How RCom gets Free Ride on Reliance Jio’s 4G Network ?

RCom Gets Free 4G from RJioRCOM has entered into active infra sharing with 4G entrant Reliance Jio, which allows RCOM to offer 4G services without investing much capex. RCOM active sharing limits the upside for the buyer of RCOM towers assets as demand by RCOM (anchor tenant) for additional towers in the near to medium term may not be much.

In our view RCOM had the option to either ask for a premium from Jio for trading of 800 spectrum or leverage Jio’s 4G network and offer 4G services. Charging a premium may have allowed RCOM to pay down some debt and invest in 3G but may have prevented RCOM from participating in 4G.

RCOM has chosen to offer 4G by leveraging Jio’s 4G network. Given that in the medium to long run 4G is likely to be more popular than 3G, (more…)

How is India Graduating towards Digital Money Society ?

Digital Money in IndiaIn India, cash still rules. 41% of India’s households are unbanked and credit card penetration is a measly ~2% (debit card penetration is much healthier at ~33%). The situation is similar on the retailer side, where only

There are several trends/ initiatives (described below) under way that will transform the financial landscape in the country. Over the coming years, we are set to see a sharp rise in debit card penetration, a shift of banking transactions from offline to online, a greater adoption of electronic payments and greater use of mobiles for conducting electronic transactions. These developments present large opportunities for players operating in the broad mobile money ecosystem.

Pradhan Mantri Jan Dhan Yojna (PMJDY) – The long-term vision of PMJDY is to lay the foundation of a cashless economy and (more…)

Can Reliance Jio Exploit the Net Neutrality Loophole for Free 4G ?

NetNeutrality Loophole IndiaWe were the Strongest Advocates of 100% Neutral Internet in India. We recommended the TRAI specifically not to leave any loopholes and had clearly written in our recommendations about the potential loophole of Intranets / Closed Electronic Communications Network, yet the TRAI has kept the door wide open for exploitation with veto power in its hands.

How Reliance Jio / Airtel / Other Telcos will Exploit the Loophole ?
The regulator clearly suggested in its recent tariff order that rules prohibiting differential pricing for data will not be applicable to Closed Electronic Communication Networks (CECN) or in other words, the intranet platforms of telcos. Hence telcos may attempt to monetize such an opportunity/regulatory exemption. That said, telcos will find it difficult (more…)

Bharti Airtel Bids for Videocon’s 4G LTE 1800 Band Spectrum

Airtel 4G LTE Spectrum Bid on VideoconSunil Mittal led Bharti Airtel announced that it has entered into a definitive agreement to acquire right to use 2X5 MHz spectrum in the 1800 MHz 4G LTE band from Videocon. This deal, if concluded, will mark Videocon’s exit from the telecom market. This deal happened amidst the cancellation of earlier sale of Videocon’s spectrum to Idea Cellular. The acquired spectrum in all six circles (valid until December 18, 2032) is contiguous in nature and can be used to offer LTE data services. The acquisition will further strengthen Airtel’s 4G LTE footprint, with LTE (both FDD and TDD) spectrum covering 93% of its overall revenue or 19 out of a total 22 circles.

Airtel will acquire Videocon’s spectrum (2X5 MHz in the 1800 MHz band) in six circles namely Bihar, Gujarat, Haryana, Madhya Pradesh, (more…)

Indian Internet Companies Revenues Soar, Losses Mount

Indian Internet Companies ProfitsAnalysis of recently reported 2015 financials of 22 unlisted e-commerce companies reveals some interesting trends: (1) these companies posted revenue growth of 191% yoy, with marketplaces leading the pack at 475% revenue growth (not GMV), (2) in most other categories (barring marketplaces), loss was magnified by high cash-burns from 1-2 players (for instance, in real estate). Several companies (general + real estate classified companies in particular) spent aggressively on advertising to gain traffic and market-share.

e-tailers is the only category where loss margin declined yoy (though loss in (more…)

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