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August 2011 - GSM net subscriber addition
Cellular Operators Association of India (COAI) reported GSM subscriber data for August
2011. GSM subscriber net addition data continued its declining trend during this month as
well and was reported to be weak on mom basis across all telecom operators (except
Idea). Net subscriber addition number stood at merely 5.3mn (almost at all-time low),
down by whopping 30% mom, taking the total GSM subscriber base to 611.8mn
subscribers in August 2011.
Weakness across the board: In August 2011, Net addition run rate on mom basis for all
operators (except Idea) dropped off steeply. Among the incumbents, Bharti and Vodafone
reported a significant decline in their net subscriber addition numbers, with net addition
numbers dropping to merely 1.2mn and 1.1mn, down 23.8% and 24.0% mom,
respectively. BSNL, which was bucking the declining trend since the last two months,
reported a significant decline in net subscriber addition in August 2011 to only 0.4mn from
1.8mn in July 2011. Idea emerged as the dark horse by reporting net subscriber addition
of whopping 2.3mn as against 1.0mn in July 2011, up 132% mom, which led to a 30bp
mom increase in its subscriber market share to 16.1%. Subscriber market share of Bharti
and Vodafone remained stable mom at 28.1% and 23.6%, respectively; however, market
share of BSNL declined by 10bp to 14.8%.
Among new operators, Videocon and S Tel reported a net decline of 0.65mn and 0.1mn
subscribers in their subscriber base, respectively. Net subscriber addition of Uninor
declined by 67.0% mom, as it added merely 0.3mn subscribers. Subscriber market share
of all new operators remained flat on mom basis, expect for Videocon, which reported a
20bp decline in its subscriber market share to 1.0% because of net reduction of 0.65mn
subscribers in its subscriber base.
Circle-wise highlights: In August 2011, the net addition run rate of all the circles declined
significantly, the highest being for Metro circle, which reported addition of merely 0.4mn
subscribers, down 57.2% mom from 0.9mn in July 2011. This led to a decline in net
subscriber market share of Metro circle to 7.6% from 12.4%. In the Metro circle, during the
month, Idea reported the highest net addition of 0.27mn subscribers, followed by
Vodafone, Bharti and Aircel, which reported 0.23mn, 0.09mn and 0.05mn net subscriber
additions, respectively. Subscriber addition run rate of A circle remained comparatively
stable at 2.3mn as against 2.6mn in July 2011. Subscriber additions in B and C circles
also fell to 2.0mn and 0.6mn from 2.7mn and 1.3mn in July 2011, respectively.
For Bharti, such a decline in net subscriber additions was along expected lines, thus our
estimates remain unchanged. However, Idea’s net addition numbers came in as a positive
surprise. The driving force for the overall sector is the increase in tariff rates as well as
increasing use of value-added services, which will lead to higher ARPU for all players,
thereby aiding profitability. Bharti continues to be a better bet due to its low-cost integrated
model (owned tower infrastructure), potential opportunity to scale up in Africa, established
leadership in revenue and subscriber market share and relatively better KPIs. However,
overall we remain Neutral on the telecom sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
August 2011 - GSM net subscriber addition
Cellular Operators Association of India (COAI) reported GSM subscriber data for August
2011. GSM subscriber net addition data continued its declining trend during this month as
well and was reported to be weak on mom basis across all telecom operators (except
Idea). Net subscriber addition number stood at merely 5.3mn (almost at all-time low),
down by whopping 30% mom, taking the total GSM subscriber base to 611.8mn
subscribers in August 2011.
Weakness across the board: In August 2011, Net addition run rate on mom basis for all
operators (except Idea) dropped off steeply. Among the incumbents, Bharti and Vodafone
reported a significant decline in their net subscriber addition numbers, with net addition
numbers dropping to merely 1.2mn and 1.1mn, down 23.8% and 24.0% mom,
respectively. BSNL, which was bucking the declining trend since the last two months,
reported a significant decline in net subscriber addition in August 2011 to only 0.4mn from
1.8mn in July 2011. Idea emerged as the dark horse by reporting net subscriber addition
of whopping 2.3mn as against 1.0mn in July 2011, up 132% mom, which led to a 30bp
mom increase in its subscriber market share to 16.1%. Subscriber market share of Bharti
and Vodafone remained stable mom at 28.1% and 23.6%, respectively; however, market
share of BSNL declined by 10bp to 14.8%.
Among new operators, Videocon and S Tel reported a net decline of 0.65mn and 0.1mn
subscribers in their subscriber base, respectively. Net subscriber addition of Uninor
declined by 67.0% mom, as it added merely 0.3mn subscribers. Subscriber market share
of all new operators remained flat on mom basis, expect for Videocon, which reported a
20bp decline in its subscriber market share to 1.0% because of net reduction of 0.65mn
subscribers in its subscriber base.
Circle-wise highlights: In August 2011, the net addition run rate of all the circles declined
significantly, the highest being for Metro circle, which reported addition of merely 0.4mn
subscribers, down 57.2% mom from 0.9mn in July 2011. This led to a decline in net
subscriber market share of Metro circle to 7.6% from 12.4%. In the Metro circle, during the
month, Idea reported the highest net addition of 0.27mn subscribers, followed by
Vodafone, Bharti and Aircel, which reported 0.23mn, 0.09mn and 0.05mn net subscriber
additions, respectively. Subscriber addition run rate of A circle remained comparatively
stable at 2.3mn as against 2.6mn in July 2011. Subscriber additions in B and C circles
also fell to 2.0mn and 0.6mn from 2.7mn and 1.3mn in July 2011, respectively.
For Bharti, such a decline in net subscriber additions was along expected lines, thus our
estimates remain unchanged. However, Idea’s net addition numbers came in as a positive
surprise. The driving force for the overall sector is the increase in tariff rates as well as
increasing use of value-added services, which will lead to higher ARPU for all players,
thereby aiding profitability. Bharti continues to be a better bet due to its low-cost integrated
model (owned tower infrastructure), potential opportunity to scale up in Africa, established
leadership in revenue and subscriber market share and relatively better KPIs. However,
overall we remain Neutral on the telecom sector.
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