conferencia citi marzo 2012

7/25/2019 Conferencia Citi Marzo 2012

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March 28-29, 2012

Host by Citi

Entel ChileCiti Investment Research 20th Annual

Latin American ConferenceNew York, U.S.A.



3/22/20122

Table of contents

Industry Size and Competitive Environment

Company Overview

Business Segments

Financial Overview

(*) Values in IFRS



137%

41%

37%

39%

Mobile¹

Local²

FixedBroadband²

Pay TV²

Long Distance

3/22/20123

N.A.

Subscription: 0,11 US$/ min

Prepaid: 0,12 US$/ min

0,022 US$/ min

Broadband: 28-43 US$/ month

Básic: 23 US$/ month

DLD: 0,09 US$/ min

ILD: 0,29 US$/ min

Chilean telecom market: Mobile Services Leading sector

Chilean Telecom Market (Year 2010)

Telecom Market Size (Revenues) = US$ 7.6 bn (*)

(*) Exchange rate as of September 2011: $519.2

1 % over population2 % over homes

Source: Subtel, IDC, Pukara, Entel estimates

IT Services Others: includes HW, SW Deploy and Support, Integration andDevelopment, Education and Training and Consulting.

Penetration / Tariffs

Mobile

51%

Long Distance

3%

Datacomm

6%

Internet

8%

Pay TV

10%

Local

10%

IT Outsourcing

Services

6%

IT Services Others

6%



0

5

10

15

20

25

Services in Chile(in million)

Mobile Voice

Fixed Voice

MBB

FBB

Pay TV

27%

3/22/20124

Telecom Industry: Chile subscribers trends

7,0%

13%

Source: Entel

During 2012, MBB willreach FBB

39% 13%

13%67%

39% 13% 12%

28%

6% 93%8%

70% 0% 0%

70%

Penetration2010

CAGR 08-11 CAGR 11-14

116% 12% 4%

76% 6%

-1%

35%

27%

11%

Local trends are in line with worldwide trends:• MBB leading growth in the industry, accompanied by FBB and Pay TV• Mobile Voice continues growing at lower rates



3/22/20125

Company Overview



Entel Wireline

6%

Entel Mobile

21%

GTD

3%

Claro Mobile

8%

Claro Fixed

4%

Movistar Mobile

22%

Movistar Fixed

15%

VTR

10%

Direct TV

1%

Others IT

Companies

10%

Mobile Data Services DLD - ILD

40%42%

28% - 38%

3/22/20126

ENTEL27%

Source: Entel

Entel is the largest publicly traded telecom company in Chile

Entel Overview

Entel’s Market Share (December 2011)

Leading competitive position in main markets where itparticipates, based on quality services, technology andinnovation.

Moving to a new organizational structure, responding tofixed and mobile services convergence.

Wide range of integrated telecom and IT services supportedby solid execution and innovative process.

Top brand in Chilean telecom market.

2010 Telecom and IT Revenue Share

(*) Exchange rate as of December 2011: $519.2


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Source: “Kronos Chile January - December2011”

Entel is the top brand in the Chilean industry

Overall Image Survey Chilean Mobile Phone Sector (January-December 2011)

46

39

43

33 34 32

38

34 34

39

32

29

36

29 2925

33

24 27

35

17 1615

19 2119 19

13 14

20

ENTEL


http://slidepdf.com/reader/full/conferencia-citi-marzo-2012 8/353/22/20128

FO Cable toB.Aires andP.Arenas (Chile)

Panamerican

Santiago

Arica

Iquique

Antofagasta

La Serena

Valparaíso

Concepción

Valdivia

Chillán

Los Andes

Puerto Montt

Copiapo

FO Cableto Peru

Cable FO Cable to Bolivia

FO Cable to Argentina

and Atlantic ocean

FO Puerto Monttdestino

Coyhaique

Entel’s top quality services are provided through its extensive network…

Digital Microwave Transport NetworkFiber Optic Transport NetworkMobile Network(60 MHz in 1900 MHz Band)

Capacity 400 Gbps

BSC( 32 )

MSC-S(10)

MSC( 8 )

1 BSCIQUIQUE

ANTOFAGASTA

1 MSC-SANTOF.

1 MSC-S; 1 MSCVALP.

2 BSCVALP.

VALPARAISO

11 BSCSTGO.

SANTIAGO

1 MSC; 1 MSC-S

RANC.

