Vodafone India

– Idea merger

Investor presentation

20 March 2017
Disclaimer
Forward Looking Statements
Certain information contained in this document constitutes “forward-looking statements”, which can be identified by the use of terms such as “may”, “will”, “should”, “expect”,
“anticipate”, “project”, “estimate”, “intend”, “continue”, “target” or “believe” (or the negatives thereof) or other variations thereon or comparable terminology, or by discussions
of strategy, plans, objectives, goals, future events or intentions. Such statements express the intentions, opinions, or current expectations of the parties with respect to possible
future events and are based on current plans, estimates and forecasts, which the parties have made to the best of their respective knowledge, concerning, among other things,
the respective business, results of operations, financial position, prospects, growth and strategies of Vodafone and Idea Cellular Limited (“Idea”) (an Aditya Birla Group company),
statements regarding the transaction and the anticipated consequences and benefits of the transaction, the future growth prospects of the combined company and the
targeted closing date of the transaction, and the intended financing for the combined company (including the intended leverage). Due to various risks and uncertainties, actual
events or results or the actual performance may differ materially from those reflected or contemplated in such forward-looking statements.
Such risks and uncertainties include, but are not limited to, regulatory approvals that may require acceptance of conditions with potential adverse impacts; risks involving the
parties’ respective ability to realise expected benefits associated with the transaction; the impact of legal or other proceedings; and continued growth in the market for
telecommunications services and general economic conditions in the relevant market(s).
Furthermore, a review of the reasons why actual results and developments may differ materially from the expectations disclosed or implied within forward-looking statements
can be found:
• under “Forward-looking statements” and “Principal risk factors and uncertainties” in the Vodafone Group Plc’s annual report for the year ended 31 March 2016; and
• under "Other Information – Forward-Looking Statements" in Vodafone Group Plc's Half-Year Financial Report for the six months ended 30 September 2016.
No assurances can be given that the forward-looking statements in this announcement will be realised. As a result, recipients should not rely on such forward-looking
statements. Subject to compliance with applicable law and regulations, the parties undertake no obligation to update these forward-looking statements. No representation or
warranty is made as to the reasonableness of such forward-looking statements. No statement in this document is intended to be nor may be construed as a profit forecast or
estimate for any period and no statement in this document should be interpreted to mean that cash flow from operations, free cash flow, earnings, or earnings per share for
either of Vodafone (as altered by the combined company) or Idea will necessarily match or exceed the historical or published cash flow from operations, free cash flow,
earnings, or earnings per share for either of Vodafone or Idea (as appropriate). Actual results could differ materially from those expressed or implied.
This document is for information purposes only and is not intended to and does not constitute, or form part of, any invitation or offer to sell, dispose, acquire, purchase or
subscribe for any securities of any companies mentioned herein in any jurisdiction, whether pursuant to the transaction or otherwise. This document shall not be distributed or
used by any person or entity in any jurisdiction where such distribution or use would be contrary to applicable law or regulation.
2
 Vodafone India and Idea: benefits for all stakeholders
Input
A new champion of ‘Digital India’ Clear customer benefits
• Accelerate 4G/4G+/5G services across India • Complementary footprint creates leading
• Sustained and efficient investment to create network coverage and capacity
a world class Indian telecom infrastructure • Scale ensures attractive prices and long-
• Stronger financial inclusion through mobile term, sustainable consumer choice
payments • Improved offerings for large enterprises,
• Improved mass-market digital services small businesses and the public sector
in urban and rural areas • Best-in-class customer experience
across all segments

Creating shareholder value

• Stronger, listed asset in India, with a deep spectrum position to deliver the capacity to compete
• Improved returns on capital from higher scale and substantial opex and capex synergies
• De-leveraging of the combined company’s and Vodafone Group’s balance sheets
• Improved returns to all shareholders of both companies 3
Vodafone and Idea: the largest Indian telco

Largest telecom operator: Extensive distribution channels and

#1/#2 RMS in 21 out of 22 circles1 unparalleled service infrastructure
• Over 2m retailers
• 19k branded stores and 28k contact
centre agents

Highly complementary footprint Full digital services to Indian

and coverage consumers and businesses
• Metro, urban and rural markets • Mobile payments, IoT, advanced enterprise
• Broadest coverage: 273k 2G sites2, offerings and entertainment services
189k 3G/4G sites2

