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| Sunday, August 30, 2009 |
| S Tel's Tenancy with Reliance Infra - Positive for RCom |
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RCOM announced an infrastructure sharing agreement with S Tel that includes sharing of Telecom Infrastructure (TI), transmission BTS and fiber backbone. S Tel is one of new operators in India with licenses in 6 C circles - Orissa, Bihar, HP, Northeast, Assam and J&K. S Tel plans to launch wireless services before end 09. The deal gives S Tel
access to 10,000 towers of Reliance Infratel in these circles.
Coming on the back of a deal with Swan-Etisalat, this agreement will be strategic positive for RCOM, in our view, as tenancy of Reliance Infratel (Tower arm of RCOM) increases with third party tenants. Further, it will alleviate the broadly held concern over lack of third party tenants for Reliance Infratel and should lead to more deals over the next few months, in our view.
We expect the deal to ramp-up over the next 6-12 months and reach steady run-rate after 12 months. Given limited incremental investments, typical margins on such deals are quite high - 65%+ at EBITDA level in our view. |
Published on Sunday, August 30, 2009 at 5:41 PM  |
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| Friday, August 28, 2009 |
| Only 4 3G Licenses for Auction - Reserve Price Higher |
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The Empowered Group of Ministers (EGoM) constituted by the government to deliberate on the issue of on third generation (3G) spectrum auction has decided the minimum price for the for pan-India 3G license at Rs 3,500 crore. The panel also decided to allow only four operators [plus BSNL / MTNL backdoor entry]to offer the high-speed mobile services in the first phase.
What it means is that only four new players will be given spectrum in each circle as one slot is already pre-empted by the BSNL/MTNL. The government expects that the auction would yield revenue of Rs 25,000 crore. Telecom minister A Raja, who was also present at the meeting, said that the government would complete the auction of 3G spectrum within three months and expected to raise Rs 25,000 crore.
The panel, headed by finance minister Pranab Mukherjee, was constituted after the Department of Telecommunications (DoT) and finance ministry failed reach a common price for auction of the scarce resource. The EGoM will have three options available before it, Rs 1,010 crore suggested by the telecom regulator TRAI, Rs 2,020 crore advocated by the DoT and Rs 4,040 crore proposed by the finance ministry itself. While the DoT wanted lower price to ensure rapid spread of 3G services, the finance ministry wanted higher price to ensure maximum revenue. The final price decided by the panel seems to be a compromise between the two positions.
The EGoM has also fixed the reserve price of Rs 1,750 crore for the WiMax services. The reason for allowing only five players is probably that government wants to ensure that total supply of spectrum remains somewhat lower than demand. Since only 6-7 serious players are likely to bid, the government has decided to restrict players to five to ensure that it gets maximum prices per unit of spectrum. |
| Published on Friday, August 28, 2009 at 10:06 AM |
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| Tuesday, August 18, 2009 |
| Airtel and not BSNL Leader in Rural India |
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We have obtained statistics from all the Wireless Telecom companies operating in India. It comes to us a surprise that Bharti Airtel controls a whopping 26.9% of Rural mobile market with 29.5 mn subscribers. Overall their are 109.71 mn rural mobile subscribers at the end of March-09.
The following Spreadsheet has the data compiled for the Pie-Chart shown above. |
| Published on Tuesday, August 18, 2009 at 1:36 PM |
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| Wednesday, August 05, 2009 |
| Tata DoCoMo GSM services in Mumbai |
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Tata Teleservices Maharashtra (TTML), the listed entity of the Tata Group engaged in offering CDMA-based mobile services in Mumbai and the rest of Maharashtra including Goa, is set to roll out its GSM-based mobile services in Mumbai on Thursday, according to a media report.
TTML will launch the services under the Tata DoCoMo brand in the crowded Mumbai circle, becoming the tenth GSM operate in the metro. Among the existing operators, Vodafone Essar is the market leader and has 4.6 million users, followed by Reliance Communications, which offers both CDMA and GSM services. TTML has so far been only a CDMA provider and has 2.5 million users in Mumbai, the report added.
TTML has drawn up an Rs 1,000-crore capital expenditure plan for the GSM foray in Mumbai Maharashtra services and is expected to offer the services at one paise per second, giving an initial push to its services. The GSM services will have an added advantage, thanks to the company’s CDMA infrastructure in the region.
The Tata Group has already begun GSM services in Chennai, Tamil Nadu, Karnataka and Andhra Pradesh through Tata Teleservices, the group’s unlisted telecom entity, which provides CDMA services in 20 circles.
While GSM services would be launched in Mumbai on August 6, the services in the rest of Maharashtra and Goa would kick off by the end of the month, the report said. |
| Published on Wednesday, August 05, 2009 at 12:58 PM |
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