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Messages - wiredlife

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1
Over the last seven years, the mix of smartphone shipments in India has been moving towards larger screen sizes. The average cycle for any screen size typically lasts for 3-4 years, after which shipments fall to almost negligible levels as users move on to the next bigger screen size. We have seen this phenomenon play out in China, and India seems to be lagging China by 12 months with shipments of >5" screen size constituting 67% of total smartphone shipments in 2016.

While several factors would have caused this massive mix shift, it highlights the significant increase in the usability of smartphones to carry out commerce activities among others. During this period, screen sizes increased from 4" and below to around 5" to 6". In India, smartphone screen sizes are now predominantly between 4.5" and 6".

2
SmartPhones & Apps / Why Google Launched YouTube TV ?
« on: April 24, 2017, 03:32:32 PM »
Google announced YouTube TV in early March and launched the service in early April. The decision to pursue linear television
could give the company a leg-up in the increasingly competitive online streaming arena (Facebook with Live and video tab, Twitter with live video / Periscope, Amazon with Prime / NFL)

At $35/mo, YouTube is priced reasonably well versus AT&T DirecTV Now ($35-60), PS Vue ($40-75), and Sling TV ($20-40). The channel offering is compelling (includes CBS), but not without absences (no Viacom, Time Warner). The feature set appears competitive, with an unlimited 9-month DVR, simulcast capabilities x3, regional sports access and YouTube Red Originals access.

YouTube's brand, viewership and capital position the platform for streaming leadership, and we could see YouTube TV potentially positioning YouTube as a primary video hub for both Internet and linear TV longer term.

3
Web 2.0 / Google's Big Bet on Machine Learning / AI in Cloud
« on: April 24, 2017, 03:27:09 PM »
Google Cloud Head Dianne Greene highlighted a recent shift in customer behavior from exploring various cloud features (like BigQuery) to initiating full lift-and-shift migrations. Consistent with recent commentary, Ms. Greene highlighted data analytics and machine learning, reliability, and customer support / service as points of differentiation, as well as security, cost, and performance.

Fei-Fei Li (Chief Scientist, Cloud AI & Machine Learning) had a particularly compelling presentation focused on the democratization of AI, considering the scope and magnitude of bringing AI capabilities to the 1bn+ daily users of Google. Ms. Li announced general availability of Cloud Machine Learning Engine (previously beta) as well as Video Intelligence API, an API enabling machine learning analytics on video content libraries. The company also announced the acquisition of Kaggle, a platform for data science and machine learning competitions with a community of 800+ thousand data scientists.

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Web 2.0 / Google Cloud gaining steam with SnapChat on Board
« on: April 24, 2017, 03:13:55 PM »
While management is unlikely to break out specific Google Cloud metrics, we expect any commentary on Cloud to suggest robust demand.

The size and enthusiasm around the Google Cloud Next conference (alongside a multitude of new product feature announcements) speaks to the ramping traction of the segment, and the disclosure of Snapchat as a 5-year $2bn customer adds further credibility to the Google Cloud Platform as a viable provider in the segment. Key points of differentiation for Google Cloud include speed of the GCP fiber network, AI capabilities, and collaborative tools with G Suite. We assume $1bn+ Cloud growth in 2017 to $3.1bn (limited profit contributions), and think the segment can achieve $10bn+ by the end of the decade.

Customer testimonials were impressive, with representatives from Disney, SAP, Colgate Palmolive, Verizon, Home Depot, HSBC, and eBay. SAP announced general availability of its GCP certified SAP HANA in-memory data and analytics platform, as well as HANA Express (developer edition). SAP also indicated plans to run SAP Cloud Platform on GCP.

Verizon announced plans to migrate 150k+ workers to G Suite beginning in a few weeks. Home Depot highlighted strong GCP performance during Black Friday spike demand, and HSBC is leveraging GCP for its data analytics capabilities. eBay had an impressive
presentation focused on ease of migration to GCP (5 month process) capped with a cold demo of Google Home integration with eBay via GCP.

5
4G / LTE / Is Jio's Network Capacity Unbetable by Airtel / Vodafone ?
« on: April 11, 2017, 11:26:52 AM »
Jio believes the incumbents are materially behind and will take at least 3-4 years to reach where Jio is, today. Jio would have moved a few years further ahead on network capacity/quality aspects, by then. Essentially, Jio is suggesting a sustainable competitive moat on network capacity unless a competitor spends big in a short time to make up for lost time.

Analysts argue that Jio will continue to be ultra-disruptive and keep deploying huge incremental capital to achieve market supremacy; he/she believes Jio can potentially get an EV/GCI of as much as 2X on incremental capital deployed from here on.