Competitive spectrum portfolio and Substantial cost and capex synergies

broadband coverage • Estimated NPV of US$10bn4
• 1,850 MHz3, premium 900 MHz in 17 circles • $2.1bn annual run rate in 4th year4
• 163 3G/4G carriers3, up to 250mbps
in 12 circles

1. Revenue market share based on Q3 FY 2017 gross revenue

2. Based on current footprint; 2G site numbers likely to fall post-completion due to rationalisation
3. Spectrum holdings are shown on a pro-forma combined basis and may need to be reduced to comply with M&A guidelines
4. NPV of cost and capex synergies after integration costs and spectrum liberalisation fees; run-rate savings on an annual basis before integration costs in the fourth full year after completion 4
Vodafone and Idea post completion

Idea Promoters1 26.0% Public 28.9% Vodafone Group 45.1%

Indus Towers 42%

Merged entity

Mobility Towers Payments Bank Other Subs / JVs

• Both mobility businesses • Standalone towers2 (tenancies) • Idea Money • You Broadband3
– Idea: 8,886 (15,418) • Vodafone M-Pesa • Firefly Networks
– Vodafone: 10,926 (15,846) • Aditya Birla Idea Payments Bank • Other subsidiaries
• Idea’s 11.15% stake in Indus

• Vodafone will own 45.1% of the combined company after transferring a 4.9% stake to the Aditya Birla Group for US$579 million in cash, concurrent with
completion of the merger. The Aditya Birla Group will then own 26.0% of the combined company
• Aditya Birla Group has a right to acquire up to a 9.5% additional shareholding from Vodafone
• Standalone towers and Idea’s 11.15% stake in Indus Towers to be monetised

1. The Idea Promoters consist of companies controlled by the Aditya Birla Group
2. Number of towers as at 31 December 2016. Excludes sites and tenancies in IBS (in-building solution), COW (cell-sites on wheels) and MSC (mobile switching centre) towers
3. Vodafone signed an agreement to acquire You Broadband in 2016. The transaction is subject to completion 5
Partnership with international expertise and telecoms scale

Technology Leading conglomerate

• Key shaper of technology standards, • One of India’s most respected
key GSMA decisions, chairmanship of and largest conglomerates
the NGMN Alliance1 with over 150 years of heritage
• Innovator in mobile payments • Aggregate revenues of US$41bn
(M-Pesa in 10 countries) Joint Management Team & Governance
Diversified profile
Enterprise • Each Party to have 3 director appointment
rights, 6 independent directors • Proven track-record of building
• Leader in enterprise mobility
leading businesses across diverse
internationally, PoPs in 73 countries • K. M. Birla to be Chairman as one of 12 Board industries and geographies
• Global leader in IoT members
• 49 partner markets • Vodafone to appoint the CFO Global presence
Procurement • CEO and COO selected jointly on a ‘best • Operations across 30+ countries
• Best-in-class purchasing person for the role’ principle, shortly before • Over 120,000 employees belonging to
capability reflecting leading closing 42 different nationalities
multi-country scale

1. Next Generation Mobile Networks Alliance 6

Vodafone and Idea are highly complementary assets
Leadership position across India… …and across almost all circles
Circles where Vodafone / Idea hold #1 or #2 positions based on RMS, Q3 FY 2017 RMS, Q3 FY 2017, pre Reliance Jio charging1 Combined
market position1
Metro Mumbai 33% 9% 42% #1
Kolkata 34% 8% 42% #1
Delhi 27% 12% 38% #1
A circles Gujarat 37% 22% 59% #1
Mah & Goa 24% 32% 56% #1
Andra Pradesh 10% 23% 33% #2
Tamil Nadu 24% 6% 30% #2
Karnataka 15% 11% 26% #2
B circles Kerala 23% 39% 61% #1
Haryana 28% 27% 55% #1
UP West 22% 30% 52% #1
Madhya Pradesh 9% 42% 51% #1
West Bengal 37% 9% 46% #1
UP East 28% 14% 42% #1
Punjab 16% 24% 40% #1
Rajasthan 22% 13% 35% #2
C circles Bihar 14% 14% 28% #2
Rank 1 (60% Ind. Rev) Assam 23% 5% 28% #2
Rank 2 (39% Ind. Rev) North East 18% 4% 23% #2
Rank 3 (1% Ind. Rev) Odisha 17% 6% 23% #2
Himachal Pradesh 10% 12% 22% #2
Jammu Kashmir 10%6% 16% #3

