decreasing prices of internet devices
Strong (> 6% year on year) economic

growth

Monetization and competitive dynamics

will remain challenging

46

Driving Internet for All in Bangladesh

Erlend
Prestg
ard,
CSO
Grame