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India Equity Research Reports, IPO and Stock News
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Key Takeaways
Core essence: The Indian telecom sector is at a turning point, with increasing rationality
in competition, sustainable voice growth (led by the rural market), large data opportunity,
and peak investments already behind. The best in the Africa business is yet to come.
Industry insights
Increasing rationality in competitive activity as underscored by recent pricing actions,
focus on paying customers as well as sales and distribution cost management.
Real wireless subscribers in India are estimated at ~600m, with actual rural
penetration at just 20-22%.
Non-voice revenue at 13.5% for the industry has significant room for improvement.
However, the industry will need to work hard to achieve the full potential of data
opportunity.
Africa market penetration in Bharti's footprint is relatively low at ~30%.
Telecom operators are keenly looking at the New Telecom Policy 2011 (NTP 2011).
Bharti expects the policy to (1) be comprehensive, (2) provide exit opportunities to
unviable operators, and (3) provide a level-playing field.
Company vision and strategy
Bharti is best positioned to capture rural and data opportunities.
The company has demonstrated its leadership in the market, with initiatives like
passive infrastructure sharing and recent tariff corrections.
Relentless focus on efficiency improvement, as underscored by the recent organization
restructuring.
Focus on continued execution in the Africa business. The business delivery model
has been aligned similar to India. Bharti would be looking to expand the Africa
footprint in the long-term.
Key triggers/milestones/challenges
NTP 2011 would be a key event to watch for.
Bharti aims to bring down its net debt/EBITDA ratio to 2x over the next one year
v/s 2.6x currently.
Mr Akhil Gupta is Deputy Group
CEO and Managing Director of Bharti
Enterprises and a Director at Bharti
Airtel. He spearheaded the group's
transformational initiatives including
outsourcing deals in the areas of
information technology (IT) with IBM,
network management with Ericsson
and Nokia and outsourcing of call
center management to leading
international BPOs. He
conceptualized and implemented the
separation of passive mobile
infrastructure and formed Indus
Towers, a JV with Vodafone and
Idea, the largest tower company in
the world.
In June 2010, Mr Gupta was
instrumental in executing the
acquisition of the Zain Group's mobile
operations in 15 countries in Africa
for an enterprise valuation of
USD10.7b, the second largest
outbound deal by an Indian
company. For this, he was awarded
the Asia Corporate Dealmaker
Award at the Asia-Pacific M&A Atlas
Awards in September 2010.
He led the formation of partnerships
for Bharti with leading international
operators like British Telecom,
Singapore Telecom and most recently
Vodafone, besides the induction of
financial investors like Warburg
Pincus, Asia Infrastructure Fund and
New York Life.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Key Takeaways
Core essence: The Indian telecom sector is at a turning point, with increasing rationality
in competition, sustainable voice growth (led by the rural market), large data opportunity,
and peak investments already behind. The best in the Africa business is yet to come.
Industry insights
Increasing rationality in competitive activity as underscored by recent pricing actions,
focus on paying customers as well as sales and distribution cost management.
Real wireless subscribers in India are estimated at ~600m, with actual rural
penetration at just 20-22%.
Non-voice revenue at 13.5% for the industry has significant room for improvement.
However, the industry will need to work hard to achieve the full potential of data
opportunity.
Africa market penetration in Bharti's footprint is relatively low at ~30%.
Telecom operators are keenly looking at the New Telecom Policy 2011 (NTP 2011).
Bharti expects the policy to (1) be comprehensive, (2) provide exit opportunities to
unviable operators, and (3) provide a level-playing field.
Company vision and strategy
Bharti is best positioned to capture rural and data opportunities.
The company has demonstrated its leadership in the market, with initiatives like
passive infrastructure sharing and recent tariff corrections.
Relentless focus on efficiency improvement, as underscored by the recent organization
restructuring.
Focus on continued execution in the Africa business. The business delivery model
has been aligned similar to India. Bharti would be looking to expand the Africa
footprint in the long-term.
Key triggers/milestones/challenges
NTP 2011 would be a key event to watch for.
Bharti aims to bring down its net debt/EBITDA ratio to 2x over the next one year
v/s 2.6x currently.
Mr Akhil Gupta is Deputy Group
CEO and Managing Director of Bharti
Enterprises and a Director at Bharti
Airtel. He spearheaded the group's
transformational initiatives including
outsourcing deals in the areas of
information technology (IT) with IBM,
network management with Ericsson
and Nokia and outsourcing of call
center management to leading
international BPOs. He
conceptualized and implemented the
separation of passive mobile
infrastructure and formed Indus
Towers, a JV with Vodafone and
Idea, the largest tower company in
the world.
In June 2010, Mr Gupta was
instrumental in executing the
acquisition of the Zain Group's mobile
operations in 15 countries in Africa
for an enterprise valuation of
USD10.7b, the second largest
outbound deal by an Indian
company. For this, he was awarded
the Asia Corporate Dealmaker
Award at the Asia-Pacific M&A Atlas
Awards in September 2010.
He led the formation of partnerships
for Bharti with leading international
operators like British Telecom,
Singapore Telecom and most recently
Vodafone, besides the induction of
financial investors like Warburg
Pincus, Asia Infrastructure Fund and
New York Life.
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