Business Models

ISP
• Business Model
– Providing broadband internet access to
corporate customers
– Key input is bandwidth purchased from
multiple carriers
– Currently
• Bandwidth purchased is 117 Mbps
• Bandwidth sold is 190 Mbps
– Difference is the “aggregation” gain
 Business Plan
• Obtain Category A license in 2008-09
• Expand to Chennai, Bangalore, Mumbai
and New Delhi
• Synergies with Data Centers (Ctrl S)
• Assumptions
– Bandwidth Price & Cost to decrease at 30%
per year
– Bandwidth sales to increase at 50% per year
 Projections
Rs. Crore

Projections 2008-09 2009-10 2010-11 2011-12 2012-13

Sales 8.96 14.74 18.09 19.00 19.95

EBIDTA 2.73 4.14 5.40 5.30 5.18

Profit After Tax 1.75 2.56 3.31 3.16 2.97

Investment in Equipment 0.50 0.75 0.50 1.00 0.75

Cash Balance 1.63 3.71 6.90 9.58 12.48

 Pioneer eLabs
• Business Model
– Fixed rate, turn key contracts for large IT
projects
– Crack select large accounts every year
• Accounts generate recurring revenue every year
• Plus AMCs on projects executed
– On the basis of specific domain expertise,
sizeable business in non-key accounts
 Existing Accounts
• AP Police – started with pilot of eCOPS 5 years back and are now
strongly established
• BSNL – partner for delivery of complete solutions to BSNL
customers based on their local loops
• GVK Group – as the group’s projects (Mumbai International Airport)
progress, steady revenues every year
• GMR Group – grow with the group
• Heritage group – as their network expands, steady business every
year
• University of Hyderabad – ERP developed by Pioneer, replication
potential in 20 other central universities
• Others
– ONGC, NTPC, APSCHE, Agricultural University, SCR, APHMHIDC
 New Accounts for 2008-09
• Schools
– Shortlisted in both AP and Karnataka
• SWANs (State Wide Area Networks)
– 5 states implementing SWANs this year
• Panchayat Raj
– Executing order from Tripura
– Replication possibilities in other States
– Front runner in UP
• Supreme Court
– Large IT budget
– Gained entry
 Business Opportunity
• Schools – Rs. 5,200 crore per year
• SWANs – Total Rs. 3,500 crore
– Rs. 450 crore, this year’ budget
– Similar amounts expected in next few years
• Panchayat Raj – Rs. 600 crore, country wide, plus
recurring revenues
• Supreme Court – Rs. 400 crore budget for eCourts
project, Rs. 35 cr spent, rest over two, three years
• Land Records – Rs. 70 crore (AP) alone
• Data Centers – Rs. 275 crore this year
– Actively involved in AP Data Center, Rs. 50 crore
 Indian Domestic IT Industry

  2007 2008 2009 2009 2011 2011

Domestic IT
industry 87,020 110,966 125,581 147,688 168,370 201,539

Governments
Share 13,923 17,755 20,093 23,630 26,939 32,246

All Figures in Rs Crore Source : IDC India

 Revenues for Key Service Lines in the Domestic Market

All Figures in Rs Million

 Pioneer Towers
• Blue Chip Clients
– Cognizant Technologies
– Rockfeller group companies
– Alghanim group
– Colruyt
• Restaurant to be leased in 2008-09
• Current revenue, Rs. 9 crore
• Expected to increase to Rs. 12 crore in three years due
to higher yields
 Projections

Rs. Crore

Projections 2008-09 2009-10 2010-11 2011-12 2012-13

Sales 60 84 110 140 175

EBIDTA 22 28 35 42 48

PAT 14.5 18 24 29 35
Discussion