Reliance Communications Subsea cable business

May 2012

IMPORTANT NOTICE

This presentation and the discussion that follows may contain “forward looking statements” by Reliance

Communications Ltd (“RCOM”) that are not historical in nature. These forward looking statements,

which may include statements relating to future results of operation, financial condition, business

prospects, plans and objectives, are based on the current beliefs, assumptions, expectations,

estimates, and projections of the directors and management of RCOM about the business, industry

and markets in which RCOM operates. These statements are not guarantees of future performance,

and are subject to known and unknown risks, uncertainties, and other factors, some of which are

beyond RCOM’s control and difficult to predict, that could cause actual results, performance or

achievements to differ materially from those in the forward looking statements. Such statements are

not, and should not be construed, as a representation as to future performance or achievements of

RCOM. In particular, such statements should not be regarded as a projection of future performance of

RCOM. It should be noted that the actual performance or achievements of RCOM may vary

significantly from such statements.

Disclaimer

1

Subsea cable business

– Subsea cables are the backbone of global internet,

data and voice communications

– Subsea cables are the most economical mode of

carrying data from one point to another around

globe

– Subsea cable business is similar to a leasing

business

– Three dimensions: connectivity, bandwidth and

contract length

– Point to point prepaid leases of 10-15 years,

called IRU;

– Point to point leases, typically contracted for 1-3

years, called IPLC;

– Point to multipoint connections to access the

internet, called IP (Internet Protocol), typically

contracted for 1 year

Cable Landing

Station

Cable Landing

Station

Metro PoP

Area

Metro PoP

Area

Branching

Unit

Subsea

repeaters

Subsea System

Metro land

backhaul

links

Customer

Customer

Cable Landing

Station

Cable Landing

Station

Metro PoP

Area

Metro PoP

Area

Branching

Unit

Subsea

repeaters

Subsea System

Metro land

backhaul

links

Customer

Customer

Subsea network infrastructure

Business highlights

2

Stable free cash flows with no debt for an attractive yield play

Favourable industry dynamics

Significant unused capacity available for monetisation

Strong relationships with a diverse customer base

Unique assets in an industry with high entry barriers

Presence in key global markets with strong regional connectivity 1

2

3

4

5

6

Overview of subsea cable network

3

(a) CLS = Cable landing station, IP / Tx PoP = IP points of presence

(a)

(a)

Global business, with a leading presence in high growth emerging and developed markets covering US,

Europe, Middle East, and Asia, including China and India

Overview of subsea cable business

4

Subsea cable assets spanning 68,000 Route Kilometers

Landing at 46 locations in 26 countries with 31 partners

Metropolitan networks in 45 cities

85,000 sq. ft. of data centre space

403 customers including ISPs, content providers, mobile and integrated telecom operators

326 employees including 68 sales employees in 13 regional offices

Excellent customer base, with more than 70% of customers with us for > 3 years

Routes

Cables Trans-Atlantic Intra-Asia

Middle

East-West

Middle

East-East

India-West India-East

FA-1

FEA

FNAL

FALCON

HAWK

Our subsea cable network has a significant position in 6 out of 8 global data traffic routes…

5

Source: TeleGeography

Lit capacity %

Trans-Atlantic 30%

Trans-Pacific 22%

Intra Asia 20%

Latin America 14%

Middle-East and India 13%

Share of serviced routes 63%

…which have the highest growth potential

14.7%

16.4%

2.2%

34.3%

1.6%

34.3%

85.3%

83.6%

97.8%

65.8%

98.4%

65.8%

0% 20% 40% 60% 80% 100%

Trans-Atlantic

Intra Asia

Middle East-West

Middle East-East

India- Wast

India- East

% utilized % unutilized

Our subsea cable network has significant spare capacity …

6

(a) Based on subsea cable with longest useful life operating on respective routes

(b) Middle East-East route capacity is used by the same customer on the India-East route and counted only once in the total utilized lit capacity

Substantial capacity available for sale (Mar 12) Significant useful life (year end)(a)

(b)

2026

2027

2031

2022

2031

2022

2012 2016 2020 2024 2028 2032

Trans-Atlantic

Intra Asia

Middle East-West

Middle East-East

India- Wast

India- East

Year end

…80% of capacity available to be monetised

Four key trends are driving the growth in IP traffic

7

Increasing

number of

devices

– By 2015, there will be nearly 15 billion network connections via devices (up from 7 billion in 2010), including

machine to machine, and more than 2 connections for each person

More internet

users – By 2015, there will be nearly 3 billion internet users – more than 40% of the world’s projected population

Faster

broadband

speed

– Average fixed broadband speed is expected to increase four-fold from 7 Mbps in 2010 to 28 Mbps in 2015.

