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Indian Telecom Sector ----------------------------------------------------------------------------------------
Seasonal weakness in April net adds — not worrying
● The April 2011 net adds data for GSM operators showed a decline
from the previous month (11.1 mn versus 14.5 mn). GSM
subscriber base has now grown to 581 mn (+39% YoY).
● We believe the weakness in net adds is linked to seasonality, and
thus do not see this as a negative data point. April is usually a
weak month for net adds after a strong March, this being likely
linked to year closure in March.
● While seasonality was always prominent in the case of BSNL/
MTNL, in recent years it is also becoming noticeable in the case
of private operators. BSNL/ MTNL, Vodafone, Bharti saw higher
drop-off in net adds while Idea saw a smaller decline. Idea
continues to gain subscriber market share (albeit slowly) at the
expense of BSNL/ MTNL.
● We expect the competitive environment to remain benign with
stable pricing. This should enable incumbents to consolidate their
revenue market share and grow margins. We retain our
OUTPERFORM ratings on Bharti and Idea.
Indian GSM operators, ex-RCOM and TTSL (not listed), added 11.1
mn subscribers in April 2011, taking the GSM subscriber base to
581 mn. (up 39% YoY). This is a decline from the 14.5 mn net adds
seen in the previous two quarters.
Fall in net adds linked to seasonality
Historically, GSM subscriber numbers have shown a seasonal dropoff
from March to April – likely linked to the financial year closure in
March. While this has always been prominently noticeable in the case
of BSNL/ MTNL, seasonality is becoming visible among the private
operators over the last few years (Fig 6). Among operators, significant
drop-off in net adds was visible in BSNL/ MTNL, Vodafone, Bharti and
Aircel, while Idea had a relatively smaller drop-off.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian Telecom Sector ----------------------------------------------------------------------------------------
Seasonal weakness in April net adds — not worrying
● The April 2011 net adds data for GSM operators showed a decline
from the previous month (11.1 mn versus 14.5 mn). GSM
subscriber base has now grown to 581 mn (+39% YoY).
● We believe the weakness in net adds is linked to seasonality, and
thus do not see this as a negative data point. April is usually a
weak month for net adds after a strong March, this being likely
linked to year closure in March.
● While seasonality was always prominent in the case of BSNL/
MTNL, in recent years it is also becoming noticeable in the case
of private operators. BSNL/ MTNL, Vodafone, Bharti saw higher
drop-off in net adds while Idea saw a smaller decline. Idea
continues to gain subscriber market share (albeit slowly) at the
expense of BSNL/ MTNL.
● We expect the competitive environment to remain benign with
stable pricing. This should enable incumbents to consolidate their
revenue market share and grow margins. We retain our
OUTPERFORM ratings on Bharti and Idea.
Indian GSM operators, ex-RCOM and TTSL (not listed), added 11.1
mn subscribers in April 2011, taking the GSM subscriber base to
581 mn. (up 39% YoY). This is a decline from the 14.5 mn net adds
seen in the previous two quarters.
Fall in net adds linked to seasonality
Historically, GSM subscriber numbers have shown a seasonal dropoff
from March to April – likely linked to the financial year closure in
March. While this has always been prominently noticeable in the case
of BSNL/ MTNL, seasonality is becoming visible among the private
operators over the last few years (Fig 6). Among operators, significant
drop-off in net adds was visible in BSNL/ MTNL, Vodafone, Bharti and
Aircel, while Idea had a relatively smaller drop-off.
Development of telecommunications was one of the essential improvements in the history of mankind. Wi-fi telecommunications was a dream that was developed for ages but came true only in twenty-first century. In India, telecommunications witnessed best of growth providing connection to every 7 out of ten Indians. India hosts 2nd largest wi-fi subscriber base after China, within less than 2 years of inception. The Indian telecommunication industry has undergone substantial structural revolution from its liberalisation till now. SWOT Analysis
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