Vodafone Idea

1. Revenue market share and market position based on operator gross revenue by circle, before complying with the thresholds in the M&A guidelines 7
 Largest customer base with a competitive spectrum portfolio
Customers As at Q3 FY 2017 (m) Spectrum Total spectrum holdings
post Oct-2016 auction (MHz)1

395 1,850

320 1,489
191 891
1,235

205 984 958

191 183 891 883

100
205 72 958 387
53

2 2 3
Vodafone- Vodafone-
Idea Idea

Customer market share (Q3 FY 2017) Share of spectrum1

35% 28% 18% 17% 16% 9% 6% 5% 27% 22% 18% 14% 14% 13% 13% 6%

1. Spectrum holdings are shown on a pro-forma combined basis and may need to be reduced to comply with M&A guidelines
2. Includes Uninor
3. Includes spectrum sharing 8
 Market leader in revenue and EBITDA
Gross revenue1 FY 2016 (US$bn) EBITDA FY 2016 (US$bn)

3.7
3.3
12.1
9.8 1.8
5.4
2.0 1.8
6.7
5.4
3.4 2.0
6.7 2.7
1.9 0.5
n.a.
2 3
Vodafone- Vodafone-
Idea Idea

Gross revenue market share (FY 2016)

40% 32% 22% 18% 11% 9% 6% Scope for margin improvement through increased scale and synergies

1. Based on TRAI reporting

2. Includes Uninor
3. Bharti B2C mobile services India, also includes Uninor 9
Digital champion enabled by combined network and spectrum
Significant spectrum investments… (US$bn) …enabling leading spectrum capacity (#)
Spectrum investment Apr-2010 to date Number of broadband carriers (3G + 4G)1
21.0
163
150
138
13.0 11.8
9.2
7.1 74 73
4.4
2.7

2 2
Vodafone- Vodafone-
Idea Idea

Largest number of sites (000s) Premium spectrum position (%)

GSM sites1 Spectrum market share in <900 MHz bands1 Spectrum holding (MHz)

273 351 343 283 255 233 165 135 118

249

132 185 22%

141 21%
132 18%
16% 15%
7% 10% 8%
141 7%
10%
3 2 2
Vodafone- Vodafone-
Idea Idea

1. Information for other operators based on company estimates and may differ from actual deployment; spectrum holdings are shown on a pro-forma combined basis and may need to be reduced to comply with M&A guidelines; based on current footprint, 2G site
numbers likely to fall post completion due to rationalisation
2. Includes Uninor 10
3. Broadband sites
Substantial cost and capex synergies
Synergy areas Description

• Rationalisation of combined site requirements (more than 20%) following network consolidation
Network & IT • Avoidance of duplicative 4G network expansion and upgrades, re-deployment of over-lapping equipment
• Material longer-term IT savings due to scale benefits, infrastructure sharing and system combination ~ US$2.1
billion run-
rate cost
Customer service • Service centres, back office and distribution efficiencies
& customer and capex
acquisition • Scale efficiencies with channel and service partners synergies
in 4th year
• Rationalisation of combined marketing costs
G&A and other
• Streamlining of overlapping activities

NPV of cost and capex synergies1 ~US$10.5bn

1. Includes total integration costs amounting to c. US$2 billion; excludes spectrum liberalisation costs, estimated at US$0.5 billion NPV. The NPV of cost and capex synergies after spectrum liberalisation and integration costs is US$10.0 billion 11
Limited regulatory dis-synergies
Dis-synergy areas Description NPV (US$m)

Liberalisation of
spectrum
• Liberalisation cost on Vodafone India spectrum in 13 circles ~500

Breach of • Need for spectrum surrender or sale where spectrum caps are breached
spectrum caps
<0
• Opportunity to sell excess spectrum or hand it back to the government

Potential breach of
revenue market • Potential revenue loss as a result of breaches in revenue market share caps ?
share caps (<50% compliance test, to be measured 12 months post closing)

