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UBS Investment Research
India Mobile Sector
Bharti’s 3G plans are rational
๔ Bharti launches 3G services in Karnataka; Remaining 12 circles by Mar11
Bharti’s standard 3G plans range from Rs103-750/month and offer 100MB-2GB of
data usage. Bharti has also introduced FlexiShield plan (Rs675) that offers free
data usage of 1.25GB/month. After 1.25GB, the customers will be charged at
Rs0.01/100KB till a cap of Rs2,000. Once the monthly bill exceeds Rs2,000, the
data usage will become free though at a reduced speed of 20kbps. Unlike RCom
and Tata DoCoMo, Bharti does not offer any combo plans (voice & data)
currently. Also, Bharti’s plans seem to be at a premium to RCom & Tata DoCoMo.
๔ 3G pricing environment likely to remain stable
Bharti is the third private operator to start 3G services in India. An initial
assessment of the available 3G plans suggests that these plans are rational and are
not disruptive. Looking ahead, we expect pricing environment in 3G to continue to
remain rational as the number of players per service area are capped and also the
cost of acquiring 3G licenses may act as a barrier for initiating any price war.
๔ Data – The next growth driver
We believe data could be the next growth driver for the sector in the next decade.
India lags its emerging market peers in terms of data usage and we believe this
could change with the launch of 3G services coupled with availability of affordable
3G handsets. We remain positive on the sector outlook for 2011 as we believe that
the improvement in regulatory climate coupled with better pricing will enable the
sector to out-perform. We reiterate our Buy rating on Bharti, Idea and RCom.
Bharti is our top pick and we believe is a good fit for a GEM investor also. While
Idea is pure-play story, RCOM is a contrarian idea for investors with higher risk
appetite.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
India Mobile Sector
Bharti’s 3G plans are rational
๔ Bharti launches 3G services in Karnataka; Remaining 12 circles by Mar11
Bharti’s standard 3G plans range from Rs103-750/month and offer 100MB-2GB of
data usage. Bharti has also introduced FlexiShield plan (Rs675) that offers free
data usage of 1.25GB/month. After 1.25GB, the customers will be charged at
Rs0.01/100KB till a cap of Rs2,000. Once the monthly bill exceeds Rs2,000, the
data usage will become free though at a reduced speed of 20kbps. Unlike RCom
and Tata DoCoMo, Bharti does not offer any combo plans (voice & data)
currently. Also, Bharti’s plans seem to be at a premium to RCom & Tata DoCoMo.
๔ 3G pricing environment likely to remain stable
Bharti is the third private operator to start 3G services in India. An initial
assessment of the available 3G plans suggests that these plans are rational and are
not disruptive. Looking ahead, we expect pricing environment in 3G to continue to
remain rational as the number of players per service area are capped and also the
cost of acquiring 3G licenses may act as a barrier for initiating any price war.
๔ Data – The next growth driver
We believe data could be the next growth driver for the sector in the next decade.
India lags its emerging market peers in terms of data usage and we believe this
could change with the launch of 3G services coupled with availability of affordable
3G handsets. We remain positive on the sector outlook for 2011 as we believe that
the improvement in regulatory climate coupled with better pricing will enable the
sector to out-perform. We reiterate our Buy rating on Bharti, Idea and RCom.
Bharti is our top pick and we believe is a good fit for a GEM investor also. While
Idea is pure-play story, RCOM is a contrarian idea for investors with higher risk
appetite.
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