reports
- Chris Hoare
Global EM Telcos & Towers Bull market continues – NSR GEM Top-10 June...
It was another very strong month for our picks as the EM Telco bull market continues. As we have been arguing for some time EM Telco is a much better space than it used to be, and the market has now started to understand this. This note also includes key news & other thoughts, to try to help investors generate alpha within the EM Telco space.
- Chris Hoare
Global EM Telcos Capex in steep decline; underpins EFCF growth
We analyze the capex history & outlook for Global EM Telcos. For this group capex is falling rapidly (-12% in 2024 in US$) as competitive intensity improves and markets consolidate. Excluding China and India, EM Telco capex is already down 23% from peak.
- Chris Hoare
Vodafone Idea (Neutral, TP: INR 10, +20%) Government to more than dou...
Over the weekend, Vodafone Idea announced that the government will more than double their equity stake to 48.99% from 22.6% through the conversion of INR 369.5bn (US$ 4.3bn) in spectrum dues. As of this writing, the stock spiked up by 19% today. Further to what we had previously written on the nationalisation of Vodafone Idea, we lay out our initial thoughts below.
- Chris Hoare
Indian Telcos Q3 FY25 review: Sustained margin expansion from July’s ...
Trends continued to benefit from last July’s tariff hike with sustained margin expansion across all three operators. Capex intensity is expected to moderate further for Bharti as network build decelerates, whereas VIL would accelerate its spending on the back of its 5G launch in March. India’s FWA development remains promising, with potential positive implications on EM Telcos
- Chris Hoare
Indian Telcos & Towers News reports that the Indian government may vo...
Indian press is reporting that the Indian government is planning to cut AGR liabilities for the industry by around INR 1 trn (c. $12bn), by cutting 50% of interest and 100% of penalties and interest on penalties relating to the AGR fines. Implication would be a c. INR 520bn (US$ 6.2bn) reduction in liabilities for Vodafone IDEA and around INR 380bn (US $4.5bn) for Bharti.
- Chris Hoare
Indian Telcos & Towers What to expect in 2025: FWA S-curve enables mo...
FWA will likely be the key themes of 2025 in Indian Telcos we think, with the market likely to be delivering 5m+ quarterly net adds by the end of the year. This is likely to drive renewed optimism towards Bharti and enable Jio to IPO. Given Jio’s valuation of approaching $200bn if it happens this is likely to be one of the biggest events in Global Telecoms this year. On rolling forward our DCF our Indus pt rises to INR 325 and we lift our recommendation to Neutral, and stay Buyers of both Bharti...
- Chris Hoare
- Chris Hoare
- Chris Hoare
Indian Telcos Rumours that Middle East Sovereign Wealth Funds are bid...
Various Middle Eastern Newspapers have reported that both QIA and ADIA are in early stage talks to buy the Indian Govt’s stake in VIL. We see this as a bearish development for the other Indian telcos, and potentially for VIL too.
- Chris Hoare
Indian Telcos Q1 FY25 review: Slower mobile with modest rise in margi...
Indian mobile revenue rose steadily despite slowing this quarter due to softer ARPU trend. Both Bharti and Jio continue to take share from Vodafone Idea again. Mobile EBITDA kept ahead of topline with all three seeing YoY improvements in margin. Overall, Bharti remained ahead on both metrics.
- Chris Hoare
- Chris Hoare
Indian Mobile Bharti follows Jio with price hikes, but perhaps not as...
Bharti has immediately followed Jio's price hike announcement, with an announcement that it is set to raise its mobile prices by between 10% and 21%. We calculate the average increase is slightly lower than Jio. The change would be effective from 3rd July too which means the full impact of the tariff hike would only be felt from Q3 FY25.
- Chris Hoare
Indian Mobile Price hikes priced in?
Jio leads India's first mobile hike since December 2021; we expect peers to follow. The announcement was made after the conclusion of the spectrum auction where Jio only participated modestly. This is thus structurally positive. However, that both Bharti and VIL are trading down on this news is indicative of how much good news is already priced into Indian mobile. Our thoughts below.
- Chris Hoare
Indian Mobile India's auction concludes - Our final thoughts
India's spectrum auction concluded yesterday with 141.4 MHz of airwaves being sold across the 900 MHz, 1800 MHz, 2100 MHz and 2500 MHz band for INR 113 bn (US$ 1.36bn). Our proprietary spectrum analytics tool (SpectrumHub) suggests that prices paid were largely in line with the reserve prices, and close to our original expectations.
- Chris Hoare
Indian Mobile Indian Spectrum Auction – Day 1 results confirm modest ...
After further ado, India entered its 10th spectrum auction yesterday with 10,523 MHz of airwaves worth INR 963bn (US$ 11.3 bn), at reserve prices. While Jio has no renewals until 2030, both Bharti and Vodafone Idea have some of their 900 MHz and 1800 MHz band up for renewals this year, in six and two circles respectively. Preliminary analysis suggests that bidding will take on a modest tone unlike in 2022, as validated by Day 1's results, and as we expected. Our thoughts below.
- Chris Hoare
Indian Mobile VIL Capital Increase – should you participate and what ...
Sometimes the markets behave in ways that appear irrational. VIL having sufficient market cap to launch an INR 200bn ($2.4bn) capital increase despite (in our view) being a failing business is one example. But what does it mean for Bharti, Jio and Indus?
- Chris Hoare
- Chris Hoare
Vodafone IDEA (Reduce, TP: INR 5, -63%) Vodafone Idea approves USD 2....
Yesterday, Vodafone Idea's board approved INR 200bn (USD 2.4bn) in equity raise to fund its 4G expansion and 5G rollout. After the equity raise, the company then wants to attempt to raise a further c. INR 250bn in debt. In aggregate, therefore the company is hoping to raise INR 450bn (USD 5.4bn). Even if successful (we are sceptical), we do not think this is enough. Shares were down sharply by 14% today. Our thoughts below.
- Chris Hoare
- Chris Hoare
Indus Towers (Neutral, pt INR 265, +18%) AMT sells Indian Towers - Im...
American Tower ("AMT") has agreed to sell its Indian Towers business, ATC India, to an affiliate of Brookfield Asset Management, with the deal expected to close in 2H 2024. The transaction values the Indian business at US$ 2 bn which implies a 5.6x EV/EBITDA, 17% above Indus’ trading multiple, but in line with our target multiple.
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