RANCAGUA

CONCEPCION

1 MSC-SP. AREN.

1 BSC P. AREN.PUNTA ARENAS

1 BSCANTOF.

1 MSC-SP. MONTT2 BSC P.MONTT

PUERTOMONTT

1 BSC TEMUCOTEMUCO

LA SERENA1 BSC

SERENA

4 MSC-SSTGO.

1 BSCCOPIAPO

2 BSCRANCAGUA

1 BSC VALDIVIA

MGW(23 )

1 BSCSAN ANTO.

MSC : Mobile Switching Center

POP : Point of presence

BSC : Base Station Controller

RNC: Radio Network Controller

MGW :

Mobile Switching Server Center

Media Gateway

MSC-S :

RNC(25 )

4 MGW STGO7 RNC STGO

1 MSC-SCONC.

1 MGW IQUIQUE1 MGW IQUIQUE1 RNC IQUIQUE

2 MGW ANTOF.2 RNC ANTOF.

1 MGW1 MGW VALP.1 RNC VALP.

1 RNC1 MGW CONCEP.1 RNC CONCEP.

1 MGW P. MONTT2 RNC P. MONTT

1 MGW RANCAG.2 RNC RANCAG.1 MGW CURICO1 RNC CURICO1 MGW TALCA

1 RNC TALCA

1 MGW

1 MGW COPIAPÓ1 RNC COPIAPÓ

1 BSCQUILLOTA

1 MGW LA SERENA2 RNC LA SERENA

1 MGW V AL PO1 MGW QUILLOTA

1 MGW SN ANTON

1 BSC CURICO1 BSC TALCA

1 MGW CHILLAN1 RNC CHILLÁN1 MGW TEMUCO2 RNC TEMUCO

2 BSC CONC.1 BSC CHILLAN

1 BSC COYHAIQUE

1 MGW VALDIVIA1 RNC VALDIVIA1 MGW COYHAIQ 1 RNC COYHAIQ

IQUIQUE

1 MGW P. ARENAS1 RNC P. ARENAS

LA SERENA

1 MSC;1GMSC STGO.

1 MSCTEMUCO.

POP( 3.696)

POP: 4.204 (incl. FDT); 2G Sites: 4.182 (2.832 BTS + 478 Micro + 511 RP +361 FDT);

3G Sites: 2.659 (incl. FDT)



3/22/20129

ARICA

IQUIQUE

SANTIAGO

PTA. ARENAS

COIHAIQUE

CONCEPCIÓNLOS ÁNGELES

COPIAPO

ANTOFAGASTA

LA SERENAOVALLE

QUILLOTALOS ANDES

TEMUCO

VALDIVIA

OSORNO

PUERTO MONTT

VALPARAISOSAN ANTONIO RANCAGUA

CURICOTALCA

LINARES

Santiago

Arica

Iquique

Antofagasta

Viña del MarValparaíso

Concepción Chillán

Puerto Montt

Talcahuano

Calama

Temuco

Rancagua

CALAMA

COQUIMBO

VALLENAR

SAN FELIPE

SAN FERNANDO

CHILLANTALCAHUANO

NGN Presence

PTO. NATALES

Santa Cruz

Switches NGN

Casablanca

Paipote

Chuquicamata (San Jorge)

Los Andes - San Felipe - Nogales

Pichidegua

Castro

Fixed Access Network (NGN-IP) Fixed Wireless Coverage

Copiapó

La Serena

Coquimbo

Quillota

Curicó

Talca

Los Ángeles

Osorno

San Gregorio

Pichincha

Michilla

Lince

Pan de Azucar

Llanquihue

9

San Pedro de Atacama

WiMax Presence

WiMax Presence (Cluster)

Calbuco

La Chimba

Constitución Cerro Peñón

Alto Hospicio

Chiguayante

Nogales Queronque

Entel’s network provides services to the main cities of Chile(digital and NGN switches and Gigabit ethernet network).

Nationwide capacity for over 400,000 equivalent lines.

Copper and GPON access technology

2 natiowide coverage licenses: 100 MHz total spectrumfrequency in 3.5 GHz band, 20Mhz total spectrum frequency in900 MHz band.

... with presence all along the country



3/22/201210

NAP Miami

Río de Janeiro

Lima

Santiago

Los Angeles

Nueva York

OJUS Miami

ENTEL Bolivia(1 STM-1)

Entel also provides transportation capacity via global consortiumsFiber Optic and Satellites



3/22/201211

Entel is progressing forward in Social Responsibility

Third publication ofbiannual Sustainability

Report prepared underthe Global ReportingInitiative (GRI)

Entel Group maintainscommitment to United

Nations GlobalCompact …

Social Responsibilityis an essential partof Entel’s corporatemanagement…

Entel services andproducts play a centralrole under CSRframework, encouragingacademic excellence andimprovements in qualityof life

Second Phase of “Todo Chile

Comunicado” was deployed:as of to date it includes theconnection of 1,000 new ruralvillages along the countrywith mobile broadband,benefiting 2.7 milloninhabitants. The total projectreaches 1,400 rural areas and3.0 million people.

