Jio ARPU likely to fall for seventh consecutive quarter: Infographic

Reliance Jio Infocomm’s average revenue per user (ARPU), a key performance metric, is likely to continue falling for the seventh successive quarter

Reliance Jio Infocomm’s average revenue per user (ARPU), a key performance metric, is likely to continue falling for the seventh successive quarter as the Mukesh Ambani-led telco is still largely adding low-value customers, analysts said. But brokerages expect Jio to report its eighth successive quarterly profit in the July-September period, propelled by sustained, strong customer growth, and also benefit from the recent cut in corporate tax. Bharti Airtel and Vodafone Idea, by contrast, are likely to continue posting losses. Jio kicks off the earnings season for the fiscal second quarter, reporting on October 18. Airtel reports on October 29, while Voda Idea reports next month, though it’s yet to finalise the date.

Original story: https://telecom.economictimes.indiatimes.com/news/jio-arpu-likely-to-fall-for-seventh-consecutive-quarter-infographic/71642406

Arqiva reaches agreement to sell its Telecoms division to Cellnex for £2.0bn

Transaction includes c.7,400 sites and the right to market c.900 sites spread across the UK

  • Arqiva’s Telecoms division supports UK MNOs in delivering and extending nationwide mobile coverage, as well as the rollout out of 5G technology and small-cells
  • Majority of sale proceeds to be used for debt reduction, strengthening Arqiva’s capital structure and further securing the long-term sustainability of Arqiva’s broadcast infrastructure business
  • Remaining Arqiva broadcast and distribution business will continue to play a key role in underpinning UK digital TV and radio services investment

UK, London, 08 October 2019: Arqiva Group Limited (Arqiva), the leading UK communications infrastructure company, today announces that it has reached an agreement with Cellnex for the sale of its telecoms infrastructure and related assets at an enterprise value of £2.0bn.

The transaction comprises c.7,400 of Arqiva’s cellular sites, including masts and towers as well as urban rooftop sites, and the right to market a further c.900 sites across the UK.

Cellnex is a significant pan-European tower operator with sites in the UK, Ireland, Spain, Italy, France, Switzerland and the Netherlands. The acquisition continues Cellnex’s investment in the UK and follows their previously announced long-term strategic agreement with BT in June 2019, whereby Cellnex obtained the rights to operate and market 220 high towers located throughout the UK.

The Arqiva telecoms division serves all four UK mobile network operators individually, as well as holding contracts with the two joint ventures they operate between them (Cornerstone (CTIL) and MBNL). Arqiva’s towers operate on a neutral host basis.

Arqiva’s remaining broadcast infrastructure business sits at the heart of digital broadcasting in the UK. It leads in the provision of end-to-end network solutions for TV and radio customers, international content owners and data network providers, with around 1,500 broadcast transmission sites in the UK and five award-winning teleports. It also retains its interests in machine-to-machine data services which provide highly secure smart meter networks for the utilities sector.

The majority of the sale proceeds will be used to pay down debt in Arqiva’s capital structure, securing the long-term sustainability and financial security of the UK’s broadcast infrastructure.

Simon Beresford-Wylie, CEO of Arqiva, said:

“This agreement provides both stability and a focus for our future as we concentrate on the provision of broadcast infrastructure, end-to-end networks and connectivity solutions for our TV and radio customers, international content owners, data network providers and utilities.

“The majority of proceeds from the sale will be used to reduce debt, thereby providing a solid financial base for Arqiva and its shareholders to invest in the future of the UK’s terrestrial TV and radio platforms as well as its data networks and capability.

“The deal will see a number of colleagues transfer to Cellnex, which I am confident will be an excellent owner for the business. I am sure that it will continue to go from strength to strength under their stewardship.”

