Convergence Plus
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Friday, January 24, 2020
Amazon, Flipkart Bring Diwali Spirit to Republic Day Sales

There will be no change in pricing and discount strategy of cos despite Goyal’s recent remarks. Amazon and Walmart-owned Flipkart have assured brands that there will be no change in the pricing and discount strategy on their ecommerce marketplaces and it will be business as usual during the sales that started on Sunday, said people with knowledge of the matter.

Discounts during the ongoing Republic Day and Great Indian sales on Flipkart and Amazon, respectively, will be similar to that last year, said five senior executives of leading online-focussed brands. In some categories such as televisions and discounts, they could be as steep as Diwali discounts, they added. Brick-and-mortar traders said they will approach the government afresh with complaints about deep discounting by the marketplaces.

Commerce and industry minister Piyush Goyal had reiterated last week that ecommerce marketplaces are welcome to invest in India but have to comply with the laws, which aim to ensure that small retailers are not hurt by unfair cashrich ecommerce companies. The Competition Commission of India (CCI) has also initiated an inquiry against the online marketplaces over discounting and preferential treatment of vendors. Small traders accuse the marketplaces of breaking overseas investment rules and engaging in predatory pricing.

“Discounts are happening just as planned,” said the chief of a leading shoe and sportswear brand. “The product and pricing strategy is planned a quarter in advance and alpha sellers and marketplaces have indicated nothing changes for this quarter.”

Amazon and Flipkart didn’t respond to queries. They have always maintained that they follow the local rules.

The executives of the brands said the marketplaces made it amply clear in this regard that any discounts will have to be borne by the brand or the seller. Also, marketplaces and large sellers have said even

f a product is sold at its lowest price, there should be at least 10%-plus margin for all three combined — brand, seller and marketplace. Both Amazon and Flipkart are working on a margin-based strategy where brands offer the discount, while the marketplace supports them on visibility and a stronger digital presence, said Avneet Singh Marwah, CEO of Super Plastronics, which sells Kodak and Thomson televisions online.

Brands said the margin they had offered to sellers in 2019 has gone up by 7-10% from 2018, indicating the average discount in 2019 has been lower after stricter ecommerce rules came into effect in February, requiring marketplaces and some top sellers to change their business structures.

Except for a few sale seasons such as Navratri, Diwali, Republic Day and Independence Day, the average online discount dropped last year after the government issued the ecommerce norms.

Brands and sellers are trying to keep prices attractive for customers and ensuring business is profitable for everyone, said Manmohan Ganesh, chief operating officer at online exclusive brand BPL.

However, offline retail lobbies such as the Confederation of All India Traders (CAIT) and All India Mobile Retailers Association (AIMRA) reiterated their stand against the ecommerce marketplaces.

There is a 5-15% discount on smartphones in the current sales on Amazon and Flipkart, including bank instant discounts or cashback, said AIMRA president Arvinder Khurana.

“Even brands have continued to offer special pricing and exclusive models to the marketplaces. We will approach the CCI to prove that money is burnt in online,” he said.

CAIT secretary general Praveen Khandelwal said the association had met Goyal on Saturday and apprised him of the factual position.

The head of a leading smartphone brand there is no law that prohibits brands, online sellers or offline retailers from offering discounts.(Source: Economic Times)


Telcos Starved for Funds, Your Mobile Bill may Rise Up to 30%

Low average revenue per user, impending AGR dues payouts likely to force cos to hike tariffs

The country’s billionplus mobile users may have to brace for more sharp jumps in phone bills by end-2020 itself with telcos likely to raise prices by another 25-30% with average revenue per user (ARPU) still low and overall telecom-related consumer spends in India amongst the lowest globally, industry executives and analysts said.

Vodafone Idea and Bharti Airtel, staring at huge payouts after they got no relief from the Supreme Court on their adjusted gross revenue (AGR) dues, would need to raise prices in a bid to rebuild financial strength. And, if Vodafone Idea were to collapse, as feared by some, analysts expect big price hikes from Bharti Airtel and Reliance Jio Infocomm in a private duopoly structure.

“With Arpus still well below the ₹180-200 pre-Jio levels and a reduction in overall telecom-related consumer spending (as a percentage of GDP) over the past three years, there’s adequate scope for telcos to raise tariffs by another 30% later this year,” Sanjiv Bhasin, director at IIFL Securities, told ET.

Analysts expect private telcos to leverage the fall in consumer-level telecom spends to 0.73% of GDP in the September quarter of FY20 from 1.25% just over three years ago, saying the scenario offers adequate headroom to push through a second round of price hikes.