Potential breach of
• Potential revenue loss as a result of breaches in customer market share caps
customer market
(<50% compliance test, to be measured 12 months post closing) ?
share caps

12
Transaction overview
• Vodafone to combine its subsidiary Vodafone India (excluding its 42% stake in Indus Towers) with Idea Cellular
Proposed
• Immediately post merger, Vodafone to receive a 50% stake in Vodafone-Idea (approximately 3,630m1 shares)
transaction
• Concurrent with completion, Vodafone will transfer a 4.9% stake in the combined company to Aditya Birla Group for US$579m in cash

• Vodafone India valued at an enterprise value of US$12.4bn2

– Implied 6.4x LTM EBITDA3
Value equation
– Based on Idea market capitalisation of US$3.9bn (6.3x LTM EBITDA excluding Idea’s Indus Towers stake)4
– Vodafone to contribute $369 million more net debt than Idea at closing (approximately $8.2 billion as at 31 December 2016)

• Vodafone: 45.1%
• Aditya Birla Group: 26.0%
Ownership split
• Idea’s minority shareholders: 28.9%
• Equalisation mechanism to align the shareholdings of Vodafone and the Aditya Birla Group over time

• Transaction subject to prior regulatory approval and Idea shareholder approval

Timeline
• Completion anticipated during calendar 2018

• Vodafone India's standalone towers to be part of transaction, with the aim of selling them before closing
Tower monetisation
• Vodafone to retain its 42% stake in Indus Towers
options
• Exploring strategic options including a full or partial sale of Vodafone’s stake in Indus Towers

1. Based on the fully diluted number of shares of Idea as at 31 January 2017

2. Based on the following value equation: (Idea market capitalisation of US$3.9bn / 50%) x 45.1% + US$579m (received for 4.9% stake sold) + Vodafone India net debt contribution of US$8.2bn based on Idea’s net debt as at 31 December 2016; Idea’s market
capitalisation based on 30 trading day VWAP as at 27 January 2017 (implied share price of INR 72.5); Idea’s net debt based on pro forma adjustments as per transaction definitions
3. LTM EBITDA as at 31 December 2016
4. Idea mobile valuation calculated excluding its 11.15% stake in Indus Towers (valued at 8.8x LTM EBITDA, as per Bharti Infratel multiple as at 17 March 2017 close)
13
Equalisation mechanism: Vodafone and Aditya Birla Group
Standstill period
45.1% Year Year Year
26.0% 1 2 3
Year Years
• Aditya Birla Group can buy up to 9.5% from Vodafone
to equalise its shareholding at 35.5%
• Valuation of US$14.1 billion for 100% of the
4 5-9
combined companies’ equity, equivalent to INR130
per Idea share
• Neither party can sell any shares to 3rd parties • Aditya Birla Group can commit to • Vodafone to sell shares to
buy the remaining balance up to equalise its shareholding with
9.5% at market price from Aditya Birla Group over a 5 year
Vodafone period
• Must inform Vodafone at the
start of the year how many
shares it will buy and complete
the purchase within 12 months
• Vodafone can sell shares not
reserved for the Aditya Birla
Group from the start of the year 14
De-leveraging expected before and after closing
Vodafone-Idea leverage profile Net debt / LTM EBITDA Debt breakdown Pro forma debt breakdown, Q3 FY 2017
(as at December 2016)
20%
4.4x

4.1x Spectrum debt

Financial debt

80%

3.0x

Capital structure and dividend policy

Vodafone and the Aditya Birla Group committed to maintain

appropriate leverage at closing and thereafter

Pro forma (PF) PF leverage post PF leverage post Revenue

leverage¹ tower disposal² tower disposal with recovery
All excess cash to be returned to shareholders
run-rate synergies³ potential4

1. Based on 2 x Idea’s net debt of US$7.9bn as at 31 December 2016 + US$369m; Idea’s net debt based on pro forma adjustments as per transaction definitions
2. Assuming tower assets sold at the Bharti Infratel multiple of 8.8x LTM EBITDA as at 17 March 2017 and CGT deducted from the proceeds
3. Pro-forma for the estimated run-rate opex synergies of US$1.3bn
4. The decision by Reliance Jio to begin charging its customers for its services may result in an improved trading environment 15
Unlocking further value through tower assets
Vodafone-Idea Vodafone Group Indus Towers stake
Number of tenancies1 Q3 FY 17 Number of tenancies1 Q3 FY 17