Tobias Martinez, CEO of Cellnex, said:

“The Arqiva Telecoms division acquisition is a key milestone for Cellnex. Its strong UK asset-base, revenues and financial profile, combined with its long history at the heart of UK digital infrastructure, make it a perfect addition to our operations. This deal will not only add c.8,300 telecom sites to our portfolio but an experienced team that will further strengthen Cellnex’s demonstrated ability to meet its customers requirement.

“I look forward to working with the Arqiva Telecoms division team, in order to continue to run the business successfully, assuming new challenges together within the Cellnex project.

“The UK has always been a core component of our inorganic expansion plans. This agreement further demonstrates our commitment and confidence in the UK market as we look ahead to further opportunities.

“It provides a significant opportunity for the development of a mobile network fit to match the country’s ambitions. We are ideally placed to bring our operational expertise and innovative approach to bear in a context where the Government and regulators are looking to encourage greater connectivity for all citizens and businesses through network development.”

The transaction has been approved by the boards of Arqiva and Cellnex and is expected to close during H2 2020, subject to clearance from the regulatory authorities.

Lazard is acting as sole financial advisor to Arqiva in connection with the transaction.

Active infrastructure sharing to reduce capex, opex: Telecom regulator

The Department of Telecommunications (DoT) has recently sent out various references to the regulator, seeking its recommendations, to set the National Digital Communications Policy (NDCP) 2018 into action.

NEW DELHI: The Telecom Regulatory Authority of India (Trai) believes that increasing the scope of infrastructure providers, aimed at unbundling of infrastructure from services, would reduce capital and operational outlay of stressed telos, and eventually lead to ease of doing business.

“Services and infrastructure will be unbundled, and it would ultimately become infrastructure as a service (IaaS) for telecom carriers, and they can easily share networks and reduce capital (capex) and operational expenditure (opex),” Trai chairman Ram Sewak Sharma told ETT.

Industry estimates suggest a savings of upto 40% on capital expense by telecom service providers, following the regulator’s move.

In August this year, the sector regulator has came out with a consultation paper aimed at reviewing the scope of infrastructure providers, or IP-I entities, which provide towers on rent or sale to licensed telcos, and other assets such as dark fibre and duct space. Currently, these companies are not allowed to own and share active infrastructure but can only deploy it on behalf of telcos. But Trai is exploring whether they can, going forward, offer active infrastructure such as common antenna, feeder cable, radio access network (RAN), and transmission systems.

The watchdog’s new consultation is, however, in line with the recently-unveiled a national policy that envisages enhancing the scope of telecom infrastructure companies with a view to promote and incentivise the deployment of common shareable passive as well as active infrastructure.

Sharma said that the regulator wanted to further promote infrastructure sharing so that the cost could be lowered as service providers already outsource network maintenance.

“This (scope enhancement) will make sharing of infrastructure and other resources easier, and would ultimately lead to ease of doing business,” the top official added.

Delhi-based Tower and Infrastructure Providers Association (Taipa) that represents telecom infrastructure firms in the country, said that the regulator’s move was much needed, and active and passive infrastructure sharing would bring multiple benefits to the financially-stressed industry.

Sectoral debt has presently mounted to more than Rs 7 lakh, and has lately reduced to a three private-player market following the billionaire Mukesh Ambani-owned newcomer Reliance Jio’s disruptive foray in 2016.

“The move if allowed will reduce capital and operational expenditure, allow faster time to roll out services, provide energy efficiencies and reduces entry barriers,” Taipa director general Tilak Raj Dua said.

The regulator has said that the definition of infrastructure is based upon enumeration about active and passive elements which on a larger perspective becomes less relevant while only services and infrastructure remain critical segments in today’s age of convergence.

The Department of Telecommunications (DoT) has recently sent out various references to the regulator, seeking its recommendations, to set the National Digital Communications Policy (NDCP) 2018 into action.

“Telecom department has sent a number of references, including augmentation of fiberisation in the country essentially with a view of making policy goals operational,” Sharma said and added that the regulator would soon come out with the consultation process on each of them.