Just over a month ago, Bharti Airtel, Vodafone Idea and Reliance Jio had increased bundled prepaid tariffs by 14-33% for the first time in three years. That is estimated to boost monthly APRU from the present ₹120 level to around ₹160, over a few quarters. But with Vodafone Idea’s survival now in the balance if it fails to also secure any meaningful relief from the government, analysts expect the tariff hikes to happen quicker. “Even after the recent tariff hike (in December 2019), consumers are still paying a paltry 0.86% of per capita income for their communication needs, which is much lower than what it was four years ago,” said Rajan Mathews, director general of Cellular Operators Association of India (COAI), which represents Airtel, Jio and Vodafone Idea.

Analysts said consumer spends on communications in India are well below Singapore, Malaysia, China/Hong Kong, the Philippines, Japan, Australia, the US, the UK, Germany and France.

Given that mobile internet consumption has soared over the past three years since Jio’s entry, mobile users, Bhasin said, also “won’t mind paying a little extra as data is now the new gold”.

Kotak Institutional Equities said that aggregate annualised consumer-level telecom spends for the September 2019 quarter at ₹1.45 lakh crore was 21% below June 2016 levels of ₹1.84 lakh crore. It added that during the same period, the telecom industry’s “voice traffic was up 2.1x times and data traffic 43x since Jio’s entry”.

Experts say the actual timing of the next round of price hikes will hinge on Vodafone Idea’s survival. The struggling telco has said it is exploring further options, including filing of a curative petition in the top court.

Vodafone Idea faces AGR dues of ₹53,039 crore in the aftermath of the Supreme Court’s October 24 order, and its subsequent rejection of the telco’s review petition. It needs to pay the government by January 23. The nation’s top court has backed the government’s wider definition of AGR.

Rajiv Sharma, research head at SBICap Securities, though said any upward revision in tariffs beyond 15% in the next 6-to-9 months could lead to some user losses, given that half of India’s population have an annual income level under ₹60,000 as per recent findings of the World Inequality Database.(Source: Economic Times)

How a ₹40,000 crore IPO could have spared BSNL its current troubles

The death warrant of Bharat Sanchar Nigam Ltd (BSNL) was signed nearly a decade ago when the government of the day, the Congress-led UPA, did not push for the company’s proposed Rs 40,000 crore initial public offer (IPO). Had the IPO happened, the company would have been saved of the predicament that it has to go through currently, experts in India’s stock market told BusinessLine.

BSNL, which was India’s largest telecom operator in 2008, purely failed as it could not upgrade its technology to retain customers, and lost to the competition from private companies Bharti Airtel and Vodafone. The money that it could have raised from the IPO would have helped it retain the top position, as it would have been able to compete, experts say.

In 2006-07, BSNL’s total income stood at around Rs 40,000 crore, with profits after tax of Rs 8,000 crore. At the end of 2007, BSNL’s value was nearly pegged at Rs 4,00,000 crore. Comparatively, Bharti Airtel’s market capitalisation then was Rs 1,70,000 crore and that of Reliance Communications Rs 1,60,000 crore.

While private sector companies keep raising money via various instruments, BSNL was choked for funds. From 2007-08 onwards, the PSU’s profits first started falling, and two years later, it turned into losses.

In the financial year ended March 2012, BSNL’s post-tax losses almost touched Rs 9,000 crore, with its income also falling below Rs 28,000 crore, a 30 per cent decline over that in 2006-07.

In January 2008, the then BSNL chairman Kuldeep Goyal told a business newspaper, “An IPO may be necessary in the medium term to finance our massive expansion plans. After all, BSNL has already lined up a capex of around Rs 60,000 crore till 2010, of which Rs 18,000 crore will be invested in 2008-09. Its reserves stand at Rs 30,000 crore till date. Incidentally, it is not expecting a quantum jump in revenue due to fall in number of fixed lines and falling tariff.”

BSNL IPO plans put off

In September 2010, the Telecom Department (DoT) told a parliamentary committee, which scrutinises the accounts of the government and state-owned companies, that BSNL’s listing will be taken up only after the company’s performance improves in order to get the right valuation. This killed all the hope for India’s largest telecom operator, brokers say.

The fact that the government should sell 30 per cent stake in BSNL through an IPO and also raise funds from the sale of its infrastructure, such as signal towers and real estate, was suggested by a panel, whose members included banker Deepak Parekh.

