Transcript Investor Relations Presentation, July, 2007.

Sify Ltd.
Investor Presentation
From time to time, we make presentations to investors, analysts, the media and
other persons interested in our company. The present form of presentation that we are using is
attached. The contents of this presentation include forward-looking statements that were and
are made in express reliance on the safe harbor provisions contained in Section 21E of the
Exchange Act and Section 27A of the Securities Act. Such statements include, without
limitation, statements relating to results deemed to be achievable by our management in future
periods, as well as with respect to trends in sales performance, gross margin, selling, general
and administrative costs, market growth, the competitive environment, and other factors
affecting future sales, operating results, and capital requirements. Sales and operating results
trends are also affected by many other factors, including, among others, world and national
political events, general economic conditions which recently have been weak, the effectiveness
of our promotion and marketing strategies, and competitive factors applicable to our corporate
and consumer markets.
The presentation material also includes selected financial measures that constitute “non-GAAP”
data under the Securities and Exchange Commission’s rules, particularly including our
calculation of earnings before interest, taxes, depreciation and amortization, or Ebitda.
Sify Ltd.
Investor Presentation
A derivation of Ebitda and a reconciliation of that calculation to the GAAP data that we believe to
be most comparable is provided in our recent reports on Form 6-K or 20-F filed with the SEC.
These reports can be accessed on our website or on the SEC’s Edgar database (www.sec.gov)
The statements furnished in this presentation must be viewed in context and in light of the risks
described above and under the caption “Risk Factors” contained in our most recent reports on
Form 6-K or 20-F filed with the SEC. In light of these risks, there can be no assurance that the
forward-looking statements furnished in this presentation will in fact be realized. The statements
made in this presentation speak as of its date only, and it should not be assumed that the
statements made herein or therein remain accurate as of any future date.
SIFY DOES NOT PRESENTLY INTEND TO UPDATE THESE STATEMENTS AND
UNDERTAKES NO DUTY TO ANY PERSON TO EFFECT ANY SUCH UPDATE UNDER ANY
CIRCUMSTANCES.
Sify Ltd.
Investor Presentation
Any failure to successfully implement our operating strategy or the
occurrence of any of the events or circumstances set forth in this presentation or the referenced
Risk Factors could result in the actual operating results being different than the projections, and
such differences may be adverse and material.
********
Making the Internet Work
for You
July 2007
Internet Users in India: Fastest growing
in Asia
2006E Internet
Users ( Million)
2003-2006E Internet Users CAGR
31
Source: IDC
17
7
Philippines
Indonesia
126
9
37
40%
35%
30%
25%
20%
15%
10%
5%
0%
India
China
• Fastest growth rates in the region
Thailand
Korea

Indian Internet Users expected to grow to 100 Million
over the next 3 years from estimated 42 Million in Mar
2007 .
Internet & Online Association

Government’s Broadband Policy Target: 20 MM
subscribers by 2010
E-Gov Initiatives gaining momentum
Information Services available online
• Rapid infrastructure improvements


Growth of IT Spending in India
20.0
Domestic demand for IT in India is witnessing a gradual transformation from
being predominantly hardware driven towards a solutions oriented approachresulting in an emphasis on services.
18.0
16.0
USD Billion
14.0
12.0
10.0
8.0
6.0
4.0
2.0
17%
23%
23%
18%
17%
15%
2003
2004
2005
2006
2007
2008
14%
0.0
Source: Nasscom – IDC Report
2009
Strong IT – ITES Growth Projected
Revenues $ Billion
Domestic
growth trends
14.0
22%
12.0
23%
10.0
12.4
10.2
8.3
Offshoring growth trends
10.0
8.0
6.0
6.0
4.0
4.0
2.0
2.0
0.0
0.0
• Offshore Infrastructure Management Services
expected to grow to $ 1 Billion in 3 years
• Domestic demand driven by IT/ITES
Source : NASSCOM
32%
12.0
8.0
FY 2004 FY 2005 FY 2006
13.2
14.0
37%
10
7.3
FY 2004 FY 2005 FY 2006
Sify is well positioned to leverage the
projected exponential growth of
Internet usage as well as internet based services.
Catalysts of the Internet for positive change
Consumer
Internet
Experience
Enterprise
Services
Technology Core
Network
Data Centers
Systems
Leveraging IP expertise
Technology Core Competence
“To become the global provider of choice by pioneering
technology and offering innovative customer centric
internet solutions thereby creating value for the
customer”
Sify’s Technology is ISO 9001-2000, BS7799 certified & appraised CMMi Level 3
The Sify Edge:
Infrastructure - India Network

