Reliance Communications is set to benefit from the overall improving sector dynamics, as ARPMs, data volumes rise, competitive intensity reduces and capex under control. There is still a lot of time for spectrum renewal for Rcom, with only 7 circles coming up for renewal in Dec 2015, and others thereafter. Moreover, the excess spectrum charges for Rcom are quite meagre.
The declining trends in ARPMs in the industry have reversed over the last few quarters as all operators have started increasing the tariffs in their promotional packages across various circles in a staggered manner. Rcom too increased its base tariff by 25% to 1.5 paise per second from 1.2 paise per second in Sep-12.
Moreover, strong data volume growth and reduction in competitive intensity will also benefit Rcom. Telewings, Aircel, Sistema, and Tata have reduced coverage, implying a boost to voice traffic growth and a bigger slice of revenue for the bigger players.
Reliance Communications is also in talks with Reliance Jio Infocomm for Passive Infrastructure Sharing Deal on a PAN India basis.