- Management said that the reserve price for 5G auction is still high from TRAI and they are disappointed.
- Direct to home (DTH) is facing headwinds due to excessive regulation by TRAI, although new consultation paper has been laid out by TRAI.
- Due to semiconductor chip shortages, upgrades from 2G to 4G have taken a back seat. Cost of smart phones has increased due to the shortages and hence the affordability of the phones. But this is a temporary phase as highlighted by management. Also, OEMs are more focussed on high end phones as compared to low end smart phones.
- 5G is less than 4% of the total smart-phones in India. Expected to around 14-15% by FY24. Hence, in the initial phase i.e. 1 to 1.5 years accelerated roll-out of 5G doesn’t make economic sense. Also, the 5G use-cases developed across various industries even at the global level is low and hence, as and when the market evolves the company will roll- out its 5G strategy.
- Energy costs are a headwind for the company.
- ARPU post-paid to pre-paid is 1.7:1 today. Less than 4% of the bills are post-paid. Hence, it is a huge opportunity to grow.
- B2B business segment apart from networking, other areas like IOT, CPaaS, Cybersecurity, datacentre are growing from 20-50% range. Networking is also growing but at a slower rate as compared to other areas. Company is gaining market share across the domains in B2B segment. The B2B area is Rs 70,000 huge market with half of it comprising of Networking and rest are CPaaS, IOT, Cybersecurity, datacentre, etc. Connectivity in enterprise area market share is nearly 30% of Airtel. Airtel can grow and can gain the market share in this area as currently it has low revenues accruing from this field.
- Digital areas don’t need capex, largely driven by talent.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks or MF.
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Yadnya Academy Pvt. Ltd. (InvestYadnya) is registered with SEBI under SEBI (Research Analyst) Regulations, 2014 with registration no. INH000008349. Disclosure with regard to ownership and material conflicts of interest
1. Neither Research Analyst nor the entity nor his associates or relatives have any financial interest in the subject Company;
2. Neither Research Analyst nor the entity nor its associates or relatives have actual / beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report or date of public appearance;
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