A World class design and service
standards network to deliver
 Consumer Internet
Experience
 Enterprise Technology
Services

Network coverage extends to 200
cities

Our Network is IPv6 and MPLS
enabled with redundancies

A Converged network:
Voice,Video & Data capability

Future proofed to meet strong
demand from IT/ITES and other
verticals
The Sify Edge :
Infrastructure – Redundant Global Connectivity
State-of-the-Art Network Management
 Integrated Trouble Ticketing
Proactive Alerts
Standards Based
IT Information Library
CIO Dashboard
Incident
Management
Problem
Management
Trouble
Ticket Engine
NMS Alerts
Knowledge
base
Change
Management
Service
Desk
Escalation
Engine
C M D B
Change
Workflow
NMS
Configuration
Baselines
IT Service
Continuity
Management
Path Management
Threshold
Monitoring
C M D B
Capacity
Management
Reports
Engine
Availability
Management
Service Level
Agreements
SLA
Management
Software
Inventory
Common pool of technology talent across businesses
World Class Processes
 ISO 9001 – 2000 Certification
› Enterprise
Solutions Business, Technology, and Customer
Care
 Maturity Level 5 (CMMI-SW version 1.1)
› Technology development units apprised at Maturity Level
5 of the Capability Maturity Model Integration (CMMI-SW
version 1.1)
 Information Security Certification
› First Data Center complying with ISO 27001
Integrated Consumer Experience
•com
No one else has it !
Internet access: Huge Unrealized Potential
60% of Internet Users access the Internet
from Public Internet Access Points
Source : IMRB – 2004 Report.
PC Owners
3,500
3,000
2,000
1,000
287 461
732
2,550
1,886
1,550
1,073
19
97
19 98
98
19 99
99
20 00
00
20 01
01
20 02
02
20 03
03
-0
20 4
04
-0
5
That’s because Home PC ownership
is estimated at 6 million plus in
2006. Even with projected growth
of over 30% (IDC) this would still be
only 12-13 million.Total no of
homes in India is 210 million
4,000
Large Opportunity in Public Internet Access
The World’s Largest Franchised Cyber-café Chain
We single handedly created the branded public
internet access services industry in India by:
 Taking Internet to the people with a franchised chain
 Currently 3700+ cafes in 163 cities, and growing
 The undisputed No 1 in branded public Internet access
 Delivering a superior Consumer Internet Experience
 High speed access across the chain
: Categories & Services
 Internet
: Browsing,Voice,Games
 E commerce
: IRCTC,Utility bills,Money transfer etc
 E entertainment : GameDrome,Sifymax
 E shopping
: Sify mall
: Categories & Services
 E learning
: Microsoft certificate , Internet Access for
Microsoft IQ PC , Microsoft Office products
training at iWays, iWay as virtual office