In July 2010, the Telecom Commission, the highest decision-making body of the DoT, that had met to clear the IPO, but shied away from taking any decision.

Also read: At final call, around 92,700 BSNL, MTNL staffers opt for VRS

Just last month, the government has now approved a Rs 69,000 crore revival package for BSNL and MTNL — this includes merging the two loss-making firms, monetising their assets and giving VRS to employees — so that the combined entity turns profitable in two years. The package includes infusion of Rs 20,140 crore for purchase of 4G spectrum and Rs 3,674 crore for GST to be paid on spectrum allocation. (Source: The Hindu Businessline)

Realme sells 15 million handsets in first year of operations

The Chinese handset makers hopes to double its sales in 2020. Chinese handset maker Realme has become the fastest-growing smartphone brand in India, selling 15 million handsets in the very first year of its operations and is targeting to double the sales next year, its Chief Executive Officer (CEO) Madhav Sheth said.

Realme, which began as an Oppo sub-brand in May 2018, was promptly spun off into a standalone entity and is now taking on bigger rival Xiaomi with similar price points and segments of Rs 7,000-20,000 phones.

Unlike other Chinese players like Vivo and Oppo, which are offline-focussed with investments in channel marketing and offline distribution, Realme aped the strategy of the market leader closely and focussed on online from the start.

Sheth, who founded the company together with BBK Group, said Realme is ranked seventh fastest growing smartphone brand globally.

“We will end 2019, the first full year of our operations, with sales of 15 million handsets. We are targeting to at least double this in 2020,” he told PTI here.

The brand commands 14.3 per cent market share, he said quoting industry data by IDC.

Realme has now risen to become the fourth biggest smartphone brand in India in the third quarter, according to IDC. Its popularity exploded on the same lines as Xiaomi, which has been selling its phones in the country since 2015, by offering a good price-to-quality ratio on its smartphones.

According to IDC, Xiaomi is the market leader with 27.1 per cent share followed by Samsung (18.9 per cent) and Vivo (15.2 per cent) in the third quarter.

Realme had 3.1 per cent market share in the third quarter of 2018.

Starting from India, today Realme is present in 20 markets including China, Southeast Asia, Russia, Europe, he said.

“We have sold 5.2 million smartphones during Diwali month alone,” Sheth said.

According to Counterpoint Research, Realme shipped 10 million smartphones in third quarter of 2019, an 808 per cent year-on-year growth in shipments. Phones like the Realme C2, Realme 3i and Realme 5 were among the company’s best-selling models during the festive season sales.

Counterpoint report says the company now ranks seventh in the global smartphone market.

Sheth said the company plans to roll out an offline-only series for India which will be named by the end of this year. Aimed at the mid-premium range, the new series will focus more on all-rounder user experiences such as a better battery, touch, and feel (aesthetics).

“We are lining up with more smart accessories with great performance and trendy design. Realme will become a tech lifestyle brand in 2020,” he said.

Realme has 4 successful product line-ups in India: C series, Number series, Pro series, and X series.

Realme maintains a very strong presence online and is already the number 1 brand on Flipkart and number 2 overall. The brand is also expanding its presence in offline markets.

It is targeting 30 per cent sales from offline and 70 per cent from online, he said.

BBK Electronics also owns Vivo and Oppo smartphone brands.

He said Realme is already an independent entity.

“We wanted to clarify that Realme Mobile Telecommunications Private Ltd is already an independent brand and legal entity,” he said adding the brand was set up by him and founder Sky Li on May 4, 2018.

BBK holds majority stake and he has a minority interest in the firm, Sheth said without giving details. (Source: The Hindu Businessline)


Cloudconnect: - In India’s Newly Hyperconnected, Mobile-First World, Businesses

CloudConnect: - In India’s newly hyperconnected, mobile-first world, businesses need to move beyond the limitations and cost-inefficiencies of traditional Business Communication Systems. CloudConnect Communication Pvt. Ltd. is India’s first DOT-licensed and regulation-compliant fully-operated and managed cloud-based voice platform that’s remarkably feature-rich, flexible, and easy-to-use, ensuring better productivity and business continuity, no matter how business is spread.

