Telecom_Sector by huanghengdong

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									                                                                  Sector Report
                                                                                           Mideast Research Team

GSM Subscriber market share


                Oct’09     Nov’09      Dec’09    Jan’10    Feb’10      Mar’10        Apr’10
Bharti
Airtel             31.8        31.5      31.2      30.9       30.6        30.3            30.2
Vodafone
                   24.1        24.1      24.0      23.9       23.9        23.9            24.0
Essar
BSNL               15.2        15.0      15.0      15.1       15.0        15.0            15.0
IDEA               15.0        15.2      15.1      15.2       15.3        15.1            15.1
Aircel
                    7.8         8.0        8.2       8.4       8.6          8.7             8.9
Cellular Ltd
Reliance
                    4.1         4.3        4.1       4.0       3.9          3.9             3.8
Telecom
MTNL               1.2         1.2        1.2       1.2       1.2          1.1             1.1
BPL Mobile         0.7         0.7        0.7       0.7       0.7          0.7             0.7
Others*            2.0         1.9        2.3       2.6       2.9          3.1             3.2
Total            100.0       100.0      100.0     100.0     100.0        100.0           100.0


BWA Auction – Positive for Government

Withstanding the success of auction of 3G spectrum, the government got an overwhelming response
for the BWA spectrum, as well. After 16 days and 117 rounds of bidding, auction of BWA spectrum
finally ended and the government would garner ~Rs 12848 crore from the auction of pan-India
spectrum. The pan India bid amount closed at 7.3x the base price of Rs 1750 crore for pan India
spectrum. Infotel Broadband Services Private Limited was the only pan India (22 circles) bidder,
Aircel won 8 circles, while Bharti and Qualcomm won 4 circles each, Tikona Digital won 5 circles and
Augere (Mauritius) just won 1 circle. Nonetheless, it would put immense pressure on the financials of
all the companies as revenue from BWA is at least a year away as the companies would be able to
roll out services in a progressive manner after 4-6 months of allotment of spectrum, which is due in
September 2010. From the auction of BWA spectrum, the government is expected
to garner close to Rs 38543 crore. Out of the total collection, ~Rs 12846 crore would be borne by
state run operators, BSNL and MTNL. The government is expected to generate ~Rs 106343 crore
from auction of both 3G and BWA spectrum.

Mukesh Ambani back in telecom with a bang

Mukesh Ambani is back in telecom, and with a bang. Reliance Industries has bought 95% stake in
Infotel Broadband. Infotel had bid the most in the broadband wireless access (BWA) spectrum
auctions and secured 20 MHz of spectrum in every single one of India’s 22 telecom circle, RIL now
controls more spectrum than any of the established telecom player. RIL will pay Rs 4800 crore for
95% stake Infotel and BWA spectrum cost of Rs 12848 core as part of the capex plans drawn for the
company.




Head Office : 144, Atlanta, Nariman Point, Mumbai 400 021, India - Tel : 91 22 22841198 - 22832949
Corporate Office : 2nd Floor Star House, Dr. R. K.Singh Marg, Andheri (E), Mumbai 400 069
Tel: 91 22 28240444 – 28395667 - Website : www.mideastportfolio.com
Email : mail@mideastportfolio.com - pms@mideastportfolio.com
                                                                  Sector Report
                                                                                           Mideast Research Team

Debt-laden RCom plans to de-merge its tower business

Reliance Communications' (RCom) plan to open up its tower infrastructure unit to investors. Primarily
it aims to cut its huge debt in a fiercely competitive market. Last week, RCom, controlled by
billionaire Anil Ambani, unveiled plans to sell up to a 26 per cent stake in itself, after India sold
licences for 3G wireless services at a price far higher than expected.

As reported in Economic times, Anil Ambani controlled Reliance Infratel has all but approved a
complicated merger deal that could see its tower assets combine with smaller rival GTL
Infrastructure in exchange for Rs 15,000 crore in cash and a significant stake in a new entity for
shareholders of its parent company. Anil Ambani, who owns 67% of RCOM, will keep 26% of the
combined entity while GTL Infrastructure promoter Manoj Tirodkar is expected to control 30%. The
other shareholders of RCOM will receive 24% in the new tower company created by the transaction
while the rest will be held by GTL Infrastructure shareholders. RCOM could get Rs 15,000-crore cash
and its shareholders will get a 50% stake in the new combine entity.

Videocon in talks with Korea's SK Telecom for offloading 26% stake

Videocon Telecommunications has started talks with Korea’s Sun Kyung (SK) Telecom to sell a 26%
stake, the latest attempt by it to bring-in foreign partner for its fledgling mobile phone services. The
founding Dhoot family wants Rs 3,600 crore from the sale, valuing Videocon Telecommunications at
a little over Rs 13,000 crore ($3 billion).
Videocon Telecommunications has also been linked to a buyout by Mukesh Ambani’s Reliance
Industries, whose board is believed to have recently authorised its re-entry into the telecoms space
following the peace deal between the Ambani brothers.

As per the management, the company is evaluating proposals from global communications firms for
a strategic partnership.

Qualcomm plans to divest over 50% in BWA venture

Qualcomm, the US-based chipmaker, plans to divest over 50 per cent stake in its broadband wireless
venture. Initially, it will divest 26 per cent stake and in the second phase, it will look at diluting
another 26 per cent with a local or a foreign partner. The first deal is likely to be finalized within a
month. Qualcomm won broadband wireless access (BWA) spectrum in four circles, including Delhi
and Mumbai. The company, which also bagged the Haryana and Kerala circles, would pay Rs
4,912.54 crore by June 22 for BWA spectrum.




Head Office : 144, Atlanta, Nariman Point, Mumbai 400 021, India - Tel : 91 22 22841198 - 22832949
Corporate Office : 2nd Floor Star House, Dr. R. K.Singh Marg, Andheri (E), Mumbai 400 069
Tel: 91 22 28240444 – 28395667 - Website : www.mideastportfolio.com
Email : mail@mideastportfolio.com - pms@mideastportfolio.com

								
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