... Voluntarily manifestingthe ability to listen,understand and meet theexpectations andinterests of theCompany’s stakeholders...

... In order to ensurelong term

sustainability,contributing to thedevelopment

and welfare of society.



3/22/201212

Entel shares are traded in the Chilean stock market

Listed on Santiago stock exchange.

Market cap

1

: US$ 4.5 billion. Daily average trading volume2: US$ 5.7

million.

1: Exchange rate 484.71 Ch$/1 US$.- Stock price as of March 14, 2012.

2: Average from March 2010 to February 2012.

Highlights

As of February 29, 2012

Entel´s corporate governance at high standards.

Board of Directors composed by 9 members

Controlling parties appoint 7members

2 members are independents.

Board Committee composed by 3 Directors

2 members are independent.

Procedure related to market disclosure ofinformation.

Release of relevant information in company´swebsite.

Adoption of Ethic Code .

3: Altel is a wholly-owned subsidiary of Almendral (Holding Company) andits main controllers are Matte, Fernandez/Hurtado, Izquierdoand Gianoli Economic Groups.

Entel´s Ownership – Strong and experienced

Altel InversionesLtda.

54.8%

Pension Funds

9.5%

All Others

35.7%



3/22/201213

Corporate structureMain Operating Companies (Year 2011)

Total Revenue: USD 2.390 MM (*)

Total EBITDA: USD 992 MM

Mobile Business

Revenue: USD 1.905 M

EBITDA: USD 763 M

Voice, Data & Mobile

BroadBand

ChileWireline

Revenue: USD 610 M

EBITDA: USD 220 M

Local Telephony

Internet

Data services including ITLong Distance

Infraestructure Rentals andWholesale

Americatel Perú

Revenue: USD 43 M

EBITDA: USD 4 M

Call Center

Revenue: USD 51 M

EBITDA: USD 5 M

* Net of intercompanies revenuesValues divided by $519.2



3/22/201214

Business Segments



3/22/201215

Mobile



Ingresos Globales (Datos/voz)

2008-2013

0

200

400

600

800

1000

1200

2008 2009 2010 2011 2012 2013

I n g r e s o s ( U S $ b n )

Voz Datos

16

Ingresos Globales (Broadband/Non Broadband)

2008-2013

0

50

100

150

200

250

300

2008 2009 2010 2011 2012 2013

I n g r e s o s ( U S $

b n )

Non Broadband Broadband

3/22/2012

Mobile industry worldwide trends: Voice - Data

Total Mobile Revenues (data vs voice)2008 - 2013

Total Data Revenues (Broadband vs others)2008 - 2013

Total Mobile Revenues (voice and data), 2008 - 2013 Voice services declining inrevenue share.

Relevant increases in mobilebroadband share.

Within data, also Mobile Internet

(chat, browsing, digital TV andradio) and emails are growingrapidly.

voice data

Source: Informa Telecoms and Media

R e v e n u e

( U S $ b n )

R e

v e n u e

( U S $ b n )



• iPad corresponds to 6% of portable computer equipment sales in USA (2Q10)

• It is expected that by 2012 “Pads” exceeds Netbooks market (Canalys July2010)

• In 2014, smartphones will represent almost 40% of mobile equipment sales.

Source: (Forrester and IDC March 2010)

-

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014

Tablets

Netbooks

Notebooks

Desktop

Shipments by type of Equipment (U.S.A.)

Global TrendsTablets and Smartphones

17



4,214 4,4415,004

6,061

1,6611,769

1,605

2,341

126248

551

945

2008 2009 2010 2011

Prepaid Postpaid MBB

7,568

6,4576,001

9,347

3/22/201218

Strategic Focus

24%

Market Share as of December 2011**

Entel has a strong position in the mobile industryMobile Overview Entel’s Mobile Subscribers (in Thousands)

60 MHz in the 1,900 MHz band / GSM technology. 3.5G nationwide.First commercial HSPA+Dual Carrier network in LATAM.

Penetration at 137% in Chile, including mobile broadband

Strong market share at 40%, leading position in high value segments.

Market growth driven by mobile broadband and innovative VAS(Internet mobile and e-mail).

