The Future Forward Looking Statements Certain statements in this - - PDF document

The Future

Forward Looking Statements

Certain statements in this presentation concerning our future growth prospects are forward looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, fluctuations in earnings, our ability to successfully integrate acquisitions, competition in our areas of business, client concentration, liability for damages in our contracts, withdrawal of tax incentives, political instability, unauthorized use of our intellectual property and general economic conditions affecting our industry.

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Subex at a glance Understanding the telecom business The Subex value proposition and Market details Engagement & Delivery Financials

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Subex today…

Industry Leader

• Comprehensive BSS product Suite
• Market Leader in Business Optimization for four

consecutive years, Analysys Mason

• World’s No.1 provider of Fraud Management & Revenue

Assurance solutions

*Forbes 2010

# RCR Wireless 2010

Financial Strength

• More than US$ 100 M in Revenue
• EBITDA higher than most other BSS vendors

Global Presence

• Development centers in India, US and UK
• Over 200 customers and 300+ installations in over 70

countries

• Customers include 26 of world’s top 50 service

providers* and 16 of top 20# wireless operators worldwide

Strong Subexian Base

• Global workforce, with local presence at all locations
• Over 1,100 Subexians working together to deliver

market leading software products

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Subex - Global footprint

Denver, US Ipswich, UK London, UK Dubai, UAE Bangalore, India Singapore Sydney, Australia 5

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Subex at a glance Understanding the telecom business The Subex value proposition and Market details Engagement & Delivery Financials

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What We Are Seeing in the Market…

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What do operators need to do?

Move towards Business Optimization

 Improve their responsiveness

 Need to respond in days, not weeks

• r months

 Focus on customers

 Really “know” the customer  Improve all aspects of customer experience  Understand and leverage churn

 Sweat their assets

 Know their network and services better  Identify and remove process bottlenecks  Leverage their biggest asset – data CSPs know they need to do all this

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Subex at a glance Understanding the telecom business The Subex value proposition and Market details Engagement & Delivery Financials Financials

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The need to plug the Business Optimization gap…

 BSS environment consists of thousands of systems; from Excel to large legacy mainframe systems to 3rd parties  Hundreds of complex processes span those systems & people  Significant data inconsistencies and process gaps exist  “Are they working as intended?” How do we know? Business Optimization is about monitoring those processes and systems, ensuring they are working as intended, correcting when not and ultimately optimizing them

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Subex Value Proposition – Business Optimization

Protected Revenues Managed Costs Assured Operations Business Optimization

Collect all revenues

Revenue Assurance

Prevent losses (Fraud and defaulted payments)

Fraud Management

Proactive risk reduction

Credit Risk Management

Reduce unnecessary expenditure

Cost Management

Manage inter-carrier and partner expenses

Partner Settlement / Route Optimization

Reduce/defer CapEx Asset discovery & reconciliation

Data Integrity Management

End-to-end operational visibility; Timely and credible analysis; Improved, optimized business processes

ROCTM

+ +

Subex is the Market Leader in the Business Optimization space for 4 consecutive years

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12 PROTECTED REVENUES MANAGED COSTS MANAGED SERVICES CONSULTING SERVICES SaaS (SOFTWARE AS A SERVICE)

ROC Revenue Assurance ROC Fraud Management ROC Credit Risk Management ROC Partner Settlement ROC Route Optimization ROC Cost Management ROC Data Integrity Management

ASSURED OPERATIONS

Customer Experience Management Product Performance Management Margin Driven Management

BUSINESS OPTIMIZATION SOLUTIONS

Subex ROC Portfolio

ROCware in Action

Usage Data

Financial Data Subscriber Data Network / Inventory Data Any other data Margin Analysis Customer Experience Analysis Product Success Monitoring Propensity Analysis Actions Responses Course corrections Enhancement / Optimization …

