Visit http://indiaer.blogspot.com/ for complete details India Wireless - Subscriber net-adds may remain weak in the near term
n Industry net-adds dip 6% mom to 17.2m in September. Monthly net-adds of Vodafone/Idea declined ~0.5m each (to 1.5m/1.8m) versus the previous month and accounted for the entire 1.0m mom decline in overall industry net-adds. Net-adds of other leading operators – Bharti (2.0m), RCom (2.0m), TTSL (2.1m), Aircel (1.6m) and BSNL (2.3m) – were largely stable. Total ‘reported’ base of SIM cards reached 682m (58% penetration). However, DoT has estimated ‘active’ sub base of 450m, which implies ~40% ‘human’ penetration.
n Lower net-adds of incumbents not a major concern. Combined monthly net-adds of GSM leaders (Bharti, Vodafone and Idea) in September were 17% lower at 6.2m vs. the 1QFY11 average of 7.4m. We believe this is driven by: (1) lower gross adds – more stringent subscriber verification, scarcity of number resources, optimisation of dealer/trade commissions and promotions; (2) higher churn – curtailment of free/discounted minutes as indicated by Bharti, impact of ongoing subscriber ‘re-verification’ exercise. We believe lower net-adds are unlikely to have a significant impact on traffic/revenue growth, due to lower usage profile of marginal and deal-seeking subs.
n Bharti and Idea’s net-adds broadly tracking our end-FY11 sub forecast. At the latest monthly run rate of net-adds, Bharti’s Mar-11 sub base would be 1.3% below our forecast, while that of Idea would be 1.5% above our forecast; RCom’s end-FY11 sub base would be 2.8% below our forecast.
n Quality of net-adds is the key – Expect GSM leaders to maintain their edge. While all leading telcos (Bharti, Voda, RCom, TTSL) are now adding ~2m net-adds a month, after the past 2-3 month slowdown, the quality of new subs is likely to be better for Bharti/Voda compared with others. This should continue to reflect in KPIs and their trends (ARPU, MOU, traffic).
No comments:
Post a Comment