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Telecom Industry
n Revenue growth momentum to continue in Q4FY11. We expect our Telecom universe to register QoQ revenue growth
in the range of 3-5% in Q4FY11E, led by stabilization of price war coupled with strong subscriber net adds.
n Due to launch of MNP during Q4FY11E, we expect APRU and ARPM decline to be in a range of 3% and 1% for Bharti
and Idea, respectively. While the decline is expected to be higher for Rcom.
n Nevertheless, the traffic on network is expected to grow in the range of 4% and 7% QoQ for Bharti and Idea,
respectively. It is expected to be at 1.2% for Rcom as the company is reducing free minutes on the network.
n Led by continued healthy subscriber addition, we expect mobility revenue for Bharti, Idea and Rcom to grow by 3.5%,
5.5% and 1.7%, respectively.
n Despite of revenue growth, EBITDA margin of our coverage universe is expected to remain flat at 31.8% QoQ
(considering Bharti EBITDA for Q3FY11 excluding one time re-branding cost) due to higher marketing expenses
pertaining to aggressive campaigns for MNP and 3G launch.
n MNP was launched on pan India basis on 20th January, 2011. Latest data released by TRAI shows just 38lacs
subscribers (i.e. ~0.5% of total subscriber base) opted for the service.
n All the players have launched 3G services, Idea was the last one to roll out at the end of March, 2011. As per the
recent data, the pricing offered for 3G services indicates absence of intense price war in the industry. As per the
media reports, Bharti has added 2 million subscribers on its 3G network till now.
n Relaxation on the stringent norms in new telecom policy (expected any time in April, 2011)) could be a positive trigger
for the industry.
n We rate BUY on Tulip Telecom, HOLD on Bharti, reduce on RCOM and SELL on Idea Cellular. Bharti Airtel remains
our top pick in the sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Telecom Industry
n Revenue growth momentum to continue in Q4FY11. We expect our Telecom universe to register QoQ revenue growth
in the range of 3-5% in Q4FY11E, led by stabilization of price war coupled with strong subscriber net adds.
n Due to launch of MNP during Q4FY11E, we expect APRU and ARPM decline to be in a range of 3% and 1% for Bharti
and Idea, respectively. While the decline is expected to be higher for Rcom.
n Nevertheless, the traffic on network is expected to grow in the range of 4% and 7% QoQ for Bharti and Idea,
respectively. It is expected to be at 1.2% for Rcom as the company is reducing free minutes on the network.
n Led by continued healthy subscriber addition, we expect mobility revenue for Bharti, Idea and Rcom to grow by 3.5%,
5.5% and 1.7%, respectively.
n Despite of revenue growth, EBITDA margin of our coverage universe is expected to remain flat at 31.8% QoQ
(considering Bharti EBITDA for Q3FY11 excluding one time re-branding cost) due to higher marketing expenses
pertaining to aggressive campaigns for MNP and 3G launch.
n MNP was launched on pan India basis on 20th January, 2011. Latest data released by TRAI shows just 38lacs
subscribers (i.e. ~0.5% of total subscriber base) opted for the service.
n All the players have launched 3G services, Idea was the last one to roll out at the end of March, 2011. As per the
recent data, the pricing offered for 3G services indicates absence of intense price war in the industry. As per the
media reports, Bharti has added 2 million subscribers on its 3G network till now.
n Relaxation on the stringent norms in new telecom policy (expected any time in April, 2011)) could be a positive trigger
for the industry.
n We rate BUY on Tulip Telecom, HOLD on Bharti, reduce on RCOM and SELL on Idea Cellular. Bharti Airtel remains
our top pick in the sector.
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