Original article: https://telecom.economictimes.indiatimes.com/news/unbundling-infrastructure-to-reduce-capex-opex-for-telcos-trai/70945092

TIM and Vodafone confirm Italian tower deal

Telecom Italia (TIM) and Vodafone Italy have signed an agreement to combine their respective mobile tower networks within TIM’s INWIT tower division. Both firms will hold 37.5% stakes in the enlarged INWIT, which will control more than 22,000 tower sites. Following on from their signing of a 5G infrastructure partnership in February this year, TIM and Vodafone plan to expand their passive network sharing arrangement and also share active 4G networks. Both companies say the arrangement will help them cut debt, with TIM expecting a benefit of up to EUR1.4 billion (USD1.56 billion) over time.

Luigi Gubitosi, CEO of TIM, said: ‘Completion of this transaction is key for the country’s infrastructure and technological development and will enable us to further accelerate the deployment of 5G, with Italy already among the countries taking a lead in trials of this new technology.’ Meanwhile, Aldo Bisio, CEO of Vodafone Italia, commented: ‘This agreement will enable us to step up the rollout of 5G for the benefit of our customers and the community as a whole … Network sharing reaps the benefits of 5G and at the same time reduces the impact on the environment and lowers rollout costs, allowing more investment in services for customers.’

Original article:
https://www.telegeography.com/products/commsupdate/articles/2019/07/29/tim-and-vodafone-confirm-italian-tower-deal/

Reliance Jio becomes India’s number one mobile operator

Less than three years after launching Reliance Jio has overtaken Vodafone Idea and Bharti Airtel to become India’s biggest MNO by subscriber.

Jio announced it had hit 331 subscribers last week as part of its quarterly numbers announcement but, according to Ovum’s WCIS, that would still have left it just behind the recently combined Vodafone Idea group if the latter had even held onto its existing punters. Jio overtook long time Indian market leader Bharti Airtel in the first quarter of this year.

Vodafone Idea announced its own numbers late last week and they revealed that it continues to haemorrhage subscribers. “Our subscriber base declined to 320.0 million from 334.1 million in Q4FY19 primarily due to customer churn following the introduction of ‘service validity vouchers’ in the prior quarters,” opened the ‘operational highlights’ section of the report.

“We are delivering on our stated strategy although the benefits are not yet visible in our top line,” said Vodafone Idea CEO Balesh Sharma. “We remain focused on expanding our 4G coverage to over a billion Indians as well as expanding our data capacities by adding more sites on TDD and deploying Massive MIMO. We are well on track to deliver our synergy targets by Q1FY21. We expect these factors to increasingly contribute to our financial performance going forward.”

Returning to the WCIS numbers, the total number of mobile subscribers hasn’t increased that much in the three years that Jio has been operating, which means the third of a billion customers it now has have been largely taken from the incumbents. There has been a fair bit of consolidation, so it’s hard to make like-for-like comparisons, but it looks like Jio largely took subscribers from the smaller players initially, but in the past year has been hoovering up tens of millions of subscribers from its two big rivals.

Competition is obviously a good thing but if this trend continues Jio could become dangerously dominant in India and the country’s regulators and politicians may live to regret making it so easy for the country’s richest person to get off to such a flying start. The genie is out of the bottle now, though, and it’s hard to see how Vodafone Idea and Bharti Airtel are going to regain the initiative.

Original story: http://telecoms.com/498742/reliance-jio-becomes-indias-number-one-mobile-operator/

Bimal Dayal to lead merged entity of Indus Towers, Bharti Infratel

NEW DELHI: Bharti Airtel Ltd and Vodafone Group Plc on Tuesday announced that Bimal Dayal, who is currently chief executive officer, Indus Towers and Hemant Ruia, currently chief financial officer, Indus Towers, will be appointed as CEO and CFO, respectively, of the merged entity of Indus Towers and Bharti Infratel.