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Addressable Market Size

 Operational Managed Services (outsourcing) growing at 30% CAGR – great opportunity  Revenue Management

 Cost Mgmt, Credit Mgmt and Operational Intelligence present growth opportunities

 Growth in emerging markets (APAC, CALA) expected to be higher than NA and EMEA  Software as a Service/ Service Bureau gaining traction

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 CAGR : 12 %  Subex Market Share: 5.56%

Data Integrity Management

 So far addressed by inventory players  Challenges with multiple inventory and migration issues has brought DIM into limelight  Potential for large MS deals  RA extension to cover network related aspects  DIM projects have delivered very high ROIs

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 CAGR : 9%  Subex Market Share: 7%  Major Players: Oracle, Ericsson, Clarity

Partner Settlement

 NA

 Most CSPs handle IC & partner settlement in-house  CSPs will spend money in content settlements, creating opportunities for ISVs

 CALA

 Growing at 7% CAGR  Heavily focused on mobile settlements  Currently use ad-hoc, in-house IC systems, turning to commercial solutions now

 EMEA, APAC

 Developed areas starting to spend on content partner settlement  More roaming settlement costs than Americas  Growth will be driven by mobile

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 CAGR : 5 %  Subex Market Share: 2.3%  Major Players: Intec, Amdocs, Huawei, Ericsson, Convergys, Telarix

Revenue Management

 Revenue Management consists of Fraud Mgmt, RA, Cost Mgmt, Credit Mgmt & Operational BI  Subex leader in this space for the last 4 years  Growth driven by mobile subscriber growth  APAC growing at 13% CAGR.

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 CAGR : 5.5%  Subex Market Share: 10.6%  Major Players: HP, cVidya, WeDo

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Subex at a glance Understanding the telecom business The Subex value proposition and Market details Engagement & Delivery Financials

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Engagement & Delivery model

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Subex Managed Services Center

• f Excellence

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Subex Managed Services Credentials

Domain Expertise

• Given product development

legacy

• Industry leaders in Business

Optimization and Service Activation solutions

People

• Experience over number of

domains and technologies

• Excellent understanding of

business processes

• Rigorous technical, business

process, cultural and soft skills training

Cost Advantage

• Optimum mix of on-shore and
• f-shore resources
• Well negotiated infrastructure

and hosting agreements and streamlined processes

Continuous Improvement

• Incremental efficiency during

the period of engagement

• Function optimization,

technology refresh,

• rganizational redesign

Engagement Flexibility

• B-E-S-T Framework (Build-

Enhance-Support-Transform)

Operations Experience

• Over 50 Managed

Services programs

• 24 customers

around the world

• More than 20 billion

CDRs processed

monthly

• With applications running on

more than 100

servers

Private Online Community

https://www.subexlive.com

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A Decade of Industry Recognition

Rocware 2.0 Swisscom Best Supplier for Innovation Award, 2010 Analysys Mason Market Leader in Business Optimization 2007, 2008, 2009 & 2010 Tech Fast 50 India 2007 Tech Fast 500 APAC 2006 Verizon Best Supplier Award, 2007 8 Most Innovative Indian Companies, 2005 Most Promising Company, 2005 AT&T Outstanding Supplier Award, 2007 World Billing Awards, 2005: Best Revenue Assurance Project at KPN Best Customer Success Story, 2004 SBC Supplier Recognition Award, Customer Service, 2003 TMF Operational Excellence Award, 2003 Best Provisioning System OSS World Best Customer Service Award, 2001 Best New Product and Operational Excellence Awards, 2003 Sun Microsystems Best ISV Partner Of The Year, 2007 23

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Global Telecoms Business Innovation Award, 2011

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Global customer snapshot

Americas EMEA APAC

Representative list only- Not comprehensive

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Worldwide partners & alliances

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Subex at a glance Understanding the telecom business The Subex value proposition and Market details Financials Engagement & Delivery

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Progression Over The Years

 FY07 – year of Azure acquisition – growing economy – shorter learning curve as the acquisition was in the existing space  FY08 – year of Syndesis acquisition – worsening economy – longer learning curve as acquisition was in an adjacent space  FY09 – acquisition fully integrated – plummeting economy – efforts on to stabilise the business

Progression Over The Years

Contd.