Competitive environment, with mobile number portability and newentrants expected in 2012.

Create value, sustained in top global service and best in classnetwork.

Revenue growth focused on value-added services, especially mobilebroadband and mobile Internet.

Adapt business processes to Fixed and Mobile convergence.

Expand VAS and MBB penetration, via flexible offerings (especiallynew enterprise M2M applications and smartphones).

Strategic alliances with technology providers and commercialpartnership. • (*) Nextel Market Share: 0.14%

• (**) Market Share measure over active customers• Source: Entel

16%

Cagr 08 / 11

Growth 10/11

Entel

40%

Movistar

39%

Claro

21%

Nextel

0%



142

192

285

401

2008 2009 2010 2011

3/22/201219

1998 a 2011

41%

Value added services and 3.5G growing at high rates

Value Added Services Revenues *(US$ Millions)

VAS / Outgoing Revenues(%)

* Including Mobile Broadband and datacards (as of December 2011 945 th. customers) -2008 / 2011 values divided by $519.20

41%

Cagr 08 / 11

Growth 10/11

EDGE

SMS WAPGPRS SMS PremiumXAT (SMS) MMS

EDGE nationwide

Video Streaming

PTT

Blackberry

3.5 G

In main cities3.5 G

NationwideHSPA+

Nationwide

HSPA+ DualCarriermain cities

10% 12% 13%

16%19%

25%

29%

2005 2006 2007 2008 2009 2010 2011

P fit bl li t b



19.818.2 18.2 17.6

2008 2009 2010 2011

618

586

644

763

42%41% 39% 40%

2008 2009 2010 2011

1,493 1,444

1,647

1,905

2008 2009 2010 2011

166182

197 194

2008 2009 2010 2011

3/22/201220

2 Minutes of usage.

19%

-4%

1. Average Revenue per User

16%

-1%

Profitable client baseMobile Revenues (US$mm)

Mobile EBITDA and EBITDA Margin (US$mm, %)

Blended ARPU1 (US$) MOU2 (Minutes/month)

2009 figures impacted by 45% drop in access charges

-2008 / 2011 values divided by $519.20

5%

8%

Cagr 08 / 11

Growth 10/11

7%

Th Wi li B i Chil



3/22/201221

The Wireline Business - Chile

Chile wireline offers integrated solutions focused on



Long Distanceand value added

services

81%

Internet

4%

Local Telephony

15%

Traffic

Business

24%

Network

Rentals

76%

Long Distance and value

added services

9%

Internet

9%

Data services

35%

IT Services

22%

Local Telephony

25%

3/22/201222

US$ 316 million US$ 40 millionUS$ 254 million

Chile wireline offers integrated solutions focused onthe enterprise segment

Revenue distribution per segment – Year 2011

Corporate and SME * Residential *Services to Other Telecom

Companies *

* Includes intercompany RevenuesValues divided by $519.20.

Corporate and SME segments: leading position



Leading position and expertise in traditional data

services (42% market share), growing through theintegration of IT services.

Market trends: integrated offerings includingIT/telco; convergence of Fixed & Mobile; bundledsolutions over IP networks.

Standardized service offering for all companies

based on cloud computing.

3/22/201223

Corporate and SME segments: leading position,consolidating IT services

Overview•Ciudad de Los Valles is interconnectedto the network of six data centers.

•Deliver wide range of IT Services;

•Cloud Computing Services•On- demand solutions•Dedicated virtual servers•On-demand hosting and storage services

Corporate Strategic Focus SME Strategic Focus

Continue leading traditional Telco market (integrated voice,

data and Internet).

Grow market share in IT (O/S, data center, virtual servicesand on-demand services).

Strengthen service model for Fixed & Mobile convergence.

Increase market share.

Increase coverage and capacity by deploying networkfiber optic (GPON) access.

Provide IT services aligned with SME requirements(virtual infrastructure and on-demand services);working in development of fixed & mobileconvergence.

Services to other telecom companies: Optim izat ion of



TrafficBusiness

24%

NetworkRentals

76%

3/22/201224

Services to other telecom companies: Optim izat ion of

network usage

Note: Includes Intercompany Revenues

Overview

Strategic Focus

2010 Revenues

Leading network infraestructure provider to other

telecom operators and related companies.

Service provided to Intercompany business

represents more than 75% of Network Rentals.

Cost-effective provider of Traffic desk, managing

credit risk in high volumes related to Wholesale,

Incoming Traffic and Value Added Services.

Provide quality service of rental network capacity to related companies and other operators.

