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| Monday, October 26, 2009 |
| Idea Cellular - ARPU - MoU Down in Q2 |
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 Per Second Calling Tariff Plans by DoCoMo and Aircel has dent into the bottom line of most Telcos. Idea Cellular the flip flop story in Indian GSM Wireless Space reported earnings for Sept quarter.
- ARPU down QoQ from 232 to 209
- MOU down from 399 to 375
The management has said,
MOU drop was driven by: (1) increased multi-SIM ownership due to competition - company estimates ~20% of all India subs are using multiple SIM cards, with proportion being higher in urban areas; (2) seasonal factors (less roaming); and (3) impact of delayed monsoons on rural demand. We expect the revenue 'chill' to continue in 2H as well, with ARPM erosion likely to be an equally dominant factor (if not more), compared with MOU pressure. Revenue in existing 11 circles (excl. 5 new circles) was actually down 1.3% qoq. EBITDA loss in new circles (Rs830m) was higher than Analysts Rs694m estimate. |
Published on Monday, October 26, 2009 at 11:13 AM  |
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| Saturday, October 17, 2009 |
| TRAI Paper on - M&A + Licensing + Spectrum |
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TRAI has released a paper seeking industry's views on the following issues,
- Licensing issues - Uniform license fee, extending license period to perpetuity, delinking license from spectrum, cap on number of operators per circle, cap on spectrum held by an operator
- Mergers & Acquisition - need to ease existing norms including spectrum caps, spectrum transfer charge in M&A
- Spectrum - methodology of spectrum allocation (auctions vs. subscriber linked), one time fee on excess spectrum, spectrum trading/sharing, LT spectrum availability/management issues.
You can send your comments by 12th Nov to TRAI. |
| Published on Saturday, October 17, 2009 at 6:30 AM |
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| Wednesday, October 07, 2009 |
| Tariff War - Disruption first + consolidation later |
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RCom's move of introducing the simplest All India Voice tariff was no surprise to us. This rapid rebasing in pricing by an incumbent (as announced on Monday) will seriously affect and threaten smaller, regional and startup operators, perhaps shortening the period before which industry consolidation inevitably takes place.
Price cuts and promotions are not new in Indian wireless - what is new is
that one of the three wireless incumbents has done it: This marks a major shift in industry dynamic and is fundamentally different from a smaller, unprofitable player resorting to price cuts (which we had anticipated earlier).
The response from incumbents may be focused on on-net calls to prevent the existing subscriber base to move away to the competition. New tariff announcements would disrupt industry pricing discipline, reducing ARPM estimates.
MoU elasticity: unlikely to play out in near term, due to supply- and demand-side constrain. Despite sharp cuts in tariffs that are likely to be announced by key sector players over the course of next week, we see little possibility of MoU elasticity in the market.
This rapid rebasing in pricing by an incumbent will seriously affect and threaten smaller, regional and startup operators, perhaps shortening the period before which industry consolidation inevitably takes place. |
| Published on Wednesday, October 07, 2009 at 12:53 PM |
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