The average broadband speed has already doubled in the past year from 3.5 Mbps to 7 Mbps

More video – By 2015, 1 million video minutes – the equivalent of 674 days – will traverse the internet every second

Source: CISCO VNI (Visual Networking Index) – Forecast of June 1, 2011

Global IP traffic has increased eightfold over the past 5 years and will increase fourfold from 2010 to 2015

Global IP traffic is expected to grow 4x between 2010-2015

Japan

Asia-Pacific

Middle East / Africa

Central / Eastern Europe

Western Europe

Latin America

North America

2.2 billion

27 Mbps (266%)

22.3 EB/month (218%)

1.3 billion

8 Mbps (191%)

4.7 EB/month (604%)

1.3 billion

7 Mbps (154%)

2.0 EB/month (699%)

5.8 billion

25 Mbps (359%)

24.1 EB/month (350%)

727 million

63 Mbps (312%)

4.8 EB/month (235%)

902 million

20 Mbps (229%)

3.7 EB/month (424%)

2.3 billion

36 Mbps (290%)

18.9 EB/month (295%)

Connection IP traffic growth Broadband speeds

8

Source: CISCO VNI (Visual Networking Index) – Forecast of June 1, 2011

Connections will double and speeds will quadruple by 2015

3 Billion Global internet users

14.6 Billion Global network connections

1.9 Billion Global internet users

7.4 Billion Global network connections

100,000,000 100,000,000

Annual Global IP Traffic

966 Exabytes

7.2 Billion World’s 2015 Population

2015

28 Mbps

300% Average Global Fixed

Broadband Speed

Growth

7.0Mbps 2010 January 2010

January 2015

24.8 Gigabytes Traffic generate by average

internet user per month

9

Source: CISCO VNI (Visual Networking Index) – Forecast of June 1, 2011

Demand doubling every 18 months

Trans-Atlantic (Tbps) Intra-Asia (Tbps) Middle East-West (Tbps)

Middle East-East (Tbps) India-East (Tbps) India-West (Tbps)

3.4 13.0

78.0

2005 2011 2016

CAGR

25%

CAGR

43%

1.2

9.5

52.4

2005 2011 2016

0.1 0.6

4.0

2005 2011 2016

0.0 0.2

1.7

2005 2011 2016

0.0 0.7

5.6

2005 2011 2016

0.0 0.6

5.0

2005 2011 2016

CAGR

41%

CAGR

41%

CAGR

50%

CAGR

46%

CAGR

52%

CAGR

54% CAGR

106%

CAGR

52% CAGR

78%

CAGR

50%

Rapidly increasing number of devices, growing internet user base, faster broadband speeds and more video

driving demand

10

Source: TeleGeography

Forecast : demand growth to exceed price decline

11

Growth in demand is forecast to more than offset the decline in prices on all routes

Forecast demand growth

(2011-2016 CAGR)(a)

Historical price decline(b)

Forecast price decline

(2011-2016 CAGR)(b)

Trans – Atlantic(c) 43% (12)% (17)%

Intra – Asia(c) 41% (20)% (20)%

Middle East – West(d) 46% (22)% (26)%

Middle East – East(d) 50% (22)% (26)%

India – West(e) 52% (21)% (20)%

India – East(e) 54% (21)% (22)%

(a) Change in cumulative purchased capacity

(b) Change in median monthly lease prices for single, unprotected 10 Gbps wavelengths which exclude installation fees and local access

(c) Historical price decline CAGR between 2005-2011

(d) Historical price decline CAGR between 2007-2011

(e) Historical price decline CAGR between 2008-2011

Source: TeleGeography

One time capex completed

12

Design capacity increased 7x to 48.5 Tbps by using 40G technology

Added new landing stations and improved existing terrestrial networks in Asia, Middle East

and Continental Europe

In the two-year period ending Mar-11, invested US$297m in capex

After this investment, future capex would be modest

Financial performance for fiscal year ending Mar-12

13

Billed Income of US$330m

Stable operating cost structure at US$153m

Billed EBITDA of US$178m resulting in Billed EBITDA

margin of 54%

Capex of US$70m which included payment of new

landing station and terrestrial backhaul

US Dollar denominated revenue

Zero Debt

Low marginal tax rate

Distributable free cash flow of US$116m

Conclusion

14

Uniquely positioned global business with significant competitive advantages and high entry barriers