Leverage current network capacity.

Traffic routing optimization to assure low tariff for LD. Focus on low risk customers.

IFRS values divided by $519.20.

US$ 62 mm

US$ 192 mm



146

184210

220

28%

34%38% 36%

20%

50%

80%

0

80

160

240

2008 2009 2010 2011

EBITDA EBITDA Margin

3/22/201225

Chile Wireline EBITDA and EBITDA Margen(US$ millions)

5%

Chile´s Wireline Business reporting solid growth

Strategy focused in the enterprise segment.

-2008 / 2011 Values divided by $519.20

Cagr 08 / 11

Growth 10/11

15%



Americatel Per ú

3/22/201226



LD

44%

Wholesale

25%

Data,

Local

Telephony

& NGN31%

2008

40 39 3943

2008 2009 2010 2011

Revenue Mix 2008 – 2011: Changing to services provided over own access network

Continuous growth in datacom and local telephonyservices in the enterprise segment in the Lima Area.Recently adding IT services.

Growing data-IP services over WiMax, focused on theenterprise segment.

Long distance services have decreased, mainly due toregulatory changes.

3/22/201227

Americatel Perú

8%

OverviewRevenues (US$ millions)

Strategic Focus

Change in revenue mix, increasing services over Americatel´s own access network in Lima (WiMax,copper) and IT, leveraging Chile experience.

Harvest along the mature LD business.

3%

Cagr 08 / 11

Growth 10/11

LD

24%

Wholesale

26%

Data, Local Telephony &

NGN

50%

2011



3/22/201228

Financial Overview



769 773859

992

40% 40%41%

42%

2008 2009 2010 2011

268 274333 348

2008 2009 2010 2011

1,939 1,9162,092

2,390

2008 2009 2010 2011

378

356

401459

2008 2009 2010 2011

3/22/201229

Consolidated Figures (US$ MM )

16%

14%

5%

14%

Revenues

EBITDA and EBITDA Margin

Operating Income Net Income


Returning to high growth Cagr 08 / 11

Growth 10/11

9%

7%

9%

7%



Mobile

38%

Mobile handsets

32%

Data / TI

17%

All Others

13%

3/22/201230

Total = US$ 733.5 million(including postpaid handsets around US$ 230 million)

19% 19%16%

CAPEX mostly driven by Mobile Expansion

*Average Exchange rate of each year.

CAPEX / Revenues

CAPEX Strategy 2011 CAPEX Breakdown

Historical CAPEX * - Excluding postpaid handsets (US$ in Millions)

Keep tech. / quality edge in mobile,managing growth and providing broadbandsolutions.

Minimum investments in mature services.

Mobile (including postpaid handsets)accounts 70% of CAPEX.

Bulk of investment driven by demand.

360 338396

502

19% 19% 18%20%

2008 2009 2010



244 251

281 288

2008 2009 2010 2011

3/22/201231

3%

* Cash Flow is defined as: EBITDA - Capex - Net financial expenses

Cash Flow *(US$ Millions)

Strong cash flow in line with mobile expansion

--2008 / 2011 Values divided by $519.20.

Cagr 08 / 11

Growth 10/11

6%

Liquidity and debt ratios reflects the company’s healthy



3/22/201232

Liquidity and debt ratios reflects the company’s healthyfinancial position…

• Fully hedged to F/X exposure.

• 43% of debt is at fixed rate.

• Moody’s rating: Baa1, S&P rating: BBB+ (both with stable outlooks)

• Dividend policy: Up to 80% of Net Income.


2008 2009 2010 2011

Current Ratio 1.2 1.1 1.0 0.9EBITDA/Financial expenses 26.2 35.4 45.1 49.9

Gross Financial Debt/EBITDA 1.0 0.8 0.7 0.6

Total liabilities /(Equity+ Minority interest) 1.2 1.1 1.1 1.0

Net financial debt (US$ Million) 637 658 544 651

Net financial Expenses (US$ Million) 24 20 16 14

with a comfortable debt payment schedule



2012 2013 2014 2015+Leasing Bank

204

4

404

12

3/22/201233

… with a comfortable debt payment schedule

Total gross debt = US$ 624 million as of December, 2011.

2012 maturities were refinanced during December 2011, which considers the payment of interestquarterly or semiannually and a single repayment in December 2014.

Maturities(US$ Millions)



3/22/201234



Thank You !Investor Relations

[email protected] Andres Bello 2687 – Las Condes – Santiago_Chile

mailto:[email protected]

mailto:[email protected]

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