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Telecom: Providing a voice to masses

Mar 24, 2009

Have you wondered why telecom companies are going all out to spread their business across India? Or have you wondered why so many companies have applied for telecom licenses in recent times? The answer is opportunity.

Telecom regulations: The month that was

Apr 20, 2007

In this series of articles, we shall be coming out with regular updates on the important happenings in the telecom sector that have transpired at the regulatory level. In this series, we shall enumerate the important regulations/announcements and gauge how they will change the scape of the telecom sector in India.

Telecom: Infrastructure sharing

Apr 13, 2007

Currently the number of mobile subscribers in India is approximately 175 m. This massive subscriber base is supported by an equally massive infrastructure. There are currently about 1,00,000 telecom towers in the country and in order to support the targeted figure of 500 m subscribers by 2012, we would need about 3,30,000 towers. The largest telecom player in terms of number of subscribers Bharti Airtel presently has approximately 40,000 towers to support a customer base of a little over 37 m (a

Telecom: Hiving off tower business

Mar 30, 2007

Recently almost all the major private sector telecom companies have come out with announcements with regard to hiving off of their telecom tower businesses. While the strategy of hiving off the towers have been widely reported, investors must note that there are other telecom infrastructural assets also that the companies wish to offload from their books along with the telecom towers. The telecom companies want to embrace an asset light model so as to be able to focus more on the core business o

Dupont Analysis of Telecom Companies

Mar 16, 2007

Return on equity is a measure that most investors are greatly concerned about as it is a measure of what return the company is able to generate on the shareholders money. While there is no doubt as to its relevance, the return can in itself be broken down into three components to further analyse how these returns were earned and what mainly helped in generating the same. The ratio helps to understand where superior (or inferior) return is derived from, by breaking it down to its components.

Telecom: Blessed product, sinned taxes!

Mar 9, 2007

The month of February 2007 saw the completion of one of the biggest deals to have been done in the Indian telecom market. Vodafone paid a whopping US$ 12 bn to acquire HTIL’s 67% stake in Hutch-Essar to gain a foothold in the world’s fastest growing telecom market. The deal was done at an EV per subscriber of US$ 815, indicating the premium that Indian telecom companies have come to command in just

Identifying a telecom stock: Do's and Don'ts

Mar 6, 2007

In Views on News, Equitymaster has tried to highlight here some factors one should keep in mind before investing in an Telecom company. Know more

GSM Vs CDMA: Which way to go?

Jan 12, 2007

From being used as static devices in the time they were launched (in 1945), mobile phones have really come a long way. The journey has, in fact, covered the entire distance from ‘0G’ to ‘3G’! The first generation mobiles were introduced in the US in October 1983, and it was anticipated that by the year 1990 there would be 0.7 m cell users. The fact was this number turned out to be a whooping 4 m, forcing engineers to think differently, to optimize spectrum usage and thereby enhance the capacity

Idea Cellular: First cut

Dec 29, 2006

Idea was originally incorporated as Birla Communications Limited, with the license to provide cellular services in Maharashtra and Gujarat. Later on, stake acquisitions by AT&T and the Tata Group, the company was renamed Birla-Tata-AT&T, with operations spread in Andhra Pradesh and Chattisgarh. The company seeking brand positioning changed its name to Idea Cellular Limited in 2001 and breached the 1 m subscriber mark. The company has, in the past few years, seen exponential growth in terms of ad

Telecom: The rising!

Dec 28, 2006

The great Indian telecom story surged ahead during 2006, with even more vigour than what was seen in 2005. The base fuel for the growth of the industry in 2006 was the swelling subscriber base. The targets for mobile subscribers were met ahead of deadlines. Encouragingly enough, a larger share of these numbers was seen coming from non-metros. And in October 2006, when the India mobile telecom industry set a world record for the maximum number of monthly addition (6.6 m), the maximum growth was r

