Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Telecoms Sector-----------------------------------------------------------------------------------------
So what does 3G really mean in India?
● With all four 3G spectrum holders in Mumbai having launched
their services, we decided to conduct field trials to understand the
quality of various services, as well as the tariffs on offer.
● Data download speeds have improved significantly over the
GPRS speeds seen earlier, but are still a far cry from the
promised high speeds that we are awaiting from 3G. Further,
tariffs are not lower than comparative wireline tariffs and hence
could be a deterrant to mass uptake.
● Video calls are available on MTNL, Bharti, RCOM networks – and
are of acceptable quality. Mobile TV services are available with
Bharti, RCOM and Vodafone, and are of exceptionally good
quality with around 30-50 channels being offered by each
operator. However, on both video calls and mobile TV, we believe
tariffs are prohibitively high for these to gain mass acceptance.
● We see little upside to our estimate of 3G contribution to mobile
EBITDA staying below 5% three years after launch. However, we
remain positive on overall fundamentals and retain OP on Bharti
and Idea.
With Airtel and Vodafone launching their 3G networks in Mumbai this
week, all four 3G spectrum holders in this circle have launched their
services. We decided to conduct some field trials to check the tariffs
and quality of the new services. All trials were done at the same
location (our office located at Worli in South Mumbai) and using the
same handset.
Data speeds not very exciting yet
We calculated the average download speeds based on time taken to
download the CS 2009 annual report (a 7 MB pdf file) from our
corporate website – averaged over three trials for each operator. We
could get download speeds in the range of 24-140 kbps. We note that
both Airtel and Vodafone launched only this week, and Vodafone’s 3G
offering is currently free to use as a promotional offer. Hence, we
would not read too much into the differences between the speeds of
various operators, and only look at these numbers as the range of
speeds currently available on Indian 3G networks.
Though these speeds are higher than the GPRS download speeds
that were available before 3G launch (less than 10 kbps), it is a far cry
from the promised speeds of 0.5-3 Mbps.
Compared to prevalent wireline broadband tariffs of Rs1 per MB
download, the 3G data plans are not cheap.
Video calls – acceptable quality
Video calls worked on three networks – Bharti, RCOM and MTNL. The
quality of calls was of acceptable level with reasonably smooth videos.
However, the tariffs are prohibitively high, (Rs0.01-0.05 per sec), and
this service could remain just an amusement tool at current pricing.
Mobile TV – excellent quality
Mobile TV application is supported by Bharti, RCOM and Vodafone.
The quality is as good as viewing videos stored in phone memory.
Across operators, around 30-50 channels are offered currently
(various genres like news and entertainment). We found a 10-12
second lag between regular satellite TV images and the mobile TV
streams. However, even here we believe that the pricing is currently
too high for this to become a popular service.
Keeping our estimates on 3G low
At current price points, we believe that 3G services will fail to generate
mass market demands, and hence expect the uptake to remain slow.
In our models, 3G services contribute less than 5% of mobile EBITDA
even three years after launch. However, we believe that the overall
business fundamentals remain strong for GSM incumbents like Bharti
and Idea. Barring near-term share price volatility due to regulatory
uncertainty, we expect these stocks to outperform over the long term.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Telecoms Sector-----------------------------------------------------------------------------------------
So what does 3G really mean in India?
● With all four 3G spectrum holders in Mumbai having launched
their services, we decided to conduct field trials to understand the
quality of various services, as well as the tariffs on offer.
● Data download speeds have improved significantly over the
GPRS speeds seen earlier, but are still a far cry from the
promised high speeds that we are awaiting from 3G. Further,
tariffs are not lower than comparative wireline tariffs and hence
could be a deterrant to mass uptake.
● Video calls are available on MTNL, Bharti, RCOM networks – and
are of acceptable quality. Mobile TV services are available with
Bharti, RCOM and Vodafone, and are of exceptionally good
quality with around 30-50 channels being offered by each
operator. However, on both video calls and mobile TV, we believe
tariffs are prohibitively high for these to gain mass acceptance.
● We see little upside to our estimate of 3G contribution to mobile
EBITDA staying below 5% three years after launch. However, we
remain positive on overall fundamentals and retain OP on Bharti
and Idea.
With Airtel and Vodafone launching their 3G networks in Mumbai this
week, all four 3G spectrum holders in this circle have launched their
services. We decided to conduct some field trials to check the tariffs
and quality of the new services. All trials were done at the same
location (our office located at Worli in South Mumbai) and using the
same handset.
Data speeds not very exciting yet
We calculated the average download speeds based on time taken to
download the CS 2009 annual report (a 7 MB pdf file) from our
corporate website – averaged over three trials for each operator. We
could get download speeds in the range of 24-140 kbps. We note that
both Airtel and Vodafone launched only this week, and Vodafone’s 3G
offering is currently free to use as a promotional offer. Hence, we
would not read too much into the differences between the speeds of
various operators, and only look at these numbers as the range of
speeds currently available on Indian 3G networks.
Though these speeds are higher than the GPRS download speeds
that were available before 3G launch (less than 10 kbps), it is a far cry
from the promised speeds of 0.5-3 Mbps.
Compared to prevalent wireline broadband tariffs of Rs1 per MB
download, the 3G data plans are not cheap.
Video calls – acceptable quality
Video calls worked on three networks – Bharti, RCOM and MTNL. The
quality of calls was of acceptable level with reasonably smooth videos.
However, the tariffs are prohibitively high, (Rs0.01-0.05 per sec), and
this service could remain just an amusement tool at current pricing.
Mobile TV – excellent quality
Mobile TV application is supported by Bharti, RCOM and Vodafone.
The quality is as good as viewing videos stored in phone memory.
Across operators, around 30-50 channels are offered currently
(various genres like news and entertainment). We found a 10-12
second lag between regular satellite TV images and the mobile TV
streams. However, even here we believe that the pricing is currently
too high for this to become a popular service.
Keeping our estimates on 3G low
At current price points, we believe that 3G services will fail to generate
mass market demands, and hence expect the uptake to remain slow.
In our models, 3G services contribute less than 5% of mobile EBITDA
even three years after launch. However, we believe that the overall
business fundamentals remain strong for GSM incumbents like Bharti
and Idea. Barring near-term share price volatility due to regulatory
uncertainty, we expect these stocks to outperform over the long term.
No comments:
Post a Comment