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UBS Investment Research
India Mobile Sector
Idea gains traction in revenue mkt share
„ Gross revenue grew 4.9% QoQ in 3QFY11 vs. 1.1% in 2QFY11
Based on TRAI's quarterly revenue report, industry gross revenue grew 4.9% in
3QFY11 vs. 1.1% in 2QFY11 given the seasonally strong quarter. Among the
operators, Idea and Uninor gained the highest (+50bps revenue share), followed by
Videocon (+30bps) and Tata Tele (+15bps) while RCom (-85bps), Bharti (-35bps),
BSNL (-25bps), and Aircel (-20bps) lost share during the quarter.
„ Idea gained revenue share across service areas; RCom lost share
Bharti continues to lead the market with revenue share of 31.2%. Its revenue share
increased in metros (+30bps) while it lost rev. share in service areas ‘A’ (-80bps),
‘B’ (-20bps) and ‘C’ (-45bps). Idea and Uninor gained revenue share in all service
areas while RCom’s revenue share declined. Vodafone’s revenue share increased
by 15bps/40bps in service areas ‘A’ and ‘C’ while in other areas its revenue share
remained stable.
„ Reaffirm positive view on Indian mobile sector; Idea is our top-pick
We believe revenue market share, revenue growth and EBITDA margins are the
key metrics to focus and incumbents continue to do well on these parameters. We
believe Indian mobile sector can outperform in 2011 on the back of improving
regulatory climate coupled with better pricing power. We expect regulatory issues
to get resolved in the next 12 months which can then lead to stabilization in prices
(and potentially improvement) as rational regulation stimulates potential
consolidation in the sector. We maintain our Buy ratings on Bharti, Idea and RCom
with SoTP-based price targets of Rs500, Rs105 and Rs195, respectively. Idea is
our top-pick as it offers pure play exposure to the Indian mobile sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
India Mobile Sector
Idea gains traction in revenue mkt share
„ Gross revenue grew 4.9% QoQ in 3QFY11 vs. 1.1% in 2QFY11
Based on TRAI's quarterly revenue report, industry gross revenue grew 4.9% in
3QFY11 vs. 1.1% in 2QFY11 given the seasonally strong quarter. Among the
operators, Idea and Uninor gained the highest (+50bps revenue share), followed by
Videocon (+30bps) and Tata Tele (+15bps) while RCom (-85bps), Bharti (-35bps),
BSNL (-25bps), and Aircel (-20bps) lost share during the quarter.
„ Idea gained revenue share across service areas; RCom lost share
Bharti continues to lead the market with revenue share of 31.2%. Its revenue share
increased in metros (+30bps) while it lost rev. share in service areas ‘A’ (-80bps),
‘B’ (-20bps) and ‘C’ (-45bps). Idea and Uninor gained revenue share in all service
areas while RCom’s revenue share declined. Vodafone’s revenue share increased
by 15bps/40bps in service areas ‘A’ and ‘C’ while in other areas its revenue share
remained stable.
„ Reaffirm positive view on Indian mobile sector; Idea is our top-pick
We believe revenue market share, revenue growth and EBITDA margins are the
key metrics to focus and incumbents continue to do well on these parameters. We
believe Indian mobile sector can outperform in 2011 on the back of improving
regulatory climate coupled with better pricing power. We expect regulatory issues
to get resolved in the next 12 months which can then lead to stabilization in prices
(and potentially improvement) as rational regulation stimulates potential
consolidation in the sector. We maintain our Buy ratings on Bharti, Idea and RCom
with SoTP-based price targets of Rs500, Rs105 and Rs195, respectively. Idea is
our top-pick as it offers pure play exposure to the Indian mobile sector.
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