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India Telecoms
Our ground checks of 3G tariffs and own user experience
CLSA
3G gathers momentum
Indian 3G service rollouts are gathering momentum: Bharti Airtel 3G
is currently available in 19 cities and targeted to reach 400 by
December 2011. In less than six weeks Bharti has reached >2m 3G
subscribers and already has 20-22m of its 159m 2G subscribers
carrying 3G handsets. While a ground check on 3G data tariffs across
operators reveals no price competition and no handset subsidies,
even in the bundled schemes. Also while our own user experience of
3G services was mixed, the faster download speed, new content and
aggressive promotions will result in rapid migration to 3G networks,
enabling leading operators to cushion Arpu and even gain market-share.
Bharti remains our top pick and we maintain OPF.
3G service rollouts and take-up gathers momentum.
Six leading mobile operators led by Bharti, Vodafone and Reliance
Communications (RCom) have launched 3G services in key markets and have
ambitions network expansion plans over the next few quarters. While Tata
Docomo and RCom were the first to offer 3G services as early as Nov/Dec 2010,
momentum picked up only with Bharti launch starting January, Aircel in February
and Vodafone and Idea in March 2011. Bharti’s 3G services have now been
available in 19 cities for less than six weeks but it has already reached >2m 3G
subscribers. We estimate Bharti already has 20-22m of its 159m 2G subscribers
carrying 3G handsets, so there is likely to be rapid migration to the new network,
especially as Bharti expands its 3G network from 19 to 400 cities by Dec 2011.
3G offers target all but carry no handset subsidies.
Our ground checks of 3G tariffs reveal that, while RCom and Tata DoCoMo bundle
voice minutes with data, Bharti and Idea provide separate 3G data plans on top of
2-2.5G voice tariffs. Also while Bharti has been charging for 3G from day one,
Vodafone is still offering 3G data to its subscribers free of charge. A further
comparison reveals RCom 3G data tariffs are competitive versus Bharti and Idea
but are at >50% premium to Tata DoCoMo bundled voice and data offers and for
post-paid the plans range from Rs199-2,499 offering 300-6,000 minutes of talk
time with 50MB-5GB of data. For mass market subscribers 3G operators are
offering data plans for as little as Rs8-10/ day with 10MB of data. Bharti and Idea
too have 3G data plans starting at Rs100 for 100MB of data to Rs750 for 2GB and
data offers across operators are comparable. Idea has also introduced a time
based billing which offers 30-120mins of downloading for Rs44-148. However one
thing all 3G operators have in common is that they do not provide handset
subsidies, even in the bundled schemes currently on offer from only RCom and
Tata DoCoMo on select high-end handsets. In future we expect more handset
bundled schemes, especially in the high-end category (iPhone), but still no 3G
handset subsidies.
Our own 3G services user experience mixed.
Also over the last three weeks we used 3G services from Bharti and Vodafone
across markets, with mixed results. While we found limited difference in voice
quality and browsing between 2.5G and 3G services, the difference was significant
when downloading files. In specific instances downloads speeds for 3G were >2x
those of our 2.5G network. Also on 3G there is a significant difference in the
quality of live streaming, which has picked up significantly with the recent mega
cricket World Cup event and with operators aggressively promoting 3G
entertainment (Mobile TV) and other VAS. Operators say that top sites browsed by
mobile users with high speeds are Facebook, Twitter and Google, as well as the
operators’ own application portals. While our own user experience of 3G services
was mixed, the faster download speed, new content and aggressive promotions
will result in rapid migration to 3G networks, enabling leading operators to
cushion Arpu and even gain market-share. Bharti remains our top pick.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Telecoms
Our ground checks of 3G tariffs and own user experience
CLSA
3G gathers momentum
Indian 3G service rollouts are gathering momentum: Bharti Airtel 3G
is currently available in 19 cities and targeted to reach 400 by
December 2011. In less than six weeks Bharti has reached >2m 3G
subscribers and already has 20-22m of its 159m 2G subscribers
carrying 3G handsets. While a ground check on 3G data tariffs across
operators reveals no price competition and no handset subsidies,
even in the bundled schemes. Also while our own user experience of
3G services was mixed, the faster download speed, new content and
aggressive promotions will result in rapid migration to 3G networks,
enabling leading operators to cushion Arpu and even gain market-share.
Bharti remains our top pick and we maintain OPF.
3G service rollouts and take-up gathers momentum.
Six leading mobile operators led by Bharti, Vodafone and Reliance
Communications (RCom) have launched 3G services in key markets and have
ambitions network expansion plans over the next few quarters. While Tata
Docomo and RCom were the first to offer 3G services as early as Nov/Dec 2010,
momentum picked up only with Bharti launch starting January, Aircel in February
and Vodafone and Idea in March 2011. Bharti’s 3G services have now been
available in 19 cities for less than six weeks but it has already reached >2m 3G
subscribers. We estimate Bharti already has 20-22m of its 159m 2G subscribers
carrying 3G handsets, so there is likely to be rapid migration to the new network,
especially as Bharti expands its 3G network from 19 to 400 cities by Dec 2011.
3G offers target all but carry no handset subsidies.
Our ground checks of 3G tariffs reveal that, while RCom and Tata DoCoMo bundle
voice minutes with data, Bharti and Idea provide separate 3G data plans on top of
2-2.5G voice tariffs. Also while Bharti has been charging for 3G from day one,
Vodafone is still offering 3G data to its subscribers free of charge. A further
comparison reveals RCom 3G data tariffs are competitive versus Bharti and Idea
but are at >50% premium to Tata DoCoMo bundled voice and data offers and for
post-paid the plans range from Rs199-2,499 offering 300-6,000 minutes of talk
time with 50MB-5GB of data. For mass market subscribers 3G operators are
offering data plans for as little as Rs8-10/ day with 10MB of data. Bharti and Idea
too have 3G data plans starting at Rs100 for 100MB of data to Rs750 for 2GB and
data offers across operators are comparable. Idea has also introduced a time
based billing which offers 30-120mins of downloading for Rs44-148. However one
thing all 3G operators have in common is that they do not provide handset
subsidies, even in the bundled schemes currently on offer from only RCom and
Tata DoCoMo on select high-end handsets. In future we expect more handset
bundled schemes, especially in the high-end category (iPhone), but still no 3G
handset subsidies.
Our own 3G services user experience mixed.
Also over the last three weeks we used 3G services from Bharti and Vodafone
across markets, with mixed results. While we found limited difference in voice
quality and browsing between 2.5G and 3G services, the difference was significant
when downloading files. In specific instances downloads speeds for 3G were >2x
those of our 2.5G network. Also on 3G there is a significant difference in the
quality of live streaming, which has picked up significantly with the recent mega
cricket World Cup event and with operators aggressively promoting 3G
entertainment (Mobile TV) and other VAS. Operators say that top sites browsed by
mobile users with high speeds are Facebook, Twitter and Google, as well as the
operators’ own application portals. While our own user experience of 3G services
was mixed, the faster download speed, new content and aggressive promotions
will result in rapid migration to 3G networks, enabling leading operators to
cushion Arpu and even gain market-share. Bharti remains our top pick.
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