The Senior Analyst Jan. 2014 | Page 32

THE SENIOR ANALYST Jan 2014 Bharti Airtel is a part of Telecom sector. The sector is facing several significant issues, some due to competitors and some due to government regulations. However, Indian market is still nascent in terms of highly technological advancements as experienced by western world. With advent of technology, the sector will only grow further and will be driving the GDP. As of now, the telecom sector contributes 3% ($ 52bn) of overall Indian GDP. The important policies which will impact the sector are unified licence, spectrum sharing, free roaming, MNP. Niche companies such as Comviva are going to be the face of service providers, understanding subscribers’ requirements and providing customized services. Also, the equipment manufacturing sector has still not developed and its growth will complement the telecom service industry. 6. With interest rate being high, as most telecom companies are high on debt, the interest expense is quite high, and borrowing has been reduced. 1. The licenses will be up for renewal in November 2014, where to retain some of the licenses, they will have to pay a hefty sum, or give up licenses and start bidding from the base price. Recent News: 2. The government disallowing sharing of 3G roaming, has affected the number of consumers using the VAS, as the companies have limited circles in which they can operate. 3. There is a proposal to refarm the 900MHz band to 1800 MHz band, and if the companies want to remain in the 900 MHz band, they will have to pay retention fee, which is very large. 4. Govern