The just in time execution telecom specialist in India Idea Cellular owns 3G spectrum (900 or 2100 or both) in all of its top-5 circles and nine of its top-10 circles (except Karnataka, where it owns LTE spectrum). Idea owns LTE spectrum (1800 band) in four of its top-5 and six of its top-10 circles. It owns either 3G or LTE spectrum in all of its top-10 circles and owns 3G and LTE spectrum in five of the top-10 circles. Idea’s 3G spectrum footprint covers nearly 80% of its revenues, LTE footprint covers 61%, 3G or LTE footprint covers 87% and 3G and LTE footprint covers 53% of its revenues.
Having spectrum is important of course (more…)
Billions of dollars of capital already employed with another few perhaps waiting in the wings to be deployed in the upcoming mega battle for market share—is there even an argument that Reliance Jio Infocomm would not destroy any sense of sanity and value-creation possibility in the Indian telecom industry ?
We believe there is more than an argument, if one were to (rationally) assume that R-Jio intends to have a business case at some point with that ‘some point’ being within a reasonable timeframe. One needs to appreciate that wireless business cases in India to be viewed as a series of 20-year projects given the naked reality of large spectrum renewal. Our expectation of ‘P&L rationality’ from R-Jio ironically flows from the very fact that it has deployed billions of dollars in the business. Large balance sheets need large P&Ls to support a business case and large P&Ls need a certain (large) market size (more…)
Reliance Communication’s 850 Mhz spectrum can allow 4G LTE entrants to have 10MHz in the attractive 850 spectrum band, allowing them to have both capacity and coverage, which incumbents may find tough to replicate in a few markets However benefits for 4G entrants will be short term, unless they renew these radio waves as and when they are put to auction. Separately, if the pending RCOM-SSTL merger is approved, 4G new entrants can access an additional 5MHz of spectrum in 850 in eight additional markets, and this could be used for coverage.
RCOM is using the 850 spectrum band today for voice and data cards, and once the spectrum is deployed for (more…)
The contrast between the exuberance in through-the-cycle private equity funding in the India internet industry and the sobering realities hitting valuations of listed India-focused internet firms is stark. For the listed entities like MakeMyTrip competition from similar/different business models, price and/or marketing aggression, low barriers to entry, easy funding for competitors/substitutes etc., – all of which are impacting metrics of these firms and their valuations. The public/stock market, it seems, wears a lens for scrutiny quite different from the private side.
The internet space critically need examination that if the ‘winnability’ of business models is premised primarily on price competitiveness, deep funding (more…)
Post Airtel’s 4G launch we expect both Idea and Vodafone to commercially launch 4G in select urban cities, mainly from a branding/creating consumer perception perspective. The top 3 telcos are looking to offer 4G to prevent their subscribers from being poached by Jio, which will launch as a 4G-only telco. In our view, both Vodafone and Idea will launch 4G only in select cities (rather than entire states) where they are seeing material data uptake and an increase in improvement of 4G smartphones. Given declining 4G smartphone prices and considering that 4G data tariffs could be cheaper/at par with 3G, we believe that 4G uptake may positively surprise despite a smaller rollout.
Airtel launched its 4G because (more…)