Contents
Investment Argument ..........................................................................................4
Competition can’t be underestimated; but incumbency an advantage ....................4
Margin pressures not over yet; 3G to delay FCF generation ...................................7
Towers: Improving economics ...............................................................................9
Valuations attractive, but sector concerns to restrict a rebound ............................10
Valuations & View: Limited downside risk........................................................13
Indian Wireless Market: More steam left...........................................................19
Strong growth potential but escalating competitive intensity................................19
592m subscribers by FY11E; rural penetration to rise faster .................................24
Competition aplenty; but incumbents score...........................................................30
New entrants mean serious business.....................................................................30
Regulatory enviornment is benign for new entrants .............................................31
MNP: Another lever for new entrants?.................................................................34
International MNP experience: Key takeaways.....................................................37
MNP implementation in Pakistan: A case study ..................................................38
MVNOs and spectrum sharing ............................................................................39
But incumbency benefits strong; consolidation imminent....................................40
Competitive Pressure: Not over yet....................................................................43
3G: All eyes on spectrum ...................................................................................50
International experience with 3G.........................................................................52
Telecom Towers: Improving economics.............................................................56
Indian tower industry landscape...........................................................................56
New telecom players to drive tenancy rates ..........................................................57
Valuing tower assets; EV of Rs480bn for Indus by 2010E....................................59
Internet: Huge untapped potential ....................................................................64
Companies.........................................................................................................67
Bharti Airtel......................................................................................................... 68
Reliance Comm. .................................................................................................. 98
Idea Cellular ...................................................................................................... 124
Vodafone Essar .................................................................................................. 138
BSNL ................................................................................................................ 139
Tata Teleservices ((TTSL).................................................................................. 140
MTNL .............................................................................................................. 141
Aircel ................................................................................................................. 142
Loop Telecom ................................................................................................... 143
Unitech Wireless................................................................................................ 144
Sistema Shyam Tele-Services (SSTL) ................................................................. 145
Swan Telecom (renamed Etisalat DB Telecom) ................................................. 146
Datacom Solutions ............................................................................................ 147
S Tel.................................................................................................................. 148