Cantv Overview. Presentation to the Investor Community. November, 2006

Transcription

1 Cantv Overview Presentation to the Investor Community November,

2 Compañía Anónima Nacional Teléfonos de Venezuela (CANTV) The leading telecommunications services provider in Venezuela and the country s only integrated telecommunications company Revenue In millions of US$ * Broadband Mobile 1, % Increase / (Decrease) 2, % % 1, % Fixed % Our Vision: To be the preferred provider of integrated telecommunications services in Venezuela and to fully satisfy our customers' specific needs, following strict ethical and performance standards VNT LISTED NYSE Sep'05YTD Sep'06YTD Strong performance in a market that offers profitable growth opportunities Investor Relations Contact: Gregorio Tomassi, CFA +58 (212) invest@cantv.com.ve 2 Cantv Overview - November 2006 NYSE: VNT

3 Safe Harbor Statement This document contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Actual results could differ materially from those predicted in such forward-looking statements. Factors which may cause actual results to differ materially from those discussed herein include economic considerations that could affect demand for telecommunications services and the ability of the Company to make collections, inflation, regulatory factors, exchange controls and occurrences in currency markets, competition, labor relations, legal proceedings and the risk factors set forth in the Company s various filings with the Securities and Exchange Commission, including its most recently filed Annual Report on Form 20-F. The Company undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of Cantv Overview - November 2006 NYSE: VNT

4 Agenda Review of strategy, operative indicators and financial Country Strategy Fixed Line Service (excluding broadband) Mobile Service Broadband Service Financial Legal and organizational structure Ownership and governance 4 Cantv Overview - November 2006 NYSE: VNT

5 Venezuela snapshot Basic indicators (2005) Total GDP Nominal (US$ billion) Real growth (3 years CAGR) Per capita (US$) Others Population (million) CPI inflation (YE) Currency FX (Bs./US$) Country sovereign debt rating (Jun. 2006) Fitch BB- Moody s Standard & Poors Oil relevance - domestic and global Oil is important for the Venezuela s economy 2005 oil indicators Oil exports (US$ billion) % of total exports % of total fiscal revenues % of total GDP % 5, % Bolίvares (Bs.) 2,150 B2 48,1 87% 48% 16% B Political structure and economic regime Form of Government Next Presidential election Foreign exchange regime Monetary regime Capital mobility Communication industry (2005) Communication GDP Nominal (US$ billion) Real growth (3 years CAGR)...and places the country among the world largest oil players 2005 crude oil indicators Reserves Production Exports Millions b/d ,01 1,56 Democratic, Presidentialist December, 2006 Controlled Prices and interest rates under control Subject to the FX regime rules % Global ranking % of global total 7.0% 4.3% 3.7% Sources: Central Bank of Venezuela, Ministry of Energy and Petroleum, OPEC, 1999 Constitution, Executive decrees, Fitch, Moody s, Standard & Poors 5 Cantv Overview - November 2006 NYSE: VNT

6 Latam. comparisons 2005 Nominal GDP (US$ billion) GDP per capita (%) Venezuela Brazil Mexico Argentina Colombia Chile Peru Ecuador Venezuela Mexico Chile Argentina Brazil Peru GDP Growth (%) CPI Var. % (Average) Venezuela Argentina Peru Chile Colombia Ecuador Mexico Brazil Venezuela Argentina Brazil Colombia Mexico Chile 5,026 7,298 7,124 4,799 4,320 2,841 Colombia Ecuador 2,656 2, Sources: IMF (World Economic Outlook, September 2006). 6 Cantv Overview - November 2006 NYSE: VNT Ecuador Peru

7 Strategy To To become become # 1 in in mobility mobility Communications for everyone in anytime, anywhere, whatever their needs Build Build value value on on broadband broadband leadership leadership Socially responsible corporation Capture Capture emerging emerging mass mass markets markets Stimulate Stimulate traditional traditional businesses businesses Excel Excel operational operational efficiency efficiency and and customer customer satisfaction satisfaction 7 Cantv Overview - November 2006 NYSE: VNT

8 Fixed Line Service (excluding broadband) Fixed lines penetration Cantv Fixed lines in service % of population 25% 20% Argentina Chile Brazil Mexico Thousands 15% Venezuela 2,657 2,884 3,098 3,222 10% 5% Source: Pyramid Research ( ) BMI Research ( ) Fixed Lines Market Share As of June % = 3.85 mn lines Source: CONATEL Movistar 20% Others 1% CANTV 79% G* * Marks the middle range of guidance Lines in service increased 7.0% on YoY expanding our customer base to over 3.2 million Our fixed-wireless telephony and prepaid plans are key growth drivers Higher number of lines and traffic are offsetting impact of tariff freeze 8 Cantv Overview - November 2006 NYSE: VNT