Telecom: India Vs India

Dec 19, 2006

As per the agenda outlined by the Union Communication and IT Ministry in May 2006, the telecom sector had been given a guiding framework, in terms of point wise targets, to ensure its planned development and the percolation of accruing benefits across all strata of the society. The agenda revolves around telecom network expansion, bridging the urban-rural divide, broadband coverage, infrastructure sharing and 3G mobile services to name a few. Let us understand the targets set by the ministry and

Internet: Webbing India’s future

Dec 12, 2006

A recent study paper of the TRAI (Telecom Regulatory Authority of India) on Internet usage in the country, paints a sorry picture. The report states that although the government has missed its target of total Internet subscribers in the country only by a whisker (targeted 6 m, achieved 5.5 m) for 2005, it has missed out on its broadband subscribers target by a mile (targeted 3m, achieved less than 0.2 m).

Telecom: The Goliath cometh!

Dec 27, 2005

The year 2005 has been another year of reckoning for the telecom sector. Explosive growth rate in the mobile telephony segment was almost counterbalanced by sedate growth of the fixed line and broadband businesses. Pressure on tariffs continued and this aided the improvement in teledensity. The year also witnessed increasing gap between the urban and the rural teledensity. At the close of the year, while urban teledensity stands at around 33%, rural teledensity is a meagre 2%. India currently ha

Telecom: It’s ringing!

Dec 30, 2004

2004 has been a momentous year for the Indian telecom sector. Explosive growth rate in the mobile telephony segment was almost counterbalanced by rapidly falling profitability due to regulatory pressures and pressure on tariffs. Increasing consolidation activity was also prominent throughout the year. The growth in the industry was clearly reflected in the way major telecom players performed on the stock markets. Against the Sensex gains of 14%, the telecom index grew by an almost double 27% dur

Bharti Tele: Meeting expectations

Oct 28, 2004

Bharti Televentures, the largest mobile telphony services provider in the country, continues to report strong financial performance in FY05. For 2QFY05, the company has reported a 63% YoY rise in topline while the bottomline growth stood at 257%, albeit on a smaller base. The improvement in bottomline continues as the company moves towards steady state after years of expansion in various circles. Topline growth as well as strong improvement in its operating margins have led to the improvement in

VSNL: Extraordinary effect

Oct 26, 2004

VSNL has reported improved performance in the second quarter of FY05. While the growth in topline has been only marginal, the operating margins have shown a marked improvement. Expansion in margins seems to indicate an improvement in the company's core business. We would also like to point out that though the topline growth has been negligible, it is indeed better than the performance that the company reported during the past two years, when topline had declined on a consistent basis.

Telecom: Momentum intact

Oct 8, 2004

The telecom sector is one of the sunshine sectors in the Indian currently and looking at the growth numbers (in subscribers) it is rightly so. The growth in subscriber additions continues at a fast pace and there have been certain signs of improvement in the monthly additions in the month of September. For the month of September the total additions in telecom subscriber base stood at nearly 2 m. Of these additions nearly 1.8 m belonged to the mobile services category, while the rest belonged to

Bharti V/s China Mobile

Sep 30, 2004

The Indian telecom sector, especially the mobile telephony segment, has come into its own in the last two years and is finally living up to its potential of high growth. With an addition of over 1.5 m subscribers every month to the total subscriber base, India is one of the fastest growing mobile markets in the world and compares favorably with neighbour China in terms of its growth potential.

Telecom: The Prepaid conundrum

Aug 27, 2004

The Indian mobile telephony sector is being hailed as one of the success stories of economic liberalisation in the country. The growth numbers of this sector are used as an indication of this success and as per these numbers India is the fastest growing mobile market in the world. While the growth numbers may be true, we must understand that the growth is at a smaller base and hence the inflated growth numbers.

MTNL: Going nowhere?

Aug 13, 2004

MTNL, the public sector telecom behemoth, had recently announced disappointing financial performance for the June quarter. While at the first look the 12% growth in bottomline seems encouraging, if one were to discount the rise in other income, the growth would have been marginal. The topline too has disappointed, registering a 3% YoY fall in the June quarter. MTNL has witnessed a sharp fall in its operating margins further indicating the weakness of its financial performance.

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