India’s telecom industry continue to grow in the HSD, with Bharti and Jio improving at the expense of VIL. Industry ARPU tracked MSD again even without any meaningful tariff hikes; we expect increases to be put through in 2H CY24 though that has largely been priced in. EBITDA continue to trend ahead of topline, with YoY margins improvement across the board. Earlier last month, the government also approved the auction for 10,523 MHz of spectrum which starts from INR 963bn (USD 11.6bn). However, w...
Following a very strong H2 2023, Bharti has retraced nearly INR 100/share. We remain bullish and would see the sell-down as a buying opportunity. Consensus forecasts continue to look too low to us; in this note we focus on the consumer margin, which we think is likely to surprise to the upside.
Excluding the Naira devaluation impact, Bharti Airtel reported in-line results for its Indian businesses, with sustained margin expansion again. Indian mobile performance remained strong, with ARPU and revenue growth ahead of peers ahead. Trends also remained strong for Home Services, with Digital TV seeing a nice acceleration post the inflection last quarter.
This is the 3rd in a series of notes looking at FWA (see HERE and HERE). Like us, the market appears to be getting more bullish on FWA in EM, and a series of events such as Jio’s launch suggest FWA could be a significant use case for 5G in Emerging Markets.
India’s telecom industry continue to grow in the HSD, with Bharti outperforming on mobile service revenue growth on a YoY basis again. Whilst Jio posted better net additions, its ARPU trend was softer. Bharti’s Enterprise business did slow down however, largely a function of the deferred spending by global OTT players driven by current global macro.
EM Telcos top line growth slowed somewhat in Q2 again driven by a slower quarter in China. However, other markets stayed strong and simple average revenue growth was 8.5%. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates, as they have been now for 3 years. With the rates cycle seemingly peaking, macro headwinds may also start to improve, and we continue to believe that EM Telcos are still not in our view priced for mid-term GDP+ growth, and rising returns.
India’s telecom industry maintained a healthy growth in Q1, with Bharti outperforming on mobile service revenue growth, supported by a better ARPU trend relative to peers. Whilst Jio posted better net additions, its ARPU trend was softer. The impact from the Jio Bharat (low priced smartphone and a cheaper plan) which was introduced in July remains to be seen, however we estimated the impact to be minimal to Bharti but material to VIL given its higher mix of featurephone users
For 15 years, EM Telcos were engaged in a war for market share, with price the primary weapon. But peace is now breaking out globally. Mobile prices are rising across global EM (India, Brazil, Indonesia, Thailand among others). In this note, we analyze which markets have the greatest potential for recovery, based on 3 criteria: affordability, market structure and challenger returns.
Bharti’s share price has recovered largely we think on lower capex guidance, with the company indicating that 5G capex in India has already peaked. Our thesis is that while growth on consumer is likely to be held back by a lack of price increases ahead of the election, Enterprise is now big enough to drive growth itself we think.
Dialog Axiata, Axiata Group and Bharti Airtel have entered into a binding agreement to merge Dialog Axiata with Bharti Airtel Lanka, a wholly-owned subsidiary of Bharti Airtel. In exchange, Bharti Airtel will receive a stake (likely small) in Dialog through the issuance of new Dialog shares.
EM Telcos continue to grow ahead of expectations as a group, and remain resilient to inflationary cost pressures on consumers, with growth in Q4 remaining strong for the leading telcos we track. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates.
India’s telecom fundamentals remained healthy in Q3, despite the slowdown in service revenue as the effect of last year’s price increase lapsed. EBITDA trend improved again, while capex intensity is expected to stay elevated to support 5G and rural rollout.
Bharti has performed extremely well over the last 2 years. While we remain bullish, we think that some of the near term upside is priced in, especially on the consumer mobile side. We stay bullish long term but having had a good run into the end of the year, we expect the stock to take a breather in the near term.
Enterprise remains as the fastest driver for most EM Telcos and is set to exceed expectations based on our view that Enterprise penetration is following an S-curve. For nascent markets (India, Latam, Thailand), acceleration is the theme; while more mature markets like China are still riding on the double-digit trend. We see China as the leading indicator as to how Enterprise revenue might trend for EM telcos. In this note, we pull together actual Enterprise revenue trends as reported by EM Telco...
Given we have tracked a significant number of spectrum auctions over the years, we were able to have a good sense of how spectrum costs (on per MHz.pop basis) have trended over the years. In this short note, which is a spin-off of our more in-depth work on ROIC (Alongside better growth, ROIC is trending higher for EM Telcos), we show that spectrum costs have been declining over time in the EM Telco space.
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