Dayal, who had joined Indus Towers as its chief operating officer in 2010, will now be responsible for the combined business and will take forward integration of the two companies in preparation of the merger. He has previously worked with Ericsson and Qualcomm.

Prior to his role at Indus, Ruia previously worked as chief financial officer at Reliance Retail.

The companies did not divulge details of other leadership roles. The existing leadership teams of both Indus Towers and Bharti Infratel will continue to manage their respective businesses till the merger becomes effective, Bharti Airtel said in a statement.

The two tower companies had in April last year agreed to merge their businesses to create the world’s largest tower company outside China. The combined entity will own more than 163,000 towers, second only to China Tower. The merged company will be listed on the stock exchanges as Bharti Infratel is a publicly traded company. Its nearest rival in India will be ATC which has 78,000 towers.

The merger is at an advanced stage of completion and is expected to be closed by June. It will help Bharti Airtel and Vodafone Group to sell their stake, bring down debt and invest in their wireless operations in India, which has been facing the heat of a tariff war started with the entry of Reliance Jio in September 2016.

Bharti Infratel and Vodafone Group own 42% each in Indus Towers, while Vodafone Idea, the merged entity of Idea Cellular and Vodafone India, holds 11.15%. The remaining 4.85% is held by private equity firm Providence.

Once the merger is completed, Airtel, which currently owns 53.5% stake in Bharti Infratel, will hold between 33.8% and 37.2% in the merged entity, while Vodafone Group will own between 26.7% and 29.4%. Airtel and Vodafone Group will have equal rights in the merged entity.

As part of the proposed merger, Vodafone Idea has the option to either sell its 11.15% stake in Indus Towers or get a 7.1% stake in the combined company if Providence also opts to receive new shares in exchange for its shareholding in Indus Towers.

Providence has the option of choosing cash or shares for 3.35% of its 4.85% shareholding in Indus Towers, with the balance exchanged for shares.

Axiata, Telenor talk massive merger

Telenor and Axiata Group opened talks about a potential non-cash merger of their telecom and infrastructure assets in Asia, in which the Norway-based operator would take a majority stake.

Based on equity value, Telenor would own 56.5 per cent of the merged company, with Malaysia-headquartered Axiata taking the remaining 43.5 per cent.

In separate statements, the companies acknowledged discussions are preliminary and subject to adjustments and due diligence. While they emphasised there is no certainty of an agreement, if a deal can be struck, they aim to complete in Q3.

Any transaction would be subject to approval by shareholders, receipt of regulatory approvals and other customary terms and conditions.

The merged company, to be headquartered in Kuala Lumpur, would have operations in nine countries, nearly 300 million customers, and about 60,000 towers across Asia, making it one of Asia’s largest mobile infrastructure companies.

Telenor’s Asian footprint includes operations in Thailand; Malaysia; Bangladesh; Pakistan; and Myanmar. Axiata has operating companies in Malaysia; Bangladesh; Cambodia; Nepal; Sri Lanka; and Indonesia; along with tower business edotco.

Axiata would continue to run Bangladesh mobile unit Robi.

New listing

The companies plan to list the entity on an international stock exchange, as well as Bursa Malaysia.

In Malaysia, they intend to merge Celcom Axiata and Digi, with the new company the majority owner in the combined business.

Sigve Brekke, president and CEO of Telenor, said “considerable synergies” would be created through the “scale and competence” achieved by the merger: Telenor cited a preliminary estimate of $5 billion in this regard.

Axiata president and CEO Jamaludin Ibrahim, said: “With the dynamic combination of breadth, experience and knowledge of Asia’s two regional champions…we bring the best of Asian and European cultures”.

“Leveraging on the synergies of our combined assets, organisations, talents, best practices, scale and financial firepower, we would create the largest telecom operator in the region. Additionally, we would also intend to create the largest mobile operator in Malaysia, one of the largest towercos in the world and the largest innovation centre in the region.”