Operating in key markets with highest growth potential where demand is doubling every 18 months

Excellent customer base

80% of asset capacity to be monetised

No debt on these assets

Well positioned to deliver predictable and sustainable free cash flows

Competitive dynamics

Design, installed and utilized capacities

Appendix I

Competitive dynamics: differing motivations of key competitors

Consortium

subsea cable

owners

– Typically two types of consortium members;

domestic focused operators and regional/global

players

– Domestic focused operators reserve capacity for

serving home markets and do not sell capacity in

the open market

– Some regional/global players sell capacity in the

open market

Private subsea

cables, acquired in

early 2000’s

– Purchased at fractions of construction costs

– Harvesting cash, upgrade their capacities only

when needed

– Some have debt service obligations

New private

subsea cables

– Primary consideration is recovering investment

cost

– Some have debt service obligations

15

Source: Company's data, TeleGeography

Route Consortium Private In construction /

Planning

Trans-Atlantic

(FA-1 and 7 other

systems)

TAT-14 (34 members),

Columbus III

(30 members)

AC-1 & AC-2 (Level3),

Apollo (C&W), Hibernia

Atlantic, TGN-Atlantic

Hibernia Express

(privately owned)

Intra-Asia

(FEA, FNAL and 5 other

systems)

SEA-ME-WE 3

(33 members),

APCN-2 (43 members)

Reach NAL,

EAC-C2C (Pacnet),

TGN-IA

ASE, SJC and APG (all

consortium)

Middle East – East and

West

(FEA, FALCON, HAWK

and 5 other systems)

SEA-ME-WE 3, SEA-

MEWE 4 (16 members),

IMEWE (9 members),

EIG (16 members)

(partially complete)

TGN-Eurasia

(partially complete)

GBI, TGN-Gulf (all

private)

India – East and West

(FEA, FALCON, HAWK

and 2–4 other systems)

SEA-ME-WE 3, SEA-

MEWE 4, IMEWE, EIG

(partially complete)

TGN-Eurasia (India

West) TGN-Indicom, i2i

(India East)

GBI

Cable ownership and indebtedness levels Key competing assets

Each route has different key players and different demand and price dynamics

Design and installed capacity by route

16

Gbps Mar-10 Mar-11 Mar-12

Design capacity(a)

Trans – Atlantic 18,720 18,720 18,720

Intra – Asia 10,120 10,120 10,120

Middle East – West 9,800 9,800 9,800

Middle East – East 160 160 160

India – West 9,560 9,560 9,560

India – East 160 160 160

Total 48,520 48,520 48,520

Installed capacity(b)

Trans – Atlantic 2,390 4,750 4,750

Intra – Asia 3,770 3,770 6,670

Middle East – West 1,925 3,000 5,100

Middle East – East 55 55 80

India – West 1,440 1,440 2,700

India – East 55 100 140

Total 9,635 13,115 19,440

(a) Design capacity at 40G is the capacity of a cable between its start and end points if it were upgraded to 40G

(b) Installed capacity is the maximum capacity available between the start and end points of the cable

Utilized lit capacity by route

17

Gbps Mar-10 Mar-11 Mar-12

IRU

Trans – Atlantic 586 686 876

Intra – Asia 1,116 1,139 1,269

Middle East – West 16 30 120

Middle East – East – – –

India – West 28 28 28

India – East – – –

Total 1,746 1,882 2,293

IPLC

Trans – Atlantic 782 963 1,641

Intra – Asia 280 286 294

Middle East – West 53 75 75

Middle East – East(a) 1 3 5

India – West 39 41 27

India – East 1 3 5

Total(a) 1,154 1,367 2,041

IP

Trans – Atlantic 152 191 242

Intra – Asia 64 88 96

Middle East – West 12 14 17

Middle East – East(a) 50 50 50

India – West 30 41 95

India – East 50 50 50

Total(a) 308 384 500

Total utilized lit capacity(a) 3,208 3,633 4,835

(a) Middle East-East route capacity is used by the same customer on the India-East route and counted only once in the totals