6
Mr Nilanjan Roy, Global CFO of Bharti Airtel at Credit Suisse's Asian Investment Conference said that Airtel can deliver revenue CAGR of 8-9% on the back of higher penetration and opportunities in home and SME broadband markets.

In addition, the home broadband market is as yet untapped, with an opportunity in at least 50 mn affluent homes. Furthermore, the SME
market is expected to open up to broadband/connectivity consumption over the years.

[WE think that Airtel has failed to embrace this section of the market despite repeated personal requests to Sunil Bharti Mittal and they are opening their eyes just before Jio will launch massive Fiber Network to the Home Broadband Services]

On Jio's tariff aggression, management indicated that Bharti has responded with matching offers around Rs149/Rs349 price points, which are seeing a good response from customers.

7
In the aftermath of Jio Launch,  struggle of smaller operators has increased manifold, as one would have anticipated. Per unauthenticated media reports, one of the challengers has delayed interconnect payouts to other operators (our channel checks confirm this) and another has requested the department of telecommunications (DOT) for extending the due date of deferred spectrum obligation installment.

Jio impact is accelerating the inevitable consolidation in the industry in a way.

8
Web 2.0 / Zomato - Food delivery an important revenue stream
« on: April 07, 2017, 11:14:40 AM »
Food delivery is becoming an important revenue stream for Zomato, and at US$9 mn contributed ~18% to its total FY2017 revenues. Based on disclosed revenues and commission rates (~8.5%), we reckon that Zomato fulfilled ~16 mn food delivery orders in FY2017. Unit economics disclosed by Zomato a few months back lead us to believe that Zomato would have generated net margins (after accounting for direct data, customer support and payment gateway costs) of US$4 mn. ~90% of orders are now fulfilled by the restaurant directly, which has supported Zomato’s food delivery unit economics.

After scaling up the food delivery business, Zomato is looking to scale up its other product offerings such as: (1) table reservations, launched in July 2016 in India and UAE with 24,000 restaurants in its fold, (2) Zomato Gold, launched in Lisbon and Dubai in March 2017, a subscription based service providing restaurant-funded add-ons, (3) Zomato base, to be launched in FY2018, a restaurant Point of Sale product to be introduced in India and UAE.

9
4G / LTE / Jio Sets Aggressive Growth Projections
« on: April 04, 2017, 12:39:16 PM »
Jio has set a revenue target of Rs1,500bn by 2022. This implies 50% revenue market share (RMS), not a modest assumption, since other companies seem set to match Jio on location count and spectrum, and if not immediately, within 12-18 months, they should draw level on capacity.

If JIO manages to sell its entire capacity at Rs50/GB, it would reach revenue of Rs900bn. Therefore, it would need revenue of Rs600bn from other sources such as content to reach revenue of Rs1500bn. To put this in perspective, TV subscription revenue in India is Rs360bn and after assuming 15% Cagr, it can reach Rs725bn by FY22. Hence, Jio's target of Rs1,500bn looks aggressive.

At the analyst meeting, Mr. Manoj Modi, mentioned that JIO's data service has seen strong uptake among the economically lower
segments where there are limited entertainment alternatives. This raises the risk that once the services become paid, there could be a
fall in traffic as usage during the free period does not match the ability to pay.

10
4G / LTE / Did Jio Money Cashback Help Jio achieve 50 Mn Paid Users ?
« on: March 30, 2017, 10:14:35 AM »
Jio announced a "cashback" plan, providing a Rs50 discount voucher, usable only for a recharge of the Rs303 Jio Prime plan (which offers
1GB/day data and unlimited voice calling – and in the initial phase, 5GB additional data). Jio suggest this is a "limited period" offer and is valid on all recharges over Rs99. This "cashback" is credited to the Jio Money wallet, and can be used upto five times and is valid until 30 June 2017.

Mobile wallets such as PayTM and Mobikwik over the past week have announced special offers for Jio recharges as well. These wallets offer Rs20-30 cashbacks on Jio along with (up to) Rs150 discounts on purchase of specific services, such as movie and bus tickets. We
believe this offer from Jio is different as it is: (1) offered by the telecom operator itself, and (2) is valid exclusively for Jio plan recharge. In effect this cashback takes Jio tariffs down to Rs253 – at least until Jun-17, for all payments via JioMoney. This offer also encourages consumers to use the JioMoney wallet.

On the 24th of March, 20 Mn Subscribers had already opted for Jio Prime Membership. Jio is likely to get around 50 Mn Jio Prime Subscribers by end of Tomorrow 31st March, when the offer expires.

