Topics

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Web 2.0 / What is Value per User for Web 2.0 Companies Like Facebook, YouTube, etc ?

« on: March 28, 2015, 01:02:36 PM »

We attempt to derive Enterprise Value per User for all the Popular Web 2.0 and Social Platforms and here is how the Top 25 companies rank against each other.

Platform Facebook Google Yahoo Whatsapp King Tumblr Twitter Amazon AOL Pinterest Skype Ebay Yelp Snapchat LinkedIn Pandora MatchDating Zynga Groupon Netflix YouTube Tinder Spotify Instagram OpenTable Uber GrubHub

Global Monthly Active Users 1,350 1,230 1,000 450 356 300 284 270 215 200 196 155 135 100 90 82 80 71 54 51 50 50 40 30 15 8 5

Enterprise Value $199,158 $308,884 $33,230 $19,000 $4,059 $1,100 $29,538 $160,336 $2,643 $11,000 $8,500 $65,545 $3,146 $19,000 $30,585 $2,872 $4,900 $1,170 $4,639 $28,098 $1,650 $1,000 $7,000 $1,000 $2,600 $40,000 $3,201

| Value Per User $148 $251 $33 $42 $11 $4 $104 $594 $12 $55 $43 $423 $23 $190 $340 $35 $61 $16 $86 $548 $33 $20 $175 $33 $173 $5,000 $640

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SmartPhones & Apps / How do Instagram News Feed Ads Look ?

« on: March 28, 2015, 12:34:23 PM »

New ad formats are appearing on Instagram and we think material advertising dollars will start to ramp by 2016. In 4Q14, Facebook official launched its advertising platform (testing previously) with newsfeed ads, and recently with multi-photo carousel ads that can tell a story by letting you swipe through four branded images in sequence. These ads are appealing with visual experience and are native (looked like organic photos). See below for example of Instagram ads.

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SmartPhones & Apps / Massive Privacy Violation by Android Apps - Google Evil ?

« on: March 28, 2015, 12:21:03 PM »

Android App Eco System is filled with Apps where there is Massive Privacy Violation including by the owner of the eco-system Google itself.

For example, Airdroid is an App that lets you share files between your Laptop and Mobile. When we installed the App a year ago, they asked us to grant access to what was really necessary for the App to Function. However, while upgrading the same it asks for permission to read my Contacts,  SMS, Phone, Location etc which are of no use for the App.


This is not just the case with Airdroid, but every App wants to Steal my Contacts, SMS etc and Google is also included. Google once upon a time was a strong advocate of Privacy has turned Evil with no regards to empowering consumers i.e why can't it let consumer decide what access he wants to grant to the App ?

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SmartPhones & Apps / Instagram's Latest User Statistics & Growth

« on: March 28, 2015, 10:21:14 AM »

Instagram is global with more than 70% of users outside the U.S. According to Pew Internet Research survey, 26% of adult Internet users (up from 17% in 2013) or 21% of the entire US population use Instagram. Importantly, 53% of young adults ages 18-29 now use the service compared to 37% a year ago. While Facebook has 87% of users between18-29, Instagram likely has higher teen usage

Over the last year, Instagram significantly expanded its user base to 300mn monthly active users, up from 27mn when Facebook agreed to acquire the company in April 2012 (closed in August 2012). Instagram added 120mn users last year and is also the largest social network outside of China, excluding Facebook.

Per Facebook, users spend 21 minutes a day, on average, using the app. This disclosure compares to comScore US data that suggests 4.4 hours per user per month or 8.5 minutes per day.

Facebook is seeing people using both Facebook and Instagram and also video and other ad products in combination. Instagram has strong engagement, with 30B photos shared to date (up from 16B in 9/13), 2.5B Likes daily (up from 1B in 9/13), and 70M photos shared per day (up from 45mn in 9/13).

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4G / LTE / 2015 Mega Spectrum Auction Clearing Prices

« on: March 28, 2015, 08:59:22 AM »

After 19 days and 115 rounds, India?s largest ever spectrum auction has concluded. The auction saw sharp bidding in the 800MHz and 900MHz bands, while interest in the other two bands (1800 and 2100 MHz) was relatively subdued.

Bidding intensity was the highest in the 900MHz band, where the final clearing price is 118% higher than the reserve price. This was followed by 800MHz spectrum in which final price was 53% higher than the reserve price. Bidding activity was consistently muted in the 1800MHz (telcos having acquired spectrum in this band in the previous auction) and 2100MHz (high future visibility considering the Govt plans to auction a further 3 blocks) bands. The clearing prices for these bands rose 17% and 3% over their respective reserve prices

The Following Chart Shows the Reserve Price Vs Winning Price Across all the Circles and Spectrum Bands

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5G / Wi-Fi / Is this the Last Big Spectrum Auction ?