With CloudConnect Small and Medium Businesses gain access to 21st-century enterprise communication systems such as PBX on Mobile, which is a first in India, it also offers a range of services including Business Phone Solutions, Unified Communications, and Customised Business Communication Solutions. Keeping in mind the modern workforce, multiple offices, flexible-working, hot-desking and working from home, CloudConnect gives Indian SMBs access to Fortune 500 features with their Business Communication App so mobile workers have never-before access to all the same business features, across devices, and locations, across single and multiple offices. This ensures business communication never stops and, staff, productivity, and profits aren't tied to their desks and business continues as usual even across remote locations. This empowers teams to securely communicate faster, reduce downtime, and collaborate smarter with much-needed flexible features that work at any location, any time, on any device. This helps businesses to reduce the cost and management hassles of expensive on-premises hardware.

India’s most comprehensive and secure Business Communication Suite:- CloudConnect is hosted in India’s premier Tier-4 data center, ensuring all data is secure.CloudConnect is Simple, Scalable and Seamless. The product and development teams have ensured an easy-to-install, easy-to-maintain, easy-to-use system that can manage multiple locations with multi-office centralized PBX through a single integrated platform for Voice, Video, Data Sharing, and Office automation.

CloudConnect integrates Business Communication channels, networks, systems, IT business and, consumer applications and devices all delivered through the cloud, on mobile. Customized solutions such as teleconsultation, Hosted IVR, PBX on Mobile, Unified Communications, HD audio & video, broadcast, and geo-location will enable Indian SMBs and Startups in industries like Healthcare, Education, Real-estate, Manufacturing, Sales & Marketing, Logistics, and Technology to thrive.

CloudConnect has a team that has deep expertise in the technology and telecom sector, lead by Gokul Tandan, together with seasoned industry veterans with decades of leadership in their respective industries.

Headquartered in Delhi, CloudConnect was started in 2017 with an aim to bridge the gap and address the immediate the need for businesses in India’s new digital economy to be agile, responsive, to provide next-generation customer experience, and digitally transform their business. With CloudConnect, businesses are now powered by a faster system of communication that enables their teams to drive up productivity with smarter, mobile-first audio, and video collaboration tools, amongst a host of features that will help a business communicate faster, and collaborate smarter on any device, anytime, anywhere.

Within a short span of time from its inception CloudConnect has an ever-growing clientele of businesses who were looking for the right partner to help orchestrate complete digital transformation. For Delhi-based Roam1, CloudConnect’s Cloud Telephony services provided a one-stop, fully functional, advanced enterprise communication solution that replaced their costly traditional telephone carriers and PBX systems eliminating the need to buy expensive on-premise PBX and giving them full functionality on any mobile device. Additionally, CloudConnect’s analytics on their platform made it far easier for Roam1 to collect comprehensive data, improving the scope for analysis so they can continuously improve their business. (Source: Convergence Plus)

ITU to Debate Telcos’ Usage of 5G Band

Spectrum regulators at the Geneva-based International Telecom Union (ITU) are set to debate today a proposal from the telecom department, backed by the Indian Space Research Organisation (ISRO), to slash the transmission capability of mobile base stations operating in the coveted 26 GHz millimetre wave spectrum band – widely considered among the most efficient airwaves for ultra-fast 5G services.

The national space agency has convinced the Department of Telecommunications (DoT) to push for a sharp cut in the transmission power of mobile base stations operating in this core 5G band to a measly 0.5 watts, which is an 80th of the standard 40 watts radiated by normal base stations, according to people aware of the matter.

The reason, they said, is that ISRO wants a small chunk of about 10% of the 26 GHz spectrum band for satellite services and wants zero interference from 5G mobile networks using the same airwaves in future.

The matter is likely to be debated at the ITU meeting where India’s position on 5G spectrum bands and technology conditions will be thrashed out. After this, it will be discussed at the ITU’s World Radio Communications-2019 conference in Egypt, starting October 28, where regulators are meeting to finalise the rules of operating 5G globally in various spectrum bands, including 26 GHz.

The development has triggered a sense of disbelief in the telecom industry, with experts saying the proposed restriction in the transmission power of mobile base stations would destroy 5G business case for India in 26 GHz band as financially stressed telcos would be forced to make investments in thousands of additional base stations to maintain basic 5G coverage, a scenario that would sharply increase 5G roll-out costs and make services unaffordable for the consumer.

“The Department of Space does not have any specific comments to offer at this stage on this subject,” an ISRO spokesman said in a written response to ET’s queries. Queries to telecom secretary Anshu Prakash remained unanswered till press time on Sunday. (Source: Economic Times)

Indian IT Services Firms See No Big Blowback from Brexit

Firms expect business to be as usual, with Europe and UK firms still looking to outsource tech. Indian IT services providers are unlikely to be negatively impacted by Britain’s decision to leave the European Union, commonly referred to as Brexit, as they are seeing steady growth in the UK and European markets.