11
4G / LTE / Airtel has Highest 4G LTE Spectrum with Tikona Purchase
« on: March 26, 2017, 09:07:00 PM »
Airtel has acquired TD LTE Spectrum from number of operators in the last few years,

Airtel Acquired Spectrum from Qualcomm in Delhi, Mumbai, Kerala and Haryana Circles - http://3g4g.in/2013/10/18/airtel-acquires-42-45-more-stake-from-qualcomms-4g-lte-venture-in-india-at-58-discount/

Airtel Acquired Spectrum from Augere which had TD-LTE Spectrum in Madhya Pradesh Circle

Later Airtel Acquired Aircel's 4G Waves in Andhra Pradesh, West Bengal, North East, Himachal Pradesh, Bihar Orissa, Assam

Now Airtel has acquired the last byte of Spectrum from Tikona - which has a 20 MHz block of (unpaired) TDD spectrum in Gujarat, Rajasthan, UP-East, UP-West and HP. With this acquisition, Bharti has filled its 2300 gaps in UPE, UPW and Rajasthan circles. Further, in Gujarat and HP circles, Bharti has augmented its existing 10 MHz TDD block with additional 20 MHz from Tikona. It now has a 30 MHz
TDD block in 13 of the 22 circles.

Total consideration for TDN's 4G spectrum + 350 network sites (MRO sites) is around Rs16.5bn, including Rs9bn of debt to be assumed by Bharti. Post completion of this deal, Airtel will have aggregate pan-India spectrum of 1505 MHz across all bands.


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4G / LTE / Why Airtel / Vodafone Not matching Jio Prime Plans ?
« on: March 24, 2017, 12:49:35 PM »
Airtel the Congress Party, Vodafone the Janta / Samajwadi and Idea the Communist Party of Indian Telecom Sector have resorted to cahoot loot of Indian consumers for deacdes, haven't yet rolled out comparable packages to that of Jio Prime to their consumers.

For now, discerning consumers who threaten to churn out are offered attractive retention benefits; additional 10-30GB of data per month along with unlimited calling for Rs345. Our channel checks indicate that A-Vo-Id Lobby is unwilling to publicise such offers given downtrading as well as network capacity constraints.

We expect further ARPU dilution even after Jio starts charging as we expect significant downtrading of incumbents' high ARPU consumers. Recharge choice of Jio's consumers will be key to gauge data consumption habits; if more consumers opt for Rs303, telcos' revenue could improve as this implies sticky consumption habits. That said, initially we expect Jio to further eat into incumbents’ revenues, resulting in persistent revenue weakness for the telecom sector.

13
Airtel, Idea and Vodafone India have significantly & aggressively rolled out broadband (3G/4G) network sites over the past 4 quarters.

Airtel & Idea have increased the proportion of 3G/4G sites in its overall base, from 42% in 3QFY16 to 46% in 3QFY17 indicating the ramp up of investments in 3G/4G. Airtel and Idea have increased their mobile broadband sites (3G/4G) by 49%/112% Y/Y respectively in 3QFY17 – more importantly, count of 3G/4G sites has gone up 101,851 over the past 4 quarters (2QFY16 – 2QFY17) for Airtel & Idea.

Bharti Infratel added 13,013 tenancies in the past 4 quarters 3QFY16 – 3QFY17) – barely 13% of the total sites added by Airtel & Idea (probably suggesting that 3G/4G sites roll-out is substantially happening via loading).

14
In India, Reliance unveiled Mobile Broadband Revolution with the Launch of Jio 4G. Jio users and non-users have similar view on what is important when selecting a mobile operator– with network data speed ranking as the most important overall. This is followed by value for money and network data coverage. Where they differ is in 'network voice coverage' – Jio users seeing this as less important than non Jio users.

What is most striking about this is how far Jio is has come in such a short period of time. We expected Jio to outperform the others in 'value for money' and 'minutes/data in my plan' – it's hard to compete with an operator that is giving away up to 1GB/day for free. We also expected a strong showing for 'data speed'. What we didn't expect was the high scores for customer service, convenience, voice coverage and quality, data coverage and handset choice. In fact Jio leads the market in six of the ten attributes – including the top three!

15
3G / HSPA / RCom Unlimited 3G - JOY OF HOLI Offer
« on: March 10, 2017, 02:03:03 PM »
RCOM has announced exciting variants of the plan for its 3G and 2G customers - introducing a competitive 3G offer of unlimited data access at Rs 99 wherever Reliance 3G is Present, while unlimited 2G data access will be available for Rs 49.

Following Chart Shows the Reliance Communications JOY OF HOLI Offer

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