Archive for 'telecom' Category
Indian Wireless / Mobile Subscriber Base – 646 Mn
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
Wireless Price Stability – End of Tariff War ?
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 »
Bharti Airtel Managements Views on African Wireless Business
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%+.
Dark Night Before Dawn – Signs of the Light
Indian competitive situation should improve as players focus on repairing their balance sheet. Tariffs have moved up in a few cases. Bharti’s African acquisition is now complete. Sentiment should move up as management unveils the details of their African Strategy.
Despite strong competition, Bharti has lost less than 120bps revenue market share in last 12 months. New players are launching to meet roll out obligations rather than to compete. Possibility of spectrum trading? Tariffs have stabilized over
past 6-8 months.
We expect Companies could go into a balance sheet repair mode thereby limiting competition either on tariffs or on Read the rest of this entry »
Uninor Gaining Traction – Too Early to Decide if it Can Sustain
Uninor – the JV between Unitech and Telnor reported an operating loss increase of 19% sequentially to USD220m. Despite rising operating loss (cumulative operating loss at cUSD570m), the company maintained its capex guidance.
Revenue for the quarter increased sequentially by 84% to USD16m, but not enough for the company to gain some scale (revenue market share less than 0.4%). Rising operating losses for Telenor suggests a tough operating environment, but marginal improvements in wireless KPIs do provide some hope.
Subscribers – Active subscribers of Uninor improved from 48% to 63% and this, combined, with usage improvement, suggests some better traction (MOU up 40% q-o-q). Uninor emphasized its dynamic pricing plan [Badalta Discount] and suggested that c60% of existing subscribers are part of this pricing plan. We note that Uninor appears to have an edge over the incumbents and other new players in terms of the technical capability to offer location-based pricing Read the rest of this entry »
Sunil Mittal takes Control of Bharti Airtel Africa
The management of Bharti airtel hosted a conference call to update on the completion of Zain Wireless takeover in Africa. Excerpts from the call is as follows.
Management expects growth to be driven primarily by increasing 1) Penetration 2) Usage and 3) Data revenues. Market opportunity is huge, backed by confluence of higher youth population and high growth in GDP (>5% p.a.)
Tele‐density is ~20% with some countries as low as 10‐12%. MoU at 50‐60 minutes vs. global average of ~300 minutes and Indian Read the rest of this entry »
How 3G chart could be as different as 2G ?
In India, one rarely witnesses or anticipates “launch hype” around product introductions in the share prices of their makers. This is quite unlike the US or Hong Kong where stocks often rise in a spectacular fashion on the back of first few days/weeks’ successes of some new gadgets or sales at new property projects. So, could the 3G launch be an exception?
First let us see why most people are unenthused ? First, companies have paid apparently astronomical amounts to be able to start the business and none have bothered to justify why. Second, the 3G service launches in most countries in the past were a normal event with a few benefits here and there but nothing that changed the prospects of telecom service providers comprehensively. As such, Read the rest of this entry »
DoT on TRAI’s 2G Spectrum + Equipment Certification
You are already aware of the ongoing tug of war between 2G incumbent operators and TRAI over the latter’s recommendation on 2G Spectrum. Analysts met Sr. DoT officials and here are the key takeaways from the meeting.
No Clarity on 2G Spectrum TRAI Recommendations’ Decision by DoT or Cabinet Ministry – DOT is still contemplating if it wants to transfer the decision marking on spectrum issues to eGoM, but it may consider this to transfer to eGoM. DOT did not provide a timeline by which the government will make a decision on TRAI recos, but it stated that such policy matters take time and that it was not sure if the decision will be made within a month. Read the rest of this entry »