Telecom Sector
GSM net-adds @ record high of 8.5mn
GSM net-adds @ record high of 8.5mn in Dec-08 v/s 8.0mn in Nov-08
GSM subscriber net-adds for Dec-08 seen at record high at 8.1mn (ex-RCOM) v/s 8.0mn in Nov-08 (7.6mn ex-RCOM). Assuming RCOM's GSM monthly net-add run-rate of 0.38mn, GSM net-adds for Dec-08 would be the highest ever at 8.5mn. Strong net-adds are the result of healthy improvement by Idea & Vodafone and continued strong momentum by Bharti Airtel. Although the subscriber net-additions look to be extremely strong, what remains important is the incremental revenue contribution given the fact that operators continue to reduce the entry level pricing.
n Bharti Airtel reported strong addition of 2.73mn subscribers v/s 2.72mn in Nov-08
n Idea & Spice together showed remarkable improvement with net-adds of 1.5mn (v/s 1.3mn in Nov-08) led by healthy net-adds in Mumbai & Bihar Circles.
n Vodafone added a strong 2.17mn subscribers v/s 2.06mn in Nov-08 led by recent new circle launches. It also launched its operations in HP taking its presence pan India (except J&K).
Bharti Airtel's net-adds at 2.73mn during Dec-08 continue to remain strong and at par with previous few months. The net-adds reported continue to remain above our estimated 2.5mn/ month for FY09E.
Idea Cellular added strong 1.4mn subscribers in Dec-08 v/s 1.23mn in Nov-08 as also Spice reported a healthy net-add of 0.09mn v/s 0.07mn in Nov-08. The two together reported their highest monthly net addition at 1.5mn/ month.
RCOM has not yet reported the subscriber numbers yet. However assuming its monthly run-rate of 0.38mn the aggregate GSM net additions for Dec-08 would be at record high of 8.5mn subscribers a month.
Others: Vodafone reported strong net-adds of 2.17mn v/s 2.06mn in Nov-08. With launch in HP during Dec-08, Vodafone is now only 1 circle short (J&K) of pan India operations. Aircel net-adds at 0.7mn are once again slightly lower than the previous month, while BSNL has shown healthy improvement with addition of 0.87mn v/s 0.68mn in Nov-08.
We highlight that the recent pre-paid schemes launched by the operators provide an extremely negligible entry price point (Rs25 by RCOM, Rs99 by Bharti) which could boost the subscriber additions to newer highs. Hence we believe that the revenue market share and the incremental ARPU's are more critical to the profitability of the operators.
We maintain our BUY rating on Bharti Airtel, ACCUMULATE on RCOM and SELL on Idea Cellular.
No comments:
Post a Comment