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Telecom
India
Feb GSM SIM net adds – strong growth and solid show from incumbents. India’s
GSM operators (excluding RCOM and TTSL) added a net 14.7 mn SIMs in the month of
Feb 2011 versus 13.7 mn in Jan. Bharti, Idea and Vodafone continued their solid
growth, together accounting for 63% of net adds. Nevertheless, these are SIM net adds
and the absolute numbers bear little meaning – market share and trends do, of course.
Bharti and Idea are on track to meet our end-March 2011E SIM base estimates.
Feb 2011 GSM SIM net adds – strong growth continues
` GSM operators, excluding RCOM and TTSL, added a net 14.7 mn SIMs in Feb 2011, an uptick
from 13.7 mn reported in Jan 2011. Uptick was driven primarily by the swing in Videocon’s net
adds – from a negative 1.3 mn in Jan to a positive 0.55 mn in Feb.
` Circle-wise net adds distribution remained steady – Metros (10%), A circles (35%), B circles
(40%) and C circles (15%).
` Player-wise performance suggests another strong month for the incumbents. Bharti’s net adds
remained steady at 3.2 mn versus 3.3 mn in Jan, Idea’s were flat at 2.5 mn, while Vodafone’s
surged to 3.6 mn from 3.1 mn in the previous month. The top-3 GSM operators accounted for
63% of the net adds. Net adds slowed down for BSNL (to 1.5 mn from 2.2 mn in Jan and an
average of 2.9 mn in the Dec 2010 quarter), and Uninor (to 1.3 mn from 1.8 mn in Jan and an
average of 2.4 mn in the Dec 2010 quarter). Other players’ net adds were steady mom.
` Slowdown in net adds for some players could be driven by aggressive churning rather than just
a slowdown in gross adds. The TRAI has started reporting VLR data periodically which suggests
a poor active subs proportion for players other than Bharti, Idea and Vodafone. We discuss the
latest VLR data in brief in the next paragraph.
Jan 2011 VLR data – key interpretations
The TRAI has started reporting the peak Visitor Location Register (VLR) subs data for the past few
months. VLR subs essentially represent the number of SIMs connected to one of the wireless
networks in India at a point in time. Given the multi-SIM phenomenon in the country, VLR data is
the closest proxy that one has to the unique subs base (548 mn at end-Jan 2011) in the country.
The latest two months’ (Dec 2010 and Jan 2011) VLR subs data player-wise is depicted in Exhibit
2, while Exhibit 3 depicts the player-wise, circle-wise data for Jan 2011. A few observations
` Bharti (92.6%) and Idea had the highest VLR-to-reported subs ratio in Jan 2011. The high VLR
ratio for these companies demonstrates several things, the most important ones being (1)
superior quality subs reporting and churn norms of the two companies, (2) superior network
coverage, and (3) higher primary SIM status; the secondary SIM (of other operators) is possibly
activated only to make outgoing calls, at certain points in a day.
` On the flip side, the VLR-ratio adjusted underlying ARPU (on active subs) for other operators is
much higher than their reported numbers suggest. Essentially, the ARPU differential of a Bharti
versus others in the industry may not be as high as ARPU computed on reported subs would
suggest (Exhibit 4). This also means that the differential in revenue market share and subs
market share for Bharti is not as high as is normally perceived – Bharti had a Dec 2010 quarter
RMS of 29.2%, Dec 2010 reported subs market share of 20.3%, and VLR subs share of 26.2%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Telecom
India
Feb GSM SIM net adds – strong growth and solid show from incumbents. India’s
GSM operators (excluding RCOM and TTSL) added a net 14.7 mn SIMs in the month of
Feb 2011 versus 13.7 mn in Jan. Bharti, Idea and Vodafone continued their solid
growth, together accounting for 63% of net adds. Nevertheless, these are SIM net adds
and the absolute numbers bear little meaning – market share and trends do, of course.
Bharti and Idea are on track to meet our end-March 2011E SIM base estimates.
Feb 2011 GSM SIM net adds – strong growth continues
` GSM operators, excluding RCOM and TTSL, added a net 14.7 mn SIMs in Feb 2011, an uptick
from 13.7 mn reported in Jan 2011. Uptick was driven primarily by the swing in Videocon’s net
adds – from a negative 1.3 mn in Jan to a positive 0.55 mn in Feb.
` Circle-wise net adds distribution remained steady – Metros (10%), A circles (35%), B circles
(40%) and C circles (15%).
` Player-wise performance suggests another strong month for the incumbents. Bharti’s net adds
remained steady at 3.2 mn versus 3.3 mn in Jan, Idea’s were flat at 2.5 mn, while Vodafone’s
surged to 3.6 mn from 3.1 mn in the previous month. The top-3 GSM operators accounted for
63% of the net adds. Net adds slowed down for BSNL (to 1.5 mn from 2.2 mn in Jan and an
average of 2.9 mn in the Dec 2010 quarter), and Uninor (to 1.3 mn from 1.8 mn in Jan and an
average of 2.4 mn in the Dec 2010 quarter). Other players’ net adds were steady mom.
` Slowdown in net adds for some players could be driven by aggressive churning rather than just
a slowdown in gross adds. The TRAI has started reporting VLR data periodically which suggests
a poor active subs proportion for players other than Bharti, Idea and Vodafone. We discuss the
latest VLR data in brief in the next paragraph.
Jan 2011 VLR data – key interpretations
The TRAI has started reporting the peak Visitor Location Register (VLR) subs data for the past few
months. VLR subs essentially represent the number of SIMs connected to one of the wireless
networks in India at a point in time. Given the multi-SIM phenomenon in the country, VLR data is
the closest proxy that one has to the unique subs base (548 mn at end-Jan 2011) in the country.
The latest two months’ (Dec 2010 and Jan 2011) VLR subs data player-wise is depicted in Exhibit
2, while Exhibit 3 depicts the player-wise, circle-wise data for Jan 2011. A few observations
` Bharti (92.6%) and Idea had the highest VLR-to-reported subs ratio in Jan 2011. The high VLR
ratio for these companies demonstrates several things, the most important ones being (1)
superior quality subs reporting and churn norms of the two companies, (2) superior network
coverage, and (3) higher primary SIM status; the secondary SIM (of other operators) is possibly
activated only to make outgoing calls, at certain points in a day.
` On the flip side, the VLR-ratio adjusted underlying ARPU (on active subs) for other operators is
much higher than their reported numbers suggest. Essentially, the ARPU differential of a Bharti
versus others in the industry may not be as high as ARPU computed on reported subs would
suggest (Exhibit 4). This also means that the differential in revenue market share and subs
market share for Bharti is not as high as is normally perceived – Bharti had a Dec 2010 quarter
RMS of 29.2%, Dec 2010 reported subs market share of 20.3%, and VLR subs share of 26.2%.
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