« on: March 25, 2015, 03:24:23 PM »

After this auction, the next spectrum renewals are around 6-7 years away, which is a big relief. There may be some more auctions on 2.1GHz or 700MHz, but given the balance sheets of the existing telcos, the next ones are likely to be more subdued, we think.

If and when the auctions are over, there will be more discussion again on telcos looking to increase prices to recover costs. That is entirely possible, but as seen in recent years, it is not easy to increase prices ? these are not always linear and the volume equation is critical.

Data price increase scenario is also a tricky one, we think. Many telcos are trying to increase data prices across the region, and it does
happen. But it is happening more for those telcos that have decent networks, ie, customers are willing to pay for good quality. The problem for the India telcos could be that for them to increase data prices, networks need to improve first, for which more capex may be
needed, for which more cash is needed, which is a challenge.

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4G / LTE / 800MHz spectrum: Demand now in 17 circles

« on: March 24, 2015, 09:55:10 AM »

With 15.8% increase in 900MHz spectrum price in UP (East) circle, there was demand for 800MHz spectrum in the same circle for the first time in the current auction process. This could possibly be due to incumbent operators looking for back up in 800MHz spectrum if 900MHz prices escalate above their comfort zone. Apart from this, there was some activity in Bihar, Madhya Pradesh and North East circles, where prices jumped 1.0%, 3.0% and 2.0%, respectively. In the 1800MHz band, prices increased in only Himachal Pradesh, UP (East) and UP (West) circles by 1.0%, 6.0% and 1.0%, respectively, leading to an overall rise of 0.4%. There was no excess demand for 800MHz, 1800MHz and 2100MHz spectrums.

Days 15 and 16 had seen spurt in demand for 900MHz spectrum in Rajasthan, UP (East) and UP (West) circles. On day 17, this demand was sustained with 18.0%, 15.8% and 5.0% price hikes, respectively. There was demand for Bihar circle as well, where price increased 10.3%. Overall, on day 17, price for 900MHz spectrum increased 3.9%, taking the total rise over reserve price to 105.6%. Excess demand in this spectrum is now limited to the UP (East) circle. Bharti?s and Idea?s cost of replenishing entire spectrum stands at INR172.7bn and INR305.9bn, 81.4% and 86.1% higher than the reserve prices, respectively. 

We believe sustained increase in prices of 900MHz in crucial circles may lead to more compromises for incumbents such as lesser renewal spectrum and buying for less efficient spectrum. Of the 4 circles that clocked spurt in activity, Rajasthan is a must-win circle for Bharti and UP (West) is must-win for Idea

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Cable / DSL Services / Why Plain Vanilla ISPs Derived No Benefit from Internet Boom ?

« on: March 23, 2015, 04:19:45 PM »

The number of internet users is surging rapidly and users now utilise internet for increasing range of everyday activities from shopping and banking to sharing photos and watching TV. Thus, people are spending a growing proportion of their time and wallet share on the internet. The usage pattern has also altered considerably--internet use now, whether for online gaming or online transactions, requires more bandwidth, boosting bandwidth consumption. However, internet revenues are, for the most part, disconnected from bandwidth consumption. Generators and consumers reaped the benefit of internet boom, but connectivity and network services providers earned almost no revenue from the incremental traffic.

Internet bandwidth consumption and revenue generation highly disconnected

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Cable / DSL Services / Tata Communications Moving Up Chain in Data Services

« on: March 23, 2015, 04:16:34 PM »

Tata Communications, erstwhile VSNL has distinguished itself from the rest of the crowd by moving up the value chain from connectivity provider to technology enabler involves high growth and improvement in margins.