 FY10 – steady state operations – weak economy – cost synergies fully achieved – revenue growth is slow  FY11 – back to revenue growth – economy recovering slowly – telco focus shifting to BSS and improving business efficiencies – repositioned the business to meet changing needs of telcos

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Key Achievements – last two years

 Telcos need to focus on business analytics and actionable intelligence to survive – ROC is squarely positioned in this space and is starting to gain significant traction – mentioned by Frost & Sullivan as one of the key solutions for the future  Launched a new business model – Managed Services; telcos looking to de-risk and hence are focusing more on Managed Services; signed several multi-year, multi-million Dollar deals  Customer Experience Management starting gain priority within telcos – data integrity problems causing customer dis-satisfaction – introduced Data Integrity Management as a service and won several contracts for that

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Key Achievements – last two years

Contd.

 Telcos looking at platforms and not point solutions in a bid to rationalise number of providers – ROC, an integrated BO platform, has fuelled the mind share that we have from telcos  Revenue Operations Centre (ROC™) has taken centre stage making us a key partner of telcos – deeper relationships  Large Managed Services deals are being won resulting in higher average contract value – as against pure license deals only  Telcos looking closely at reducing cost through improved efficiency and risk management; continued investment in R&D – created 2 new products, 3 new applications and strengthened technological leadership in several

• thers

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In short, over the years

we have changed from being a minor partner to a telco with short term license deals consisting of low annuity component and poor long term visibility to a significant partner to a telco with long term managed services contracts consisting of high annuity component and superior long term visibility

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Progression Over The Years – Products

E B I T D A : 4 1 % E B I T D A : 1 6 % E B I T D A :

• 2

2 % E B I T D A : 1 1 . 5 %

All Figures in Rs. Mln.

E B I T D A : 2 3 . 8 % E B I T D A : 3 3 %

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Metrics behind the Turnaround – RMS

Current qualified pipeline – US$ 350 Million – up from US$ 180 Million 4 years ago Order Intake in FY11 – US$ 74.5 Million – growth of 45% over FY10 – CAGR of 27% over 3 years Revenue grew 17% – slated to grow 20%+ in the coming years EBITDA at 40% OI from MS as % of Total OI – FY10 (8%), FY11 (23%), FY12E (40%) % of MS in Pipeline has moved up from about 4% in April 2009 to about 18% in Aug 2011

Core Business Performance

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CAGR= 17.6% CAGR= (37.6)% * Core business includes revenues from product sales, managed services and support from Business Optimization products ^ Non Core business includes revenues from staffing services and service fulfillment

Discontinuation of Non Core business can take the overall EBITDA margins at ~40%

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Debt – FCCB

FCCB 1 (Original) FCCB 2 (Re-structured) Face value $ 39 mn $ 98.70 mn Coupon 2% 5% Redemption value $ 53 mn $ 140.55 mn Redemption date March 2012 March 2012 Conversion to Equity price Rs.656.20 of Subex Equity share Rs.80.31 of Subex Equity share Outstanding as on Dec 31, 2010 $ 39 mn $ 54.80 mn

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Summary

 We help telcos increase their revenue and become more profitable  We offer a holistic platform that enables the telcos utilise their extensive data repository to gain deep insights and increase revenue and profit  We manage the entire business

• ptimization part of their business

thereby enabling telcos to focus on their core competence  Our business model is non linear and hence very profitable – high EBITDA  Managed Services has opened up a huge market and will lead to high growth rates in the coming years  Long term contracts leading to sustainable, long term, annuity revenue with high profitability

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Thank You