Visit http://indiaer.blogspot.com/ for complete details �� ��
Telenor Q3 results: takeaways for India
�� Readthrough from Telenor’s Q310 results
Uninor’s Q310 revenue grew 111% QoQ to Rs1.6bn led by an 8% QoQ
improvement in implied ARPU from Rs85 to Rs91 and an increase in the
subscriber base from 3.9m in Q2 to 7.9m (Uninor guidance was 7m). We estimate
mins on network grew 138% QoQ to 4.5bn mins, while blended rev/min declined
from Rs0.41 to Rs0.36. EBITDA loss increased marginally to Rs8.4bn (+1%
QoQ). Telenor management has revised its guidance on 2010 EBITDA loss from
NOK4.5-5.0bn (Rs34-38bn) to NOK4.5bn (Rs38bn) and lowered 2010 capex
guidance from NOK2.0-2.5bn (Rs15-19bn) to NOK1.5-2.0bn (Rs11-15bn) as it is
delaying capex to later years.
�� UBS view: Consolidation inevitable, but unlikely in the next 4-6 quarters
We continue to believe that new operators are likely to face significant challenges
in India as they have poor quality (1800 MHz band) and insufficient spectrum (2x
4.4 MHz), which limits their coverage and capacity per base station. While we
believe consolidation is inevitable, we think it is unlikely to happen in the near
term (the next 4-6 quarters) as: 1) regulation needs to be revised to facilitate M&A
with large operators; and 2) we believe some operators need to see pain in terms of
significant EBITDA losses for a few quarters, before they become willing to sell
out.
We maintain our Buy rating on RCom and Bharti, and Sell rating on Idea. Our
sum-of-the-parts-based price targets for RCom, Bharti, and Idea are Rs270, Rs415,
and Rs75 respectively. RCom is our top pick as we expect positive datapoints to
emerge from RCom in terms of revenue market share and news flow regarding the
stake sale in Reliance Infratel.
Key takeaways from Telenor results webcast
�� Telenor management is happy with the performance of Uninor in Q310 as
subscriber growth has been strong (Uninor was second largest in terms of
incremental market share in August and September 2010) without diluting
ARPU. In fact, ARPU grew 8% QoQ in rupee terms.
�� Telenor management has revised its guidance on 2010 EBITDA loss from
NOK4.5-5.0bn (Rs34-38bn) to NOK4.5bn (Rs38bn) and lowered 2010 capex
guidance from NOK2.0-2.5bn (Rs15-19bn) to NOK1.5-2.0bn (Rs11-15bn) as
it is delaying capex to later years.
�� Telenor management said that its expansion plans in India will primarily
focus on specific service areas only and not pan India.
�� The company has appointed Yogesh Malik, who heads technology and
sourcing at Telenor, as the Chief Operating Officer of Uninor. Management
expects this change to bring efficiencies in capex likely to be incurred to
expand in new service areas.
No comments:
Post a Comment