“ As part of our strategy to use the iWays to empower Indians
with Internet and IT services, We have partnered with
Microsoft India to help bridge the digital divide in India “
1300
4000
iWays
Subscribers
3500
1200
1100
1000
3000
No of iWays
900
2500
800
700
2000
600
500
1500
400
1000
300
200
500
100
0
0
Q1 0506 Q2 0506 Q3 0506 Q4 0506 Q1 0607 Q2 0607 Q3 0607 Q4 0607 Q1 0708
Subscriber Millions (3 months active)
Growth
Vision
Our vision is to be an integral part of the Indian
middle class family’s Internet experience
Consumer Touch Points:
to Homes
 High Speed Internet Revolution for homes
›
Pioneered unique model with Cable TV operators (CTOs) for
last mile connectivity
›
Currently the largest private player with more than 200,000
subscribers
›
›
›
›
Potential of 80 Million Cable TV households
Cable TV homes more likely to buy home PCs
Iways users who buy home PCs can remain Sify customers
Aggressively growing base
 Technology Innovation :
›
›
Service Provider with wireless broadband technology
Developed own client to ensure PC hygiene and push
updates to consumers at home (eg Anti Virus).
Value added Services
 CUG Phone for Subscribers
 Mathguru , Class teacher & MBD Alchemie
 IRCTC tie up for Railway Tickets through
partners(CTOs)
 Roaming access to users : Sify Anywhere
 VOIP for International Calls.
 PC health solutions.
growth trends
250
Subscribers
Subscribers (000s)
200
183.0
208.8
209.0
Q2 0607
Q3 0607
215.5
208.1
191.1
150.5
150
124.7
104.8
100
50
0
Q1 0506
Q2 0506
Q3 0506
Q4 0506
Q1 0607
Q4 0607
Q1 0708
Internet Content enhancing Consumer
Experience
 Driven by
› High Speed Broadband
› Rich broadband content
Betting on broadband!
Betting on youth !
India & the Internet
 40 Mn internet users
 Estimated to be 50 Mn by March’08
 Internet penetration at 3.5% of population
 Smaller cities & towns record 142% YOY growth
 25% users from smaller towns
 Over 20Mn NRI’s estimated world over
Source:IAMAI & Internetworldstats
Internet Content enriching Consumer
Experience
 Entertainment
› Online Games, Movies, Music Videos
› Association with Indian Television : Indian Idol, MTV Roadies,
Fame Gurukul, Saregamapa
Internet Content enriching Consumer
Experience
 Education
› Tie up with Educational Institutions
› E Learning (Computer Based Training)
› Online tests
Sify.com-Regional languages
Sifymax.in-City Centric Portals
Samachar.com
Portals growth
2.0
1.9
Revenue
1.8
1.6
1.7
1.7
Revenues ( USD Million )
1.6
1.4
1.4
1.2
1.2
1.1
1.0
1.0
0.8
0.8
0.6
0.4
0.2
0.0
Q1 0506
Q2 0506
Q3 0506
Q4 0506
Q1 0607
Q2 0607
Q3 0607
Q4 0607
Q1 0708
1 $ = Rs 40.58
Integrated Enterprise Services
Managed Services



