Telecommunications & Technology
OpenTable shows inventory at the end of February is tracking up 1% q/q in North America (vs. our 3% q/q est.) and International inventory is flat q/q (vs. our 4% q/q est.). Separately, The National Restaurant Association’s Restaurant (NRA) Performance Index increased to 100.6 in January from 99.7 in December. Aggregate vacation rental listings on … Read more
At the end of February, Priceline’s Booking.com had roughly 277.4K hotels on its site, and, at the 3 month avg. run-rate of 8K net new hotels per month, Booking.com appears on track to exceed our estimate for 281K hotels by the end of 1Q. Of the three key quarterly metrics (hotels, rooms per hotel and … Read more
Facebook presented a revamped News Feed at a press event today, offering several upgrades: 1) Richer, more visually engaging stories; 2) Content-specific feeds; 3) Platform-consistent experiences. Advertisers may benefit as more screen real estate will become available for News Feed, allowing in-stream ads to become larger and more engaging, similar to high-CPM “takeover” ads on other websites.
Making feeds more consistent and content-specific should improve the News Feed
Since the expiry date for licenses in several circles will come up in Nov-14, the government will have to take the decision for auction of renewal spectrum prior to that. The following Chart Shows License / Spectrum Expiry Dates for Incumbents – Airtel, Reliance GSM, Vodafone, and Idea Cellular in the next 3 years 900MHz … Read more
In India, the government has allocated 2100 MHz and 2300 MHz spectrum bands for 3G and BWA (4G) services, respectively. These are relatively inferior frequencies and require more tower sites/tenancies to provide coverage in a specific area compared to 900 or 1800 MHz spectrum. According to the new telecom policy, the telecom operators can deploy … Read more
After shutting operations in 10 circles, last month, MTS Sistema Shyam Tele Services Ltd bid for 8 circles in the Auction. The spectrum won by SSTL in eight circles is technology neutral and valid for 20 years. The company would be required to pay INR 36.4bn for the license period. The 800MHz auction conducted on … Read more
The Indian telecom industry is fragmented, and so is the tower industry, with most companies having preferred tower partners. The top three Indian operators have formed a JV to form Indus. However, Reliance Infratel, MTNL/BSNL, Tata, Aircel, among others, have their preferred companies, which will take a bulk of their tenancy. Therefore, Bharti Infratel / Indus Towers tenancy will have high dependence on the top three operators.
Factors that positively impact the future tenancy potential are 3G network Expansion, 2G tenancy for new entrants who make in-roads into rural areas and 900MHz Spectrum.
3G Network In most circles, operators holding
Telecom tower is a capex-intensive business. While the tower structure and shelter have a long life of up to 40 years, there are parts such as batteries, generators and air conditioners that are the responsibility of a tower company and have a shorter life. Telecom tower companies’ capex can be divided into new tower capex, tower capacity expansion capex, renewable energy initiatives capex and maintenance capex. For example, Bharti Infratel management has guided to maintenance capex of INR 100,000/tower per year. Main parts that need regular replacement are batteries (cost INR80,000-100,000 each) and diesel generators (INR150,000 each).
Indian tower companies spend on batteries and generators,
Telecom companies’ power cost has three components – grid power, batteries and diesel. Grid power is the cheapest source of power and is the main source in most urban sites. Telecom sites need upwards of 99% uptime, but round-the-clock grid power is not available for most towers. When grid power is not available, the cell site shifts to battery backup. In rural India, most sites either do not have grid connectivity or have grid power availability for a very short period, and grid and battery are not sufficient to provide the high uptime levels required for a cell site. Therefore, most of these sites run on diesel generators
Power and fuel cost is the single-largest cost head for a telecom operator (8-10% of revenue for the most efficient operators). Reading into the Balance sheet of Pure telecom Infratel Player,
Let us look into the Telecom Tower Requirement of Top 4 Operators – Airtel, Vodafone, Reliance Communications and Idea Cellular.
Bharti Airtel Airtel is already present on Bharti Infratel [BHIN] sites; will contribute to incremental tenancy of Indus Towers. Airtel is a tenant on almost all of Bharti Infratel’s towers. Airtel will contribute to Bharti Infratel’s incremental tower growth but not to its incremental tenancy. However, Airtel will be the key driver of 3G and 4G loading revenue, being the single-largest operator on Bharti Infratel’s towers. This benefit will be back-ended, as Bharti Infratel’s towers are in B and C circles, which shall see delayed 3G/4G investments, as they are predominantly rural
Vodafone India Vodafone is only on the 1,800MHz band, necessitating