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S u b s c r i b e r a d d i t i o n c on t i n u e s t o s l i d e …
Subscriber addition falls again…
Subscriber addition in the telecom industry fell for the fourth straight
month to record a 19 month low in June 2011. Industry added 8.6 million
GSM subscribers in June 2011 as against 9.5 million in May 2011. In
Q1FY12, industry added 29.2 million subscribers, which is 13.7 million
less than that of Q4FY11.
Top 3 lead the slide
The top 3 GSM operators saw a significant slide in subscriber addition in
June 2011. Airtel and Vodafone added 2.1 million subscribers each as
against 2.5 million and 2.4 million, respectively, in May 2011 while Idea
added 1.4 million subscribers against 1.8 million in May 2011. The share
in net adds also fell for the three to stand at 24.7%, 24.4% and 15.8% as
against 25.7%, 25.7% and 18.9% in May 2011, respectively.
BSNL – Better performer
After facing a decline in net adds for five straight months, BSNL recovered
to show an improvement in net adds in June 2011. BSNL added 0.8
million subscribers in June 2011 as against 0.5 million in May 2011. The
share in net adds also increased significantly to 9.8% as compared to a
mere 4.9% in May 2011.
Others
Aircel and Uninor added 0.9 million subscribers each in June 2011 as
against 1.1 million in May 2011. The share in net adds also fell for both to
10.7% and 11% against 11.7% and 12.0%, respectively, in May 2011.
Videocon improved from a subscriber reduction of 0.2 million in May
2011 to addition of 0.1 million subscribers in June 2011. Other companies
added 0.2 million subscribers in June 2011 as against a 0.3 million in May
2011.
Industry Outlook
The declining net adds of new operators exhibits softening competitive
intensity and drying up of the dual SIM phenomena. This would also curb
MoU cannibalisation for incumbent players. Steady MoU, moderate rate
of subscriber addition and a marginal fall in ARPM would lead revenue
growth, going forward. The new telecom policy is expected to be a
balanced one. This would help the incumbents in the long run. With
imminent consolidation in the industry, we expect larger players to
further consolidate their dominance in the industry.
Among our coverage stocks, both Bharti Airtel and Idea Cellular have so
far remained clear of any allegation, which is also reflective in their price
performance vis-à-vis the broader market and its peers. Both Airtel and
Idea have appreciated significantly in 12 months while RCom has declined
50.2% and the benchmark index is more or less flat over the same period.
With expected turnaround in African operations and strongest key metrics
among Indian telcos, 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 �� ��
S u b s c r i b e r a d d i t i o n c on t i n u e s t o s l i d e …
Subscriber addition falls again…
Subscriber addition in the telecom industry fell for the fourth straight
month to record a 19 month low in June 2011. Industry added 8.6 million
GSM subscribers in June 2011 as against 9.5 million in May 2011. In
Q1FY12, industry added 29.2 million subscribers, which is 13.7 million
less than that of Q4FY11.
Top 3 lead the slide
The top 3 GSM operators saw a significant slide in subscriber addition in
June 2011. Airtel and Vodafone added 2.1 million subscribers each as
against 2.5 million and 2.4 million, respectively, in May 2011 while Idea
added 1.4 million subscribers against 1.8 million in May 2011. The share
in net adds also fell for the three to stand at 24.7%, 24.4% and 15.8% as
against 25.7%, 25.7% and 18.9% in May 2011, respectively.
BSNL – Better performer
After facing a decline in net adds for five straight months, BSNL recovered
to show an improvement in net adds in June 2011. BSNL added 0.8
million subscribers in June 2011 as against 0.5 million in May 2011. The
share in net adds also increased significantly to 9.8% as compared to a
mere 4.9% in May 2011.
Others
Aircel and Uninor added 0.9 million subscribers each in June 2011 as
against 1.1 million in May 2011. The share in net adds also fell for both to
10.7% and 11% against 11.7% and 12.0%, respectively, in May 2011.
Videocon improved from a subscriber reduction of 0.2 million in May
2011 to addition of 0.1 million subscribers in June 2011. Other companies
added 0.2 million subscribers in June 2011 as against a 0.3 million in May
2011.
Industry Outlook
The declining net adds of new operators exhibits softening competitive
intensity and drying up of the dual SIM phenomena. This would also curb
MoU cannibalisation for incumbent players. Steady MoU, moderate rate
of subscriber addition and a marginal fall in ARPM would lead revenue
growth, going forward. The new telecom policy is expected to be a
balanced one. This would help the incumbents in the long run. With
imminent consolidation in the industry, we expect larger players to
further consolidate their dominance in the industry.
Among our coverage stocks, both Bharti Airtel and Idea Cellular have so
far remained clear of any allegation, which is also reflective in their price
performance vis-à-vis the broader market and its peers. Both Airtel and
Idea have appreciated significantly in 12 months while RCom has declined
50.2% and the benchmark index is more or less flat over the same period.
With expected turnaround in African operations and strongest key metrics
among Indian telcos, Bharti Airtel remains our top pick in the sector.
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