Telecom Spectrum – Hot Topic for Rest of 2013

The TRAI has invited Public Comments on the Auction of Telecom Spectrum in India. Incumbents led by Vodafone faces the expiry of its main 900 and 1800MHz licences in India late in 2014 along with the ongoing tax demand for CGT on its original acquisition which remains unresolved. Vodafone is arguing that the spectrum licences entitle the holders to renewal, a point it is making in court, but it is also engaging in government plans for an auction which could be held late this year. Currently the regulator is considering the reserve pricing of the spectrum and given failed auctions earlier in the year we expect a recognition that the pricing of the 3G auctions was not the right reference point and that reserve prices will be reduced.

Uncertainty remains over whether Vodafone, Airtel and Idea will be allowed to use each others’ spectrum for 3G intra-circle roaming which has (more…)

Hotspot 2.0 – Threat of ubiquitous Wifi for Telcos

Hostpost 2.0 WiFi CoverageResearch estimates that only 17-18% of wireless data is actually consumed while in transit. The majority of data is consumed at home, office or semi-stationary locales like restaurants, cafes, parks etc.

Smartphones and tablets are generally capable of accessing both networks – cellular and WiFi. With the proliferation of smartphones, the WiFi industry is developing a new network standard (Hotspot 2.0), which would alleviate much of the log-in and authentication (more…)

Baidu Mobile Monetization Rising, TAC Cost Higher A Surprise

Baidu Engineering TeamBaidu Management that mobile revs for the first time accounted for >10% of total revs in 2Q13. This would indeed mark a significant improvement from levels of 5-6% that we had earlier estimated. Mobile represents 20+% of total Baidu queries, and that mobile (incl. tablet) CPC’s are at least a 40~45% discount to desktop despite improving click-through. It thus seems clear that conversion on mobile significantly lags that of desktop.

Baidu’s Traffic Acquisition Cost [TAC]
We were quite surprised with the surge in TAC to RMB880m up 182bp QoQ to 12.2% of total revs, and well above 50-100bp sequential growth expected by many. While the co attributed most of the growth to increased (more…)

JustDial Profit Growth SlowsDown

Justdial SEarch Growth and ProfitsJustDial’s revenues increased 38.4% YoY in FY13 to Rs3.6bn (inline with our expectations). Search-related revenues increased 37.9% YoY owing to a 20.8% YoY growth in advertisement campaigns and a 14.2% YoY growth in realizations. Profit increased 26.7% YoY in FY13, 7% below consensus estimates, owing to other income of Rs135mn and exceptional cost of share issue expenses of Rs15mn.

Ad campaigns increased 20.8% YoY to 206,500 (vs 171,000 in FY12 and our expectation of 207,500). Realisations improved 14.2% YoY (vs 15.5% YoY expected by us) to Rs17,320.

JustDial received 364mn search requests in FY13 (up 43% YoY). Internet (182.6mn, up 47% YoY) and mobile-based (41.9mn, up 208% YoY) searches were the largest contributors. Voice-based searches increased 20% YoY to 139mn whilst SMS searches increased 47% YoY to 0.9mn. (more…)

Google Gets Serious Wearable Computing with Glass – Funds HiMax

Google Glass Means Serious BusinessGoogle and Himax have entered into an agreement to invest in Himax Display Inc. (“HDI”; Himax’s subsidiary company that manufactures LCOS chips/modules), in order to fund production upgrades and expand capacity for LCOS chips/modules used in applications such as Google Glass. While the deal would be completed by end-3Q13, Google will hold a 6.3% interest in HDI plus 8.5% preferred share options. Google will join the core group of HDI shareholders, including Intel Capital Corp, KPCB Holdings and Khosla Ventures.

Himax will also invest an additional amount in HDI to fund its (more…)

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