>Indian Telecom Sector : GSM Operators (Circle wise wireless (GSM) subscriber numbers as at the end of Jan 2012)

Key Highlights
■ The GSM operators added 8.44 mn new subscribers in January 2012, taking the total GSM user base to 648.08 mn in the country, according to the COAI data. During the previous month the subscriber addition was 7.55 mn.


■ Uninor added the most 2.49 mn subscribers in January 2012 taking its total subscriber base to 38.80 mn; on the other hand Idea Cellular added 1.75 mn new subscribers during the month to take its total subscriber base to 108.13 mn.


■ Bharti added 1.3 mn subscribers, taking its total subscriber base to 176.95 mn users. The GSM subscriber market share of the company dropped marginally to 27.30% in January 2012
compared to 27.46% in December 2011.


■ Vodafone Essar added 8.6 lakh users in January 2011 against 9.1 lakh addition in December 2011 to take the company's total subscriber base to 148.60 mn. The market share of the company dropped to 22.93% in January 2012 from 23.10% in the previous month.


■ Aircel added 8.2 lakh new customers during January 2012 compared to 6.9 lakh in December 2011 while Videocon added 4.1 lakh customers taking its subscriber base to 5.85 mn.


■ The subscribers from the 'B' and 'C' circle constituted 54% of the total GSM subscriber base in India. Both these category circles put together witnessed 4.69 mn subscriber additions during the month of January 2012 as compared to the previous month.


■ The 'Metro' and 'A' circles added 3.76 mn subscribers during the month constituting 44% of the total subscriber net addition.


■ Idea Cellular, Uninor and Videocon gained subscriber market share by 5 bps, 31 bps and 5 bps respectively during January 2012 to take their respective GSM subscriber market share to 16.68%, 5.99% and 0.9% respectively.


■ The industry is set to witness significant change in the months ahead following the recent license cancellation order by the Supreme Court. The Supreme Court recently cancelled 122 2G licenses of many operators granted during 2008 by the former telecom minister A Raja.


■ Incumbents continue to face huge regulatory uncertainty pertaining to the one time excess spectrum charges that the incumbents have to pay for spectrum they hold in excess of 6.2 MHz in each circles, legal validity of the 3G roaming agreement that the incumbents have entered among themselves for offering 3G services in circles where they do not have the required license and spectrum (issue is pending with TDSAT for final hearing) and various other issue. 


■ Despite such extreme regulatory uncertainty and flip-flop we are positive on the operational performance of the mobile operators under our coverage (Bharti Airtel and Idea Cellular). Maintain our 'Buy' rating on both Bharti Airtel and Idea Cellular with the target price of Rs 495 and Rs 133 respectively.

Circle wise wireless (GSM) subscriber numbers as at the end of Jan 2012
RISH TRADER