2013-10-08 11:40:02 - New Fixed Networks market report from Business Monitor International: "India Telecommunications Report Q4 2013"
The Indian telecommunications market has experienced a considerable number of challenges in the last few years due to constant regulatory disputes and a hostile business environment, which includes an aggressive price war that has eroded operators' profitability. Despite the country's significant growth potential, the industry is struggling to capitalise on the opportunities, which will remain the central theme in the near future as we do not expect the market to reach a swift resolution of these complicated issues.
* By March 2013 the Indian mobile subscriber base was back on a gradual upward trend. By end-2013, we envisage 891mn subscribers.
* We continue to expect ARPU levels to trend higher due to 3G and value-added services, although we highlight
the fact that the industry is prone to downside risks such as aggressive price competition, with a number of key operators having recently slashed their 2G data charges (see below).
* Looking longer term, proposed legislation to allow foreign operators to have up to 100% stake in local telecom companies would inject much-needed funds to rollout the nation's 3G network infrastructure.
* We forecast slow but steady fixed broadband subscriber growth as operators and consumers opt for cheaper and more convenient mobile solutions.
Full Report Details at
- www.fastmr.com/prod/689031_india_telecommunications_report_q4_20 ..
India is in 13th position in BMI's Asia Pacific Telecoms Risk/Reward Ratings, with a Telecoms Rating score of 46.5 in Q413.
Key Trends And Developments
In June 2013, Vodafone India announced an initiative to cut its 2G data charges by 80% as part of a broader strategy to accelerate mobile internet adoption, consumption and value addition. The company clearly hopes the move will lead to further rapid growth in revenue from browsing-related data services - its fastest area of growth in FY2013 - and this additional revenue could be used to finance its heavy investments in infrastructure and spectrum.
Later the same month, Bharti Airtel and IDEA Cellular followed Vodafone India's lead by drastically reducing 2G mobile data rates in a bid to encourage more consumers to use premium non-voice services.
Both companies claim that greater affordability, combined with the growing ubiquity of wireless dataenabled devices such as smartphones and tablets, will usher in a new wave of mobile data growth.
Mukesh Ambani has announced that he aims to spend INR130bn (US$2.28bn) on rolling out a 4G LTE network as part of ambitious plans for his Reliance Jio Infocomm telecoms operations that include tripling the headcount at the company and the recent signing of a deal with Reliance Communications.
In July 2013, India's Telecom Commission backed a new proposal to allow foreign operators to have up to 100% stake in local telecom companies. At present, foreign direct investment (FDI) in the sector is limited to 74% of an Indian operator.
In July 2013, it was reported that Vodafone India had offered to pay INR40bn (US$680mn) to extend the commercial lives of its operating licences covering the metropolitan circles of Delhi, Mumbai and Kolkata. The 20-year licences, which expire in November 2014, were to have been auctioned but attracted no bids. Although the offer is 1.3 times that of the prevailing market value for 1800MHz spectrum, it is as much as 70% lower than the reserve prices that had been set in the aborted auction. The move - which centres around some of the most valuable spectrum real estate in India - could be mimicked by other operators and could conspire to force down the value of spectrum outside the auction room.
Also In July 2013, it was reported that India's Telecom Commission had approved the use of Universal Service Obligation Fund (USOF) to expand mobile phone coverage in rural areas.
From our perspective, it is becoming increasingly clear the Indian economy is entering the early stages of a cyclical growth bounce on the back of the ongoing easing by the central bank and a slowly improving external demand picture (among other factors). Recent economic data continue to provide scope for cautious optimism regarding the economy's near-term prospects. Having said that, the massive amount of uncertainty fomented by the country's dogged structural twin deficits suggests to us that any cyclical bounce is likely to be capped. As such, we have downgraded our FY2013/14 and FY2014/15 real GDP growth forecasts to 5.5% and 6.0%, from 6.2% and 6.7%, respectively.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.