• Largest MNO shareholder in India’s largest tower company

• Superior financial track record

Own towers1 Own towers1 11.15% stake2 42% stake2 7% FY14-16 revenue CAGR3
Tenancy ratio Tenancy ratio
1.5x 1.7x 2.3x 2.3x 43% FY16 EBITDA margin

31,544 118,822

15,846 15,418 Revenue (US$m)4 EBITDA (US$m)4

1,012 439

Strong, tangible monetisation potential for both combined entity’s towers and Vodafone’s 42% stake in Indus Towers
1. Excludes sites and tenancies in IBS (in-building solution), COW (cell-sites on wheels) and MSC (mobile switching centre) towers
2. Proportionate number of tenancies based on respective 11.15% and 42% stakes in Indus Towers
3. CAGR based on IGAAP financials 16
4. Proportionate Indus Towers FY 2016 Ind AS financials (based on Vodafone’s 42% stake)
Implications for Vodafone Group financial reporting

• IFRS requires de-consolidation of Vodafone India immediately post announcement1

• After completion, India to be accounted for as a joint venture:

– JV reported under the equity method

– Net debt de-consolidated, improving pro-forma leverage ratios by around 0.3x2

– Accretive to Group cash flow post spectrum payments from the first full year post closing

• FY2016/17 guidance unchanged, continues to include India

• Going forwards, guidance to exclude India, consistent with local market practice

1. The Vodafone Group’s reported revenue, EBITDA, operating profit and profit before and after tax for the year ending 31 March 2017 will exclude Vodafone India, with the after tax result of Vodafone India being presented as a single
line in the income statement. All previous years’ financial results will be restated onto this basis
2. Based on expected Vodafone Group net debt/EBITDA at March 31 2017, pro-forma for the deconsolidation of Vodafone Netherlands. Net debt/EBITDA impact assumes deconsolidation of US$8.2 billion of India net debt, calculated 17
as US$369 million more than Idea’s adjusted net debt of US$7.9 billion as of 31 December 2016, takes into account the cash payment of US$579 million received from the Aditya Birla Group and is subject to closing adjustments
Summary
Creating a stronger champion for Digital India,
enabling broadband access in both rural and metro
areas to provide digital services to all Indians

Merging into a listed asset with a deep spectrum

position to compete with other market leaders

US$10 billion NPV from synergies drives significant

value creation for all shareholders

Exploring strategic options including a full or partial sale

of Vodafone’s stake in Indus Towers

Group de-leveraging; US$8.2bn1 of net debt de-

consolidated, US$579mn of cash received on closing.
Accretive to Group cash flow from the first full year

1. Based on Idea net debt of US$7.9 billion as at 31 December 2016, plus US$369 million; Vodafone’s contribution of net debt will be subject to customary closing adjustments 18
Appendix
Enhanced spectrum position to meet future capacity needs
Pan India 3G and 4G offerings
Circle share of No of Carriers
industry gross Total Spectrum
Circles revenue (%)1 Holding (MHz) GSM 3G 4G FDD 4G TDD 3G+4G JAMMU & KASHMIR
Maharashtra 9% 122.8 22.8 3 3 6 12
Kerala 5% 114.8 24.8 2 4 5 11
Gujarat 6% 113.6 23.6 2 4 5 11
HIMACHAL PRADESH
Haryana 2% 106.0 26.0 2 4 3 9 ASSAM
PUNJAB
Uttar Pradesh (East) 6% 100.8 20.8 2 4 3 9
Rajasthan 5% 95.2 15.2 2 4 3 9 HARYANA
UP-W
Madhya Pradesh 4% 92.0 22.0 2 2 5 9 DELHI
West Bengal 3% 90.0 20.0 1 4 3 8 RAJASTHAN UP-E
Mumbai 7% 91.2 21.2 2 3 3 8 BIHAR WEST
NORTH
& BENGAL
Kolkata 2% 84.0 14.0 2 3 3 8 EAST
JHARKHAND &
Delhi 8% 87.2 17.2 2 3 3 8 MADHYA PRADESH SIKKIM
GUJARAT & CHATTISGARH
Uttar Pradesh (West) 4% 91.2 22.4 2 3 3 8
North East 1% 81.6 21.6 1 3 3 7 KOLKATA
Assam 2% 80.0 20.0 1 3 3 7
ORISSA
Odisha 2% 74.0 14.0 1 3 3 7 MAHARASHTRA
Punjab 4% 83.6 23.6 1 4 2 7
ANDHRA
Tamil Nadu 8% 67.2 17.2 1 4 0 5 PRADESH &
Bihar 5% 55.6 15.6 1 2 2 5 TELANGANA
Jammu and Kashmir 1% 54.0 14.0 1 2 2 5
KARNATAKA
Andhra Pradesh 8% 55.6 15.6 1 2 2 5
Himachal Pradesh 1% 51.2 11.2 1 2 2 5 KERALA >7 mobile broadband carriers (61% of revenue)1
Karnataka 8% 58.0 18.0 1 3 0 4
6-7 mobile broadband carriers (8% of revenue) 1
No. of Carriers2 34 69 60 163 TAMIL NADU
Spectrum Holding (MHz)2 1,850 421 340 689 400 1,429 4-5 mobile broadband carriers (30% of revenue)1

