Telecom- GSM net subscriber additions dip again

Angel Broking has come out with its report on telecom space. The research firm is Neutral on telecom sector.

"Cellular Operators Association of India (COAI) reported GSM subscriber data for August 2011. GSM subscriber net addition data continued its declining trend during this month as well and was reported to be weak on mom basis across all telecom operators (except Idea). Net subscriber addition number stood at merely 5.3mn (almost at all-time low), down by whopping 30% mom, taking the total GSM subscriber base to 611.8mn subscribers in August 2011."

"Weakness across the board Net addition run rate on mom basis for all operators (except Idea) dropped off steeply (Refer Exhibit: 5 and 6) in August 2011. Among the incumbents, Bharti and Vodafone reported a significant decline in their net subscriber addition numbers, with net addition numbers dropping to merely 1.2mn and 1.1mn, down 23.8% and 24.0% mom, respectively. BSNL, which was bucking the declining trend since the last two months, reported a significant decline in net subscriber addition in August 2011 to only 0.4mn from 1.8mn in July 2011. Idea emerged as the dark horse by reporting net subscriber addition of whopping 2.3mn as against 1.0mn in July 2011, up 132% mom, which led to a 30bp mom increase in its subscriber market share to 16.1%. Subscriber market share of Bharti and Vodafone remained stable mom at 28.1% and 23.6%, respectively; however, market share of BSNL declined by 10bp to 14.8%. Among new operators, Videocon and S Tel reported a net decline of 0.65mn and 0.1mn subscribers in their subscriber base, respectively. Net subscriber addition of Uninor declined by 67.0% mom, as it added merely 0.3mn subscribers. Subscriber market share of all new operators remained flat on mom basis, expect for Videocon, which reported a 20bp decline in its subscriber market share to 1.0% because of net reduction of 0.65mn subscribers in its subscriber base."

"For Bharti, such a decline in net subscriber additions was along expected lines, thus our estimates remain unchanged. However, Idea

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