“It is unlikely to have a negative impact on Indian tech because the UK will want to create new partnerships,” said Sangeeta Gupta, senior vice-president, Nasscom, the IT services industry lobby.

Some of the large IT services companies have seen faster growth in the UK and Europe than from their traditional US market in the past four-five quarters. Companies expect business to be as usual, and some regions in Europe and the UK are still picking up outsourcing of technology services, said Kuldeep Koul, lead analyst at ICICI Securities.

The UK government last Thursday clinched a last-minute deal with the European Union to exit. But the Boris Johnson-led British government has to get Parliament approval for the same, for which it has reportedly sought an extension till October 31.

Large tech services firms are keenly watching the situation, but companies such as WNS seem confident about their deal pipeline and automation-focused projects in the region. “Whilst for some, exposure to the UK economy looks like a risk to the business, WNS’s management is adamant that the UK pipeline remains very strong with clients firmly committed to existing plans,” Tech Market Review wrote in a report.

“Perhaps, we shouldn’t be surprised, indeed, many of WNS’s services are of course counter cyclical – not just traditional BPO cost-cutting but automation and procurement services are all very attractive in environments when “pennies have to be counted” and efficiencies gained," it said. The report also pointed out that, "WNS must continue to push on its automation drive but remains a business in good shape with strong visibility to double-digit organic growth.” The IT services sector is, however, a little cautious about delays in decision making.

“...there will be some industry or companies who do not know whether there’s going to be a deal or no-deal Brexit, so they do not know what will happen to their market. So, they may have taken a pause on some discretionary expenses; then there is going to be some impact,” said Koul of ICICI Securities. Gupta of Nasscom said that "the uncertainty and how it prolonging is what would be worrisome".

As per Gupta, business is now continuing for IT firms, but faster decisions would help the sector focus. For example, she said, some banks, which are clients of IT firms, may have to shift headquarters from the UK to Europe or vice versa, post-Brexit. (Source: Economic Times)

Road to 5G: Top 3 Telcos Look to Spend Over $30 b to Step Up Infra

Jio & Airtel, with their strong balance sheets, poised to gain from fibre backhaul: Experts. India’s top three telecom operators are looking at a collective capital expenditure of a shade over $30 billion (₹2.1 lakh crore) on base stations and fibre infrastructure alone for rolling out ultra-fast fifthgeneration or 5G mobile networks, said analysts.

Bharti Airtel and Vodafone Idea, they said, would require to spend $10 billion capex each over the next five years, while Reliance Jio Infocommm’s incremental 5G capex outgo is estimated lower at around $8 billion as the Mukesh Ambani-led operator already has more 5G-ready fiberised towers than the incumbents, having already spent around $2 billion on tower fiberisation.

Analysts were, however, sceptical about Vodafone Idea’s ability to afford such big-ticket capex spends given its continuing market share losses and weak financials, which they said could choke its 5G play.

They also said the need for a dense site footprint and fibre backhaul in 5G would shift the balance of power towards larger and integrated operators with strong balance sheets like Jio and Airtel, while those with high gearing levels are at risk given the sustained high capex needs.

“Airtel and Vodafone Idea will each need to spend $2 billion annually on 5G radio and fibre capex spread across 5 years,” UBS said in a report, implying 65% and 85% of Airtel’s and Vodafone Idea’s current annual India capex run rates respectively.

By contrast, Jio’s 5G capex, it said, “would be lower due to its larger tower footprint and higher proportion of towers on fibre backhaul compared with Airtel and Vodafone Idea”. The brokerage also expects Jio to transition to 5G in a “time-efficient manner”, given its in-house data centres and investments in a content distribution network (CDN).

Analysts questioned lossmaking Vodafone Idea’s ability to make high 5G capex investments, though, as it is expected to continue losing market share as network integration and delayed 4G roll-outs have weakened its competitive position.

“Vodafone Idea’s stretched balance sheet will limit its participation in the 5G opportunity, and the company will require a significant improvement in network quality to arrest market share loss and revert to revenue growth,” UBS said in a note seen by ET.

Credit Suisse backed the view, saying, “Vodafone Idea will lose the most market share, and will need additional equity capital by FY21, given our expectation of no price increase”.

ET’s queries to Vodafone Idea, Bharti Airtel and Jio remained unanswered till press time.

