New Market Report: India Telecommunications Report Q1 2014

The Indian telecommunications market has experienced a considerable number of challenges in the last few years due to constant regulatory disputes and a hostile business environment, which includes an aggressive price war that has eroded operators' profitability. Despite the country's significant growth potential, the industry is struggling to capitalise on the opportunities, which will remain the central theme in the near future as we do not expect the market to reach a swift resolution of these complicated issues.

Key Data

* In September 2013, the Indian mobile subscriber base fell back slightly relative to the previous quarter, although the overall momentum over the year to date has been positive, and we envisage a rise to 876mn subscribers by the end of 2013.
* We continue to expect ARPU levels to trend higher due to 3G and value-added services, although we highlight the fact that the industry is prone to downside risks such as aggressive price competition, with a number of key operators having recently slashed their 2G data charges.
* Looking longer term, the government's recent move to allow foreign operators to have a stake of up to 100% in local telecom companies is likely to result in the injection of much-needed funds to roll out the nation's 3G network infrastructure.
* We forecast slow but steady fixed broadband subscriber growth as operators and consumers opt for cheaper and more convenient mobile solutions.

Full Report Details at
- http://www.fastmr.com/prod/754550_india_telecommunications_report_q1_2014.aspx?afid=301

Risk/Reward Ratings

India is in 13th position in BMI's Asia Pacific Telecoms Risk/Reward Ratings, with a Telecoms Rating score of 46.5 in Q413.

Key Trends And Developments

In July 2013, the Indian government lifted the 74% foreign direct investment (FDI) cap in the telecoms sector, allowing foreign investors to increase their stake to a full 100%. Although this is likely to help stimulate a process of industry consolidation, BMI expects that the process will not begin in earnest until the TRAI issues new M&A guidelines for the sector. Up until now, consolidation has been hampered by the 2G concession cancellations and uncertain acquisition rules.

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