Why Reliance Jio Infocomm may Takeover / Merge with Reliance Communications ?

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Reliance Jio Infocomm Office65% Anil Ambani owned and Managed Reliance Communications is under Deep Trouble with debt levels continuing to be high (net debt to EBITDA of more than 5x) despite consistent free cash flow generation. The management has not shared any insights on asset monetization in the pipeline to reduce leverage. RCom has signed Tower Sharing and Inter-City Optical Network Sharing Deal with Reliance Jio Infocomm. In this backdrop, we analyze how Reliance Jio Infocomm will eventually takeover Reliance Communications.

In the Recent Past, RCom’s capex is a fraction of

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Mobile Advertising – Apple Devices Command Ad Premium over Android

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The most important and fastest growing segment of Internet advertising is mobile advertising, which makes tracking the underlying key drivers and trends of great importance. Mobile eCPMs increased 68% y/y in 3Q13 and 9% sequentially despite what is typically a seasonal slowdown in Q3 (note that MoPub’s data showed a 10% seq. decline in 3Q12). A key driver of this price increase, in MoPub’s opinion, is the increase in the number of competitive bidders in the auction.

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Samsung Electronics 2020 Target of $400Bn sales – 4G LTE SmartPhone, TV, Display Growth Areas

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Samsung 2020 Target of 400BillionWe attended the Samsung Electronics top management conference call in which they highlighted long-term vision and growth strategies to achieve a 2020E $400bn revenue (from $211bn in 13E) target at the analyst day event. In addition to continuous outgrowth with differentiated profitability in existing core-businesses like smartphone, TV, semiconductor and display panels, management seeks growth opportunities in new business areas like appliances, multimedia services, smart home / enterprise solutions and medical devices through seamless investment in R&D, HR and even open innovation/ acquisitions.

Samsung sees better growth opportunities in

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How Facebook Plans to Monetize Instagram – Mark Zuckeberg’s Plans

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Instagram monetizationFacebook the World’s Largest Web Platform with heavy customer engagement and also the owner of Instagram shared soem insights on how it plans to monetize the exponentially growing platform on Mobile & Web.

Facebook will launch innovative ways of displaying ads on Instagram is a positive largely expected by the market. Further, we believe Zuckebreg’s history of successful product management by balancing user experience with advertiser demand in the roll out of in news feed ads on mobile bodes well for Facebook’s coming efforts in monetizing its Instagram asset. That said, we would not be surprised if the ramp in ad load and as such monetization for Instagram does not quite match that of Facebook’s mobile in feed ad products given Facebook’s broader use case and user base. Nonetheless, in our

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How Big is the market for Online Social Gaming ?

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The Market of Scoial GamingSocial games are online games played through social networks, like Facebook, or on mobile phone applications (Apps). Social games are distinct from other video games and are more suited to casual game experiences. The design of the games encourages players to return frequently through various rewards and multi-player features. Revenue is driven by a small percentage of players paying for virtual currency that can be used for various game advantages such as additional game time or new levels.

What makes social casino games different from other forms of gambling in the eyes of regulators is that players never actually receive a payout for any game played. This critical difference allows social games to fall outside current interactive gaming regulation. Less regulation allows

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SK Telecom Battles KT on 4G-LTE Services for “The Best” in the World

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SK Telecom Battles for KT on 4G-LTE Services SK Telecom The most Advanced LTE Broadband Service Provider in the World Spoke to us and here is an excerpt from the interaction directly with the management of the SK Telecom.

What are your capex spending plans for Broadband LTE?
We have already been investing in the 1.8GHz bandwidth since 2012. So we will try to meet our annual capex guidance announced at the beginning of the year. However, since we have acquired this very competitive bandwidth, there may be
some need to pre-emptively invest in this bandwidth.

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Badiu’s Mobile Monetization Strategy Begins to Pay Off – Challenges Remain

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Baidu Mobile MonetizationChinese Internet Giant, Baidu is ramping up mobile monetization through mobile paid search, contextual ads, and mobile VAS (mostly games).

Baidu Mobile traffic + landing page optimization drive ads adoptions
Baidu’s mobile search volumes account for ~1/3 of Baidu’s organic search traffic, or 500 mn mobile search queries per day. Increasing mobile traffic would incentivize Baidu’s search customers to allocate more of their ads budgets to mobile vs. PC.

However, a key challenge for PC-based websites is to display web content on mobile devices, with the lack of mobile landing pages resulting in a suboptimal user experience, fewer mobile browsing activities, and fewer page views. Thus, online advertisers have

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New Telecom Policy – M&A in India to be Liberal ?

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M&A in Indian Telecom SpaceAs per the reported proposed norms, the merged entity would be allowed to have market share (in terms of subscriber base & adjusted gross revenues [AGR]) of up to 50% in a particular circle (up from current guidelines of 35%). The new entity could own up to 25% of the total spectrum allocated in a particular telecom circle and up to 50% of spectrum allocated in a specific band (and 10 MHz in 800 MHz band).

According to the report, the DoT also proposes to allow the merged entity to own two blocks of 3G and/or BWA spectrum (vs one currently) in a specific circle. However, the acquiring company would need to pay market-determined price (to the govt) for GSM

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OTT Apps Lead to Massive Decline in SMS Usage

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number of smsOver-the-Top (OTT) services are web-based (potentially cheaper) ways of communicating that bypass traditional voice & SMS services. TRAI data shows that SMS has already started to feel the impact from online messaging apps such as WhatsApp, and SMS’ contribution to industry rev has already declined (3%; Jun13). The expected further reduction, however, should be more than offset by data pickup (~10% of rev for Bharti/Idea), while voice revenue should remain relatively immune.

TRAI data highlights that SMS as % of rev (GSM)

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Will DoT’s M&A Rules Scripted to Favor Reliance Jio Infocomm & Reliance Communications ?

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Reliance Jio Merger Reliance CommunicationsDespite the Massive $20 Bn Dollar Corruption Scam in the Ministry of Communication and the Department of Telecom, things haven’t changed much as the same old dirty law makers and bureaucrats occupy the seats of power. This time around they are framing the rules for Mergers & Acquisitions in the Telecom Space which are likely to be influenced by India’s Richest Billionaire and Insider Trader, Mukesh Ambani.

Insiders from the DoT has sent feelers that the M&A Policies will be scripted to favor the smooth amalgamation of Reliance Jio Infocomm and Reliance Communications. We expect Reliance Jio to use the spectrum sharing rules

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