Managed Network Services
›
IP/VPN
›
Global MPLS
›
Internet & bandwidth
›
VoIP & Converged Network
Services
Managed Datacenter Services
›
Managed Servers
›
Managed Mail
›
Application Hosting
Security Services
Offshore Services


Network Operations Management
Datacenter Operations
Management

Security Operations Management

Application Performance
Management

Desktop Management

Helpdesk
 Key Verticals Served
› IT/ITES- BFSI - Consumer Telecom -Life Sciences
› Manufacturing - Retail -Energy - Government
Sify Enterprise Services - Profile
 Expertise in delivering mission critical 24x7 technology
services
 Leader in India by far- IDC
 Over 1700 clients, including 400 global companies
 Among top providers in Forrester Wave for Offshore
Infrastructure Management (2005)
 Scalable infrastructure
Case Study : Hosting & Managed services
 Client
›
›
RxMD, NJ USA & Chennai , India
Managed by US Board Certified and Licensed Physicians
 Service
›
Hosting Services, Managed services,DR solution & Storage services
 Challenge
›
›
›
›
Highly secured
Infrastructure complaint with US & EU regulations
Scalable architecture
OS & DB administration 24 x 7
 Benefits
›
Single point solution offering end to end solution starting from Hardware
Procurement , Implementation and continuous support
›
DR server up in 24 hours as per RxMD’s requirement by using unque Sify
solution.
›
›
Quick Implementation meeting stringent client deadlines
Guaranteed 99.6 % uptime for Network and Infrastructure
Case Study : International MPLS Services
 Client
›
Whirlpool India Limited
 Service
›
›
International MPLS Services
Accessing servers in US from office in INdia
 Challenge
›
›
›
›
›
Shifting of application servers to Michigan , US
High uptime commitments in the network
Redundancy on the network
Highly flexible and scalable network solution
End to End Security
 Benefits
›
›
›
High uptime reliable network
Strong security feature
Automatic route distinguishers to provide traffic separation
Case Study : VPN Connectivity
 Client
›
›
Globus Multi location retail store.
Changeover to Sify from TELCOs
 Service
›
VPN Connectivity with high last mile uptime
 Challenge
›
›
Integrating Network
High last mile uptime
 Benefits
›
›
›
High uptime on entire network including Last mile
Faster implementation
30-40 % reduction in costs
Case Study : Document Management
 Client
›
DLF Group is a leading name in India’s real estate Industry
 Service
›
Document Management & Scanning services
 Challenge
›
Documents centrally stored in Corporate office Delhi. Hindering
productivity as it requires physical travel between locations for document
retrieval.
›
Documents (Legal Documents, Drawings) are to be maintained for long time
and is also exposed to wear & tear
 Benefits
•
•
•
•
•
Fast searching and retrieval of the documents and drawings
Enterprise wise access to the documents
Documents available on one click of a button
Back up to the physical documents
Wear & tear of the documents and drawings was reduced
Growth of Enterprise Services
25
Revenue
21.0
Revenues ( USD Million )
20
16.7
15.4
15.5
Q2 0506
Q3 0506
17.8
18.5
19.1
19.8
15
13.2
10
5
0
Q1 0506
Q4 0506
Q1 0607
Q2 0607
Q3 0607
Q4 0607 Q1 0708
1 $ = Rs 40.58
Enterprise Services - International
Enterprise
Infrastructure
Services
• Infrastructure Management
• Infra Projects / Consulting
• Security Consulting
• Managed Security Services
• Hosting Services
• Enterprise Appln Management
•
•eLearning content services
• Content Mgmt
• Learning Technology Services
Enterprise
eLearning
Services
N/W Mgmt
Server
Mgmt
Infrastructu
re
Application
Support
Security
Our Domain
Operations
Support
Sify Infrastructure Services - Focus
THE SIFY EDGE
ENGAGEMENT
GOVERNANCE
EXPERIENCE
SERVICE
INFRASTRUCTURE
SPECIALIST IN
REMOTE
INFRASTRUCTURE
MANAGEMENT
SERVICES
EXPERTISE
PROCESSES
Value Proposition
MULTI LEVEL ENGAGEMENT VALUE
Business
Process
Operations
•Business Service
Management
•Business Impact
Analysis
• Enhanced Productivity
- ITIL Best Practices
• Reduced Noise Levels
- Root Cause Analysis
with Six Sigma
•Cost reduction
savings to 50%
•Enhanced Customer
Satisfaction : Proactive approach
Impact on Business Strategy
“Sify Is Best Suited For Discrete Offshore
Remote Management”
Forrester Wave TM : Global Delivery Infrastructure
Management – December 2005
A history of robust topline growth
136.0
130
115.4
110
89.0
USD Million
90
69.0
70
49.1
38.9
50
30
30.2
15.3
10
-10
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
1 $ = Rs 40.58
EBITDA
11.9
15
7.1
5.6
10
2.1
5
USD Million
0
-5
-10
-15
-11.9
-20
-25
-30
-35
-24.2
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
1 $ = Rs 40.58
Net Income
3.7
20
0
-20
-9.1
-3.7
*
-40
USD Million
-7.6
-32.8
-60
-80
-100
-120
-140
-160
-180
-177.5
2001-02
2002-03
2003-04
2004-05
*Net Profit included USD 3.2 Mln on account of Profit on Sale of Land & Cricinfo
2005-06
2006-07
1 $ = Rs 40.58
Sify – The Opportunity
To leverage:
› Large
services opportunity in Indian and Global
markets
› Proven scalable business models in
 Access Media
 Portals
 Enterprise Services
› Leveraging
expertise
Technology platform for scale and
› Capable people
› Cash to fuel growth
Equity Structure ( Undiluted )
ADR s with Public
58.18%
Infinity Capital
41.82%
Others
0.002%
No of Shares 42,808,852
As of 30th Jun 2007