The Government is planning to hive off BSNL’s tower business into a separate subsidiary with estimated valuations of cUSD3.8bn. BSNL has a total of c60,000 towers with a good mix of towers in rural and urban markets. Furthermore our industry analysis suggests these towers have good fibre connectivity as well. With all telcos focussing on enhancing data coverage, BSNL’s focus on the tower business via a separate subsidiary will increase tower supply to the sector and key beneficiaries in our view will be 4G entrants.
One of the challenges for 4G entrants has been network coverage given their dependence on the 2.3 GHz spectrum. We highlight coverage issues can be resolved in two ways: (a) adding sub1 GHz spectrum and (b) adding more towers.
With not much clarity on possible auctions of spectrum (more…)
Industry checks and Chinese news indicate that the telecom regulator, MIIT, may consider policy changes in interconnection fee favoring China Unicom/China Telecom, and allowing China Mobile to enter the Broadband market.
(MIIT), the industry regulator, may consider introducing two policies to the telecom industry: (1) permitting China Mobile (CM) to provide broadband services; and (2) reducing interconnection settlement fee from RMB0.06/min to RMB0.03/min when China Unicom (CU) and China Telecom’s (CT) mobile calls terminate on CM’s network, while CM will continue (more…)
One of the foundations of our China Telecom Technology is the development / support of the domestic technology standards, and domestic telecom equipment vendors is the Chinese government’s pre-eminent policy objective. This approach results no doubt in structural over-investment by the operators and lower returns on invested capital. The decisions to build three parallel national wireless networks based on three different standards and then deploy 4G TD before China Mobile’s 3G TD network is loaded may make no economic sense but (more…)
Ms. Anuradha Mitra, Principal Advisor (Financial & Economic Analysis), Telecom Regulatory Authority of India (TRAI) met Telecom Industry Analysts and here are some of the feelers the officer has given during the interaction.
The regulator indicated that failure of two auctions has given a reason to re-think the spectrum pricing mechanism. Also, the flat 2x multiplier to derive the price of 900Mhz spectrum across circles could be tweaked to adequately capture the benefits of more efficient spectrum depending on circle dynamics.
The recent reduction in data tariffs (more…)
In an attempt to capture the possible Revenue Market Share gains, we perform a circle-wise analysis to capture the possible gains for the company. We expect incumbents RMS to improve in established circles.
We highlight that we have relied on incremental market share as a key criteria to determine the steady revenue market share for all circles. Separately, we assume that new GSM entrants will continue to lose market share given their stretched balance sheets and inability to benefit from any meaningful Mergers & Acquisitions (we don’t expect any near-term clarity on M&A policy and this will prevent new entrants being disruptive/gaining scale).
In addition, we expect the (more…)
The Internal Remittances Market in India is to the tune of USD 40 Bn with money flowing from Urban to Rural Parts of India. The Following Chart Shows the Comparison of Mobile money Transfer vs Indian Postal Money Order on Parameters such as, Min requirement, Limits on Transaction, Technology, Advantage and Dis-advantage. (more…)