UBS estimates that Airtel’s India mobile revenue will grow 5-6% in this financial year and the next even if interconnect usage charges – a source of revenue for incumbents – get scrapped from January 2020.

However, according to analysts, the telecom sector can reduce overall estimated $30.5 billion 5G capex spends by 15-20% if Airtel, Vodafone Idea and Jio share towers and fibre resources.

The Department of Telecommunications is keen to hold the next spectrum sale latest by January 2020.
Credit Suisse doesn’t expect the 5G spectrum sale to attract much interest, though, owing to a mix of “high reserve prices, telcos’ focus on monetising 4G investments, stretched balance sheets, a nascent 5G ecosystem and lack of significant 5G use cases for mass consumption”. (Source: Economic Times)

Airtel Expects to Cross 35% Revenue Mkt Share in 3 Qtrs

Telecom market has consolidated, co beginning to grow revenues: CEO Vittal. The war for subscribers in India’s telecom market is at a “decisive” phase, Gopal Vittal, Bharti Airtel CEO for India and South Asia, said, adding that the telco will target crossing the 35% revenue market share mark in three quarters, by “attacking” the weak spots of rivals Reliance Jio and Vodafone Idea.

“We are now at a decisive phase in the war for customers in telecom… The market has consolidated. It is of course still brutally competitive but at the same time it is now settling. We are beginning to grow our revenues,” Vittal said in a recent communication to employees, available exclusively with ET.

“This is our time to lead the agenda and target a dramatic increase in our market share. The next two to three quarters must see us get well past 35% revenue market share,” Vittal told his staff of over 16,000 employees, spanning across mobile, homes and enterprise.

He added that the telco’s current RMS at 31.4% has been steady for the last six months, but that the mobile phone company should focus on two critical parameters — net 4G additions, or adding data users who generate higher revenue, and improving average revenue per user (ARPU) — in a bid to grow RMS. India’s carriers have been in the midst of a bloody price war since the entry of Reliance Jio in September 2016, which has triggered a rapid consolidation, shrinking the market to just three private sector players from eight, including a merger of the second and third largest carriers — Vodafone India and Idea Cellular, now called Vodafone Idea. In the process, Airtel’s subscriber base is down to over 281 million at the end of June from nearly 345 million a year back.

Hit by competitive intensity, Airtel’s India mobile business has been making losses for a few quarters now, but its revenue has started to grow, albeit slowly, over the last two quarters, helped by expansion in its ARPU, which in turn was mainly driven by the company getting rid of low-ARPU or inactive users. Airtel India’s mobile business churn — or the number of users leaving the network in a month — increased to 2.6% in the April-June quarter from 2% a year back, but improved from 2.8% in the previous three months ended March.

“I want every one of you (employees) to be paranoid about winning back customers we have lost and attacking the vulnerable spots where our competitors are weak,” the chief executive said, adding that there needs to be “razor sharp” focus on the subscriber churn by addressing complaints aggressively.

Analysts expect Vodafone Idea to be an easier target given its financial issues and ongoing service disruptions due to network integration, compared with Jio, which still maintains its aggressive pricing in a bid to target 500 million customers and is already the leader by RMS and subscribers.

“We expect Jio’s revenue market share to increase to around 44% by FY22E from 28% in FY19 while that of Vodafone Idea to decline to around 24% by FY22E from around 34% in FY19. We expect Bharti Airtel’s market share to remain largely stable at around 29%,” Swiss brokerage firm Credit Suisse said in a note to clients.

Brokerage CLSA underlined the criticality of adding 4G subscribers that will be key to the recovery of ARPU for all carriers.

“Over the past six months, Bharti Airtel has stepped up its 4G roll out, which has resulted in 31% incremental market share in new 4G users, which is 10 percentage points higher than its 21% share among 4G smartphone subscribers,” CLSA said.

Airtel Expects 35% Market Share
The brokerage added that it has a positive outlook for Jio and Airtel, but was concerned about Vodafone Idea’s “out-of-control” debt to equity ratio. Vittal though is aware of the challenges at hand, which include a gap in the telco’s rural coverage, which he said needs to be covered through a cost-sensitive model. The company leads in three markets (Delhi, Andhra Pradesh and Karnataka), is No. 2 in 11 and third ranked in the rest. To win share in challenger markets “will require rigorous de-averaging down to a tehsil, street, outlet and customer level,” Vittal said. He added that the telco needs to raise its digital efforts in a bid to have 100 million monthly customers on its digital assets. (Source: Economic Times)

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