Archive for August, 2010
With the cannibalization of the Wireless SIM Cards in India, the number of connections at 664 Mn is a mere number and what matters most is the Wireless Revenue Market Share. Over the past 2 years, Government owned BSNL is the Biggest Loser followed by Reliance Communications. Idea Cellular, Voadafone India and New Operators have increased their market share.
The following Chart Shows the Latest Revenue Market Share of Mobile Operators in India. Read the rest of this entry »
The Indian telecom sector added 17 mn subscribers in July 2010, taking the total mobile subscriber [Read SIM Cards, due to Multiplicity of SIMs] base to 646.4 mn.
- Bharti Airtel – Addition of 2.6 mn (3.0 mn last month), total base at 139.2 mn
- Reliance Communications – Addition of 2.5 mn (2.8 mn last month), total base at 113.3 mn
- Vodafone Essar India: Addition of 2.4 mn (2.7 mn last month), total base at 111.5 mn
- Idea Cellular: Addition of 1.9 mn (2.2 mn last month), total base at 70.8 mn
- Tata Teleservices (including Tata Tele (Maharashtra) Ltd): addition of 2.3 mn (2.3 mn last month), total base at 74.8 mn
- BSNL: Addition of 1.2 mn (1.1 mn last month), total base at 68.1 mn
- Aircel: Addition of 1.6 mn (1.6 mn last month), total base at 43.3 mn
We would like to highlight the Myths and Realities in the Indian Wireless Industry.
New entrants too focused on rural areas – DoCoMo witnessed the highest jump in proportion of subs coming from rural areas (11% in last two quarters) though still remains low overall (20% v/s 33% avg). Even Uninor, albeit on a small base, has a relatively high rural proportion at 34%. Both Bharti and Idea are at ~37% with even Vodafone at 36% despite its perception of being “urban centric.”
Post-paid tariffs are currently 40% higher than pre-paid tariffs – Post-paid rev/min, which was similar to pre-paid Read the rest of this entry »
The Telecom tariff war that began earlier this year from the new operators financed by dare devil bankers and private equity funds appears to be stabilizing. The reversal of traffic to the incumbents (after they matched tariffs, importantly) suggests that this round of action has gone to the incumbents, one would do well to remember that (1) no meaningful challenger has been knocked out of the ring yet and (2) there are more rounds likely to come.
However, with onset of substantial and concentrated (non-rural) capacity, more than optimal number of players in the industry, Read the rest of this entry »
The management of Bharti Airtel Ltd, led by Manoj Kohli plans to introduce affordability and high usage in its African portfolio which is currently a high price environment (with tariffs in some markets as high as Europe/US according to Bharti). We believe the current market environment in Africa is supportive.
Some of the key points about replicating Indian Wireless business model in Africa that are in favor of Airtel are,
- Bharti’s 15-country portfolio has a population is 459m as of June 2010. Share of population living in urban areas in Africa is ~40% according to Bharti and expected to grow to 40%. This compares to 30% of India’s population living in urban areas.
- The youth population in Africa accounts for a fourth of the global youth and had a median age of 17-18 years. The working population is estimated to be higher than that in China and the middle class is 400m people, expected to growth to 500m. [Does this mean, if you are not in Africa, you are not in to Wireless Business ? ]
- GDP growth in 27 economies in Africa is 5%+.
In-line with Global Practices, App stores offered globally by handset and platform vendors, telecom operators and others, Bharti’s Airtel App Central was launched in Feb-10. Airtel Claims 2.5MM downloads in first month, 13MM in four months. Most apps downloaded are free (80-90% globally) .Small revenue opportunity for app store host as typically 70% share goes to the developer. We are of the opinion that Applications and other content to become conduit of advertising and we disapprove higher telecom operator market share to deter the spirit of Innovative Developers.
With reference to Advertising on Apps Platform, Airtel is of the opinion that Advertiser interest is increasing. Consumer reaction turning more positive: Ericsson survey found that consumers were receptive to m-advertising if relevance was considered. Handset vendor, telcos, equipment vendor, other service providers interest increasing: iAd platform, Nokia’s proximity SMS, Google-AdMob, etc In the context of Advertising supported model, we believe Read the rest of this entry »
At the end of 2009, the Online / Internet Advertising market in India was a mere 3% of the total expenditure of Advertising Market in India with bulk 43% with Newspapers and the next 40% pie with TV, according to Yahoo! India. Here is an excerpt on the state and the evolution of Internet Advertising in India as per Yahoo!
Internet Advertising Market is still small because the number of users on Internet is <5% of population is a Myth because 25 Mn Users read English Newspapers while there are 50 Mn Internet users and the Ad revenues is 7,000 Cr / year in newspapers while it is around 1,000 Cr for the Web.
Case Study – Advertisers haven’t seen basic rationale for advertising online. A leading auto manufacturer in India, stated that over 80% of their consumers & prospective consumers are online. Yet, less than 3% of their budget is invested online! Read the rest of this entry »
India with a second largest population of 1.1 Bn has just 6% of Indians connected via the internet. USA is ranked 28th in the world in connection speeds with a speed of 5 .1 Mbps while India is still struggling with 256 kbps as broadband and adding to the woes of consumers is the il-legal Fair Usage Policy introduced by market players like Airtel and Tata Indicom / Photon+.
It has been clearly evident that adoption of Internet can accelerate business productivity, thereby generating income, jobs and government revenues in emerging economies. The key steps that can help spur the growth of internet in India are,
- Recognize data networks and Internet as critical national infrastructure