9 Mobile Service Mobile lines penetration % of population 70% Chile Cantv Mobile (Movilnet) subscribers Thousands 60% 50% 40% 30% 20% 10% Mobile Subscribers Market Share Argentina Venezuela Brazil Mexico Source: Pyramid Research ( ) BMI Research ( ) As of June 2006 Others (GSM) 1% 100% = 15.8 mn subs Digitel (GSM) 12% Movilnet (CDMA) Movistar 42% (CDMA) 45% Source: CONATEL 2,681 3,106 5,188 7, G* * Marks the middle range of guidance Mobile revenue increased 68.5% YoY in Sep 06 YTD, continuing as our main growth driver Net adds in 3Q06 of more than 188k take subscriber base to almost 6.8 million 3Q06 compared to 3Q05 total usage grew 60.9% but ARPU declined 5.8% driven by higher penetration in lower income segments 9 Cantv Overview - November 2006 NYSE: VNT

10 Broadband Service Broadband subscribers % of population 5% 4% Chile Cantv Broadband Subscribers Thousands 3% 2% 1% 0% Source: Business Monitor Online Report Broadband Market Share As of June % = 439k Subs Source: CONATEL Others 17% CANTV 83% Argentina Brazil Mexico Venezuela G* * Marks the middle range of guidance ADSL (ABA) lines experienced strong increases over the last eleven quarters As of September 2006, ABA subscribers totaled 406 thousand lines Cantv increased its market share from 79% to 83% YoY in 1H06 ADSL and private circuits revenue increased 22.5% YoY in 3Q06 10 Cantv Overview - November 2006 NYSE: VNT

11 Financials In millions of US$ * and growth percentages referred to constant Bs. Revenue Growth (%) EBITDA Growth (%) Margin (%) Basis points incr. Free cash flow Growth (%) Cash Debt , , (4.6) 32 (400) (1,700) 513 (14.1) , (49.9) (21.5) G** 3,205 3, , ,400 1, Sep 06 YTD 2, , Capex 78 Dividends G** 256 Net Cash (197) 15 (109) YTD Debt / Equity * Translation of financial statements data to US$ has been performed, solely for the convenience of the reader, converting Bolivar amounts at the official exchange rate at the end of each period. ** 2006 Guidance 11 Cantv Overview - November 2006 NYSE: VNT

12 Capital Expenditures % of total Capex 2005 % revenue** 2006G* Fixed Telephony Mobile Telephony Broadband Others 5 NM 3 100% % Total Capex * Marks the middle range of guidance ** % of corresponding 2005 revenue Capex is increasing aligned with our growing business 2006 Guidance 12 Cantv Overview - November 2006 NYSE: VNT

13 Ownership and Governance Ownership Structure Board of Directors Class A Shareholders as of May 31, 2005 Verizon Shares (thousands) 196,401 % Stake 25.0% Appointed by: B C Telefónica Venezuela Holding Others Bandes* Employees and retirees 54, ,900 51, % 0.05% 6.6% 6.5%** CEO and 8 principal members 7 All shareholders D Verizon Others *** 28, , % 51.4% 787, % 1 1* Employees & Retirees Venezuelan Government * Represents the Venezuelan Government ** Neutral vote *** Around 90% in the form of ADS * Veto rights on certain decisions according to by-laws A diversified and supportive shareholder base 13 Cantv Overview - November 2006 NYSE: VNT

14 Legal Structure Private investor Corporation Legal Entities Cantv Telco, C.A. Telecomunicaciones Móviles Movilnet, C.A. Corporación Cantv, C.A. 100% 100% 100% 100% 80% Cantv.net, C.A. Cantv Finance, C.A. 20% Caveguías, C.A. Business Fixed, Internet, Broadband Wireless mobile Internet Broadband Circuit's Invest Broker Yellow Pages Directory business Status Operative Company Operative Company Established in 1990 Active Executive Directors Operative Company Established in 1995 Operational Consolidation with Cantv since de 2001 Operative Company 14 Cantv Overview - November 2006 NYSE: VNT

15 Organizational Structure of Cantv CANTV CHAIRMAN CAVEGUÍAS Kathleen Downing de Izaguirre MOVILNET José María De Viana EXCUTIVE VICE CHAIRMAN INTERNAL AUDITING MANAGMENT Arturo Varona Vicente Llatas INTERNAL COMMUNICATIONS EXTERNAL COMMUNICATIONS INSTITUTIONAL RELATIONS LEGAL Amado Fuguet Bernardo Fischer Elba Monterola Francisco Palma FINANCE AND PLANNING HUMAN RESOURCES CORPORATE MARKETING REGULATORY AFFAIRS Armando Yañes Pedro González Francisco Sananez Eloína Pérez 15 Cantv Overview - November 2006 NYSE: VNT

16 Organizational Structure Executive Vice-presidency CHAIRMAN EXCUTIVE VICE CHAIRMAN SPECIAL PROJECTS COMMITTEE Margarita Pérez TECHNOLOGY AND OPERATION CANTV MASS MARKETS SERVICE CENTRE Miguel Benatuil Baptista Oscar Santamariña Iglesias Luis De León TELECOM OPERATORS Alfonso Olombrada CANTV ENTERPRISES & INST. Ramón Ramírez Araujo REVENUE ASSURANCE Félix Ohep Gómez 16 Cantv Overview - November 2006 NYSE: VNT

17 17 Cantv Overview - November 2006 NYSE: VNT