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Telecom: Bharti Airtel (BRTI.BO, Buy, on Conviction List)
• Declining regulatory estimate the risks: We incremental news flow related to cancellation of licenses/imposition of fines will be negative for
new entrants and believe the regulatory environment in the next 12-18 months will be more favorable to incumbents. Given the recent changes
at the telecom ministry, we also now see low risks to the 900 MHz refarming going through in the next 12 months
• Further improvement in competitive dynamics: We believe going forward competitive intensity will further improve and the incumbent
operators will gain incremental revenue market share as 1) their tariffs are almost similar to those of new operators but they have better
coverage; and 2) new operators will further struggle to raise funds/refinance debt and risk losing focus on strategy in the near term (given the
overhang of possible license cancellation)
Bharti Airtel
> We believe the regulatory environment in the next 12-18 months could be more favorable to incumbents
> Incumbent operators to gain incremental revenue market share going forward given similar tariffs
Revenue and subs market share: Incumbents more focused on revenue mkt share than new entrants
with network coverage better than new entrants
> 12-mo TP is based on SOTP
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Telecom: Bharti Airtel (BRTI.BO, Buy, on Conviction List)
• Declining regulatory estimate the risks: We incremental news flow related to cancellation of licenses/imposition of fines will be negative for
new entrants and believe the regulatory environment in the next 12-18 months will be more favorable to incumbents. Given the recent changes
at the telecom ministry, we also now see low risks to the 900 MHz refarming going through in the next 12 months
• Further improvement in competitive dynamics: We believe going forward competitive intensity will further improve and the incumbent
operators will gain incremental revenue market share as 1) their tariffs are almost similar to those of new operators but they have better
coverage; and 2) new operators will further struggle to raise funds/refinance debt and risk losing focus on strategy in the near term (given the
overhang of possible license cancellation)
Bharti Airtel
> We believe the regulatory environment in the next 12-18 months could be more favorable to incumbents
> Incumbent operators to gain incremental revenue market share going forward given similar tariffs
Revenue and subs market share: Incumbents more focused on revenue mkt share than new entrants
with network coverage better than new entrants
> 12-mo TP is based on SOTP
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