The following Chart Shows where Tata Communications stands in the Stack of Data services Offered Globally

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SmartPhones & Apps / WeChat moment ad vs Baidu search ad

« on: March 23, 2015, 12:44:38 PM »

WeChat moment ad is unlikely to steal Baidu?s search ad market share because the data system in China is fragmented. Search data, e-Commerce purchasing data, and social data are in the hands of Baidu, Alibaba, and Tencent, respectively, and they cannot be shared across. It is hard for WeChat to learn users? purchasing behaviour and search behaviour, thus, it is hard to steal e-Commerce and search ad revenues unless WeChat comes up with more powerful search and e-Commerce functions. However, our speaker believes WeChat?s in-content search may challenge Baidu in the future if the new generation of mobile internet users form the habit to search within WeChat

Online Payments
WeChat is more mainstream than competitors due to its higher user engagement on the platform. Recently, Alipay service account started to gain presence as it offers subsidies to merchants to issue coupons. In addition, many users prefer Alipay because they are more familiar and used to Ali?s online payment system. On the contrary, Baidu Connect has less traffic compared to WeChat and Alipay

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Web 2.0 / Online Video and Advertising in China

« on: March 23, 2015, 12:42:55 PM »

There will be more than 30% growth going into 2017 for online video since there is so much TV advertising budget waiting to be shifted from traditional ad format to digital. Both the big TV channels (CCTV, HunanTV, JiangsuTV, etc) and the online video platforms will squeeze TV advertising market share from the lower-tier city TV channels. Compared to other new digital formats, video ad is similar to understand and the concept is similar to TV ads. Thus, brand names can quickly embrace the format. One of our speakers from the online advertising industry also claimed that players within the online video industry have seen much change recently. Youku+tudou, which primarily  targeting firsttier viewers, may see challenges from Tencent video and iQiyi and new comers like LeTV

Big brands has just begun to do serious marketing to reach more customers as the consumption industry completion intensify.

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SmartPhones & Apps / JustDial's Technology Development Process

« on: March 23, 2015, 11:38:03 AM »

Justdial?s CTO, Sandipan Chattopadhyay, handles a team of nearly 600 people of which ~250 people are core technology people. The development team is structured based on technology skills like Java, PHP, querying, architects etc. In addition, there are ~17
product managers, who manage multiple categories and engage with both the business and the development teams. The company has also attracted outside talent from places like Yahoo for user data management

The team at Justdial works on a classic release every 3 months, while intermediate releases for bug fixes, etc., can happen any time.
The company expects the app to go live by 31st March and expects to commercially launch the Search Plus services in April along with the IPL. In terms of monetisation, except in areas like hotel bookings, air tickets, movie booking, etc., where commercials have been decided, in most other cases the monetization is not an immediate priority.

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4G / LTE / Why Can't Reliance Jio Match China Mobile ?

« on: March 23, 2015, 11:17:15 AM »

China Mobile built a whopping 720,000 4G base stations in 2014, covering all cities/towns and villages on the East Coast. Average of over 10mn 4G subscriber new add per month in 2H14 driven by tariff subsidy and better network coverage. The maturity of 4G smartphone technologies helped to push 4G penetration. China Mobile sold over 100mn 4G smartphones in 2014.

And on the Other Hand Mukesh Ambani led Reliance Jio Infocomm has been talking and talking and I wonder if their coverage has even reached a pathetic 1/10th of what China Mobile has achieved ?

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4G / LTE / Hectic bidding for 800Mhz LTE Spectrum

« on: March 20, 2015, 11:18:48 AM »

?800MHz spectrum saw a price escalation of 5% on the 14th day of auctions. This is higher than the price escalation witnessed on the previous day.
 ?Price increase in the 800MHz band was seen in 6 of the 20 circles where 800MHz spectrum is being auctioned: AP, Assam, Delhi, MP, Maharashtra and North East. 800MHz spectrum costs Rs 51bn/MHz for the 20 circles where such spectrum is auctioned.
 ?Frenetic bidding in the 800MHz band is being seen in circles where 5MHz of contiguous spectrum is available: Assam, MP, Mumbai and North East.
 ?In Delhi, MP and Mumbai, 800MHz spectrum is now priced higher than 900MHz spectrum!
 ?1800MHz spectrum saw price escalation in 2 circles: HP and Kerala.
 ?2100MHz spectrum didn?t witness any price escalation.

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4G / LTE / China Telecom FDD-LTE to Cover 80% by 2015

« on: March 20, 2015, 09:01:32 AM »

China Telecom intends to cover all cities with 4G services in 2015, representing92% by population and 80% by geographical span. CT plans to expand its network to over 320k macro 4G base stations (+200k YoY)and over 140k indoor distribution systems(+80k YoY) by 2015-end,making its claimed 4G network quality comparable with that of China Mobile in urban areas. 4G users ramped to 7m at 2014-end.

The co delivered Feb-2015 mobile net adds of 0.9m, including a0.9m 2G user loss and 1.8m 3G+4G user adds. We believe the extensive deployment of base stations will trigger a clea ruser recovery in 2015. Nearly all subscribers should be 4G by 2016-end.