1. Based on Q3 FY17 industry gross revenue

2. Spectrum holdings are shown on a pro-forma combined basis and may need to be reduced to comply with M&A guidelines. For calculating the total spectrum holding, FDD spectrum has been multiplied by 2 for equivalence with TDD spectrum. 5 MHz of
FDD spectrum (paired) is treated as 1 carrier, 10 MHz of TDD Spectrum (unpaired) is treated as 1.5 carriers. For the combined company, a maximum of 2-3 carriers are considered as being devoted to 3G services, extra 3G carriers are treated as being
deployed for 4G services. Synergy leads to additional 1800 carrier(s) available for 4G across most circles. 21
Transaction economics
Implied valuations Implied multiples

Idea Vodafone India Idea Vodafone India

x 2 x 45.1%
Equity value1 US$3.9bn + US$579m US$4.1bn Mobile enterprise value US$10.8bn US$12.4bn

Net debt2 US$7.9bn US$8.2bn LTM EBITDA4 US$1.7bn US$1.9bn

+ US$369m

Enterprise value US$11.8bn US$12.4bn EV/LTM EBITDA 6.3x 6.4x

Value of Idea’s 11.15% stake

(US$1.0bn)
in Indus Towers3

Mobile enterprise value US$10.8bn US$12.4bn

1. Idea’s market capitalisation based on 30 trading day VWAP as at 27 January 2017 (implied share price of INR 72.5); Vodafone India’s equity value based on (Idea’s market capitalisation x 2) x Vodafone stake in Vodafone-Idea of 45.1% + US$579m (received for 4.9% stake
transferred)
2. Vodafone India’s net debt at completion will be equal to Idea’s net debt at completion (before proceeds from expected disposals of tower assets) + US$369m; based on Idea’s net debt as at 31 December 2016 of US$7.9bn; Idea’s net debt based on pro forma adjustments
as per transaction definitions
3. Assuming Idea’s 11.15% stake in Indus Towers valued at 8.8x LTM EBITDA, as per Bharti Infratel multiple as at 17 March 2017 close
4. As at 31 December 2016 22
Vodafone Group financials excluding India
€m FY 2016 H1 FY 2017

Group India(1) Group ex. India(2) Group India(1) Group ex. India(2)

Key financials

Revenue 55,930 6,161 49,825 27,054 3,015 24,058

Organic Service Revenue Growth 1.5% 5.0% 1.1% 2.3% 5.9% 1.8%

EBITDA 15,840 1,815 14,025 7,906 892 7,014

EBITDA margin 28.3% 29.5% 28.1% 29.2% 29.6% 29.2%

Depreciation (9,314) (823) (8,491) (4,552) (422) (4,130)

Amortisation of spectrum (2,330) (454) (1,876) (1,144) (247) (897)

EBIT 4,196 538 3,658 2,210 223 1,987

EBIT margin 7.5% 8.7% 7.3% 8.2% 7.4% 8.3%

Capex (11,663) (1,102) (10,561) (3,973) (447) (3,526)

Capex intensity 20.9% 17.9% 21.2% 14.7% 14.8% 14.7%

1. Excludes VCS
2. Post adjustments including intercompany revenue 23