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【出版时间及名称】：2010年4月印度电信行业研究报告
【作者】：AVENDUS证券
【文件格式】：pdf
【页数】：26
【目录或简介】：
Incumbency may confer a strategic advantage in the 3G auctions
because of the infrastructure, customers and cash flows of the large
companies. All the winners in 3G may find reasons to observe price
discipline and tone down the tariff war. Another force that may end
the tariff war would be exhaustion of spectrum with new operators
after Mar11. Number portability may act differently in India because
the forces triggered by it in other parts of the world have existed here
for some time; portability may actually be good for incumbents.
Underperformance of telecom stocks for five quarters suggests that 3G
and the tariff war are priced in. However, a rebound may not be round
the corner due to the risks to FY11f earnings. We initiate coverage on
BHARTI (Hold), IDEA (Add) and RCOM (Hold).
Incumbents hold the edge in 3G auctions
The strategic advantage of large incumbents arises from their infrastructure,
customer relationships and cash flows. Winners could quickly lift quality of
service in 2G. Later, they could tap the high‐ARPU segments to identify
customers for 3G offerings. A potential positive spin‐off from the 3G auctions is
the return of pricing discipline. Incumbents with a superior quality would not
need to resort to aggressive pricing. A new provider who wins a 3G license may
only obtain funding with covenants that prescribe superior returns on capital.
Tariff war could end after Mar11
Aside from the influence of 3G a potential inflection point may emerge after
Mar11 when new operators begin to exhaust their spectrum. Exhaustion of
spectrum with large incumbents since 2007 had slowed the decline in tariffs.
However, the tariff war resumed in 2009 because new entrants used the
pricing tool to grab incremental market share. We believe the situation in FY11
would be similar to that in 2008 with a high probability of bottoming out of
tariffs.
MNP may add little to the high ambient competition in India
Global precedents indicate that onset of portability leads to high churn rates,
loss of market share by incumbents and a cut in ARPU. Much of these effects
have been present in India for 5 quarters. Portability may be favorable to
incumbents in India due to extensive network coverage, distribution reach,
customer service and brand.
Near‐term downside risk to earnings may delay a re‐rating
Across the globe, winners in 3G auctions had seen consequent erosion in
market value. In India this phase may be over. Underperformance of telecom
stocks to the Nifty after Dec08 correlates with concerns over 3G and the tariff
war. Yet, stocks may not rebound soon as net profits for FY11f face potential
downside arising from the persistence of low tariffs and the possible rise in
financing costs. FY12 may have more positives such as the likely return of price
discipline and payback in some projects where investments were made till
FY10. We initiate coverage on BHARTI (Hold), IDEA (Add) and RCOM (Hold).
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