Telecommunications & Technology
BSNL Cellone which offered Rs 30 SMS Pack for Post-paid Users has withdrawn the benefits of SMS to any mobile and is now restricting to BSNL Network Only and is now limited to 100 / day. All SMS beyond 100 per day are charged at Rs 0.50 / SMS or as per tariff plan whichever … Read more
EBITDA margins expanded on the back of better network utilisation, especially for Idea. The management contends that its network utilisation metrics lags that of Airtel and that it is yet to realise further margin upsides due to this.
Airtel outperforms Idea in network optimization: Two important metrics of network utility – minutes per co-location and revenue per co-location – suggest that Airtel is well ahead of Idea in leveraging in current infrastructure as shown below.
India GSM operators’ subscriber base increased by 3.5 mn subscribers in Apr-13, according to data released by COAI. The Mar-13 subscriber additions were primarily driven by Vodafone and Idea, while Bharti also reported a meaningful increase in subscriber base. The India GSM subscriber base is now 664.5 mn, down from the peak of 680.1 mn … Read more
Uninor / Telenor India Revenues for Q1-2013 degrew 30% affected from the scale of 13 to 6 circles, but organic revenues in the six operating circles grew 7%. Uninor added 1.4mn VLR subs in the 6 circles during the quarter, with a churn of 5% from 12% previously. Uninor does not look to lower the aggression which could cap any expected RPM hikes by incumbents like Airtel and Idea.
ARPU and MOU have also increased 5% and 10% respectively to INR94 and 401/subs/month. It has reduced the RPM by 3% during the quarter, offering current RPM of 24paise/min. With an arbitrage of 11 paisa./mins vs incumbents (idea, Bharti RPM at 35paise/min), it continues to fight for market share with lower price offering.
A quick analysis of publicly available financials of mid-size players, viz., Tata DoCoMo and Aircel group indicate that they would require to hike prices by 10-15% just to service the Interest Cost. Though the cash burn has been funded by debt so far, the lack of equity financing leaves them with no alternative but to support the new round of price hikes. It is important to note that the tariff hikes led by incumbents (primarily Airtel) in mid-2011 failed partially because of the lack of follow up from challengers, i.e., Tata Docomo, Aircel and even Idea.
Wireless Indian Industry Trends from our recent circle-level retailer sampling and interactions with Operators indicate that tariff increases and smaller players restricting their footprints to fewer circles should add 150bps to QoQ revenue growth rate over normal seasonality.
The frequency of top-ups has been increasing. The mix also has been improving as upselling (to higher denomination vouchers) has
seen some success. In this round of tariff increase, no telco has played spoilsport until date.
Indian Mobile operators raised tariffs in June 2011 which led to an increase in RPM in subsequent quarters. However a tariff war and RPM pressure returned and tariff hikes were not sustained. Many Investors questioned us on how the recent industry actions of lower discounting and raising RPM compared to 2011.
Not only had industry financials deteriorated from 2011, there is the pressure of significant regulatory costs faced by all operators. Industry over capacity is getting addressed as new entrants as well as existing operators (like Tata and Aircel) are shutting cell sites/circles selectively.
Indian telcos have the lowest amount of spectrum allocations among Asian peers – on a relative and absolute basis. In terms of subscribers per MHz metrics, Indian telcos are at 11-15mn vs. 3-5mn for the Chinese and 1-2mn for the Indonesian telcos. For this metric, we adjust subscriber numbers for multi SIM phenomena. Average spectrum … Read more
In India, Virgin Mobile started its MVNO (though later changed, as a JV partner to Tata Indicom) in 2008. The company used Tata’s CDMA network to offer its services under the brand Virgin mobile and focused on attracting the youth segment with a heavy focus on advertising lower tariffs. Virgin, along with Tata, was the first to introduce “1p/sec call rates” and “get paid for incoming calls” like offers in the country. After failing to make an impact in a market with already low tariffs, Virgin decided to sell its stake to Tata.
India is a diverse Country with Large Population like China and here is how they are going to Play the MVNo Game in China.
Wireless Spectrum prices in India peaked with the 3G auction [2100 MHz] at Rs 33,501m/Mhz (pan- India), driven largely by policy uncertainty around license renewals and future availability. Telecom Spectrum costs since then are rapidly falling and stand at Rs 23,786m/Mhz (pan-India) for the 1800Mhz band. They are likely to fall further since auctions have failed in key markets, which would necessitate a further reduction in reserve prices.
The government is obligated to auction the entire spectrum