The companies also plan to establish an R&D centre in Malaysia to develop technologies including 5G, IoT and AI.

Citi is Telenor’s financial adviser, while Axiata retained Morgan Stanley to work on the proposed transaction.

Original story: https://www.mobileworldlive.com/featured-content/home-banner/axiata-telenor-talk-massive-merger/

Reliance Jio overtakes Airtel to become India’s No.2 telecom

Nearly two-and-a-half years after launching mobile phone services, Mukesh Ambani’s Reliance Jio has overtaken Bharti Airtel’s subscriber base to emerge as the second-largest telecom company in the country.

Jio, which has a customer base of 30.6 crore, now trails only Vodafone-Idea. Airtel has 28.4 crore subscribers while Vodafone-Idea had announced that it had 38.7 crore subscribers in December 2018.
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Airtel’s numbers were confirmed by a company spokesperson after TOI sent a query on Tuesday evening.

A telecom industry analyst said that the pace of growth of Jio’s subscriber additions may see the company overtake Vodafone-Idea in the coming quarters. “Vodafone-Idea is the most vulnerable of the three private players in the market, and it may just be a matter of few more quarters, may be three-four, before it is overtaken by Jio,” the analyst said, requesting anonymity as he advises many telecom companies.

For Sunil Mittal’s Airtel, which dominated the Indian telecom space for almost two decades, the fall has been dramatic – it used to be the market leader till the middle of last year before being edged out by the new entity that formed after the merger of Vodafone India and Idea Cellular.

The meteoric growth in Jio’s business since it launched services in September 2016 has been fuelled by aggressive and dirt-cheap consumer tariff plans with the company launching operations with free voice call facility.

“The remarkable growth of Jio has been unprecedented and the company is expected to dominate the customer acquisition space through aggressive and innovative tariff plans, including bundling of content packages,” said Mohan Shukla, CEO of FinXPros, a consultancy firm.

Jio has been adding subscribers at breakneck speed at a time when Airtel and Vodafone-Idea have been weeding out low-paying users. According to a report by JP Morgan, Jio added 2.7 crore new customers between January and March 2019, after logging in 12 crore new members through 2018.

Importantly, the company continues to lead the data space through its 4G-only business, and is actively scouting for more customers with cut-throat tariffs. “… we see no prospects of a tariff hike in FY2019-20, unless Jio’s net-additions (of subscribers) come down,” JM Financial said in a just-released report.

Jio’s aggressive entry into the telecom business – in Mukesh Ambani’s second avatar in the mobile space – had unshackled the financials of the industry completely. Airtel, which had initially accused Jio of engaging in “predatory pricing” to gain market share, has seen its domestic operations slip into losses, while Vodafone India and Idea were forced to strike synergies and lower operating costs.

Jio, however, continues to be profitable in its operations and also had the highest adjusted gross revenue (AGR) in access services amongst all the telecom companies in the December quarter. While Jio’s AGR was Rs 9,482 crore, Vodafone-Idea was at Rs 7,224 crore and Airtel at Rs 6,440 crore, according to a report released by telecom regulator Trai.
Top CommentVodafone is robbing Indians for years. Glad that Jio is gaining ground in India! good prices, good service. Way better than all of its competitors. Abhishek Das
Ambani had made it clear from the very beginning that his business would not be a pure-play mobile telecom company, but would aim at creating a digital eco-system that – among other areas — would focus on high-speed internet, news and entertainment content, movies, music, chat, and financial transactions.

Jio has been the strongest in terms of bagging internet customers, especially as it also offers mobile handsets bundled with its services. In 2018, Jio captured 60% share of new 4G subscribers, and accounted for 65% of industry 4G customers as of end December 2018. Further, it carried 70% of 4G data traffic in 2018, and 61% of overall data traffic.

Bharti Airtel to sell off stake in Infratel

Airtel will reduce its stake in the towers business, in order to free up cash for its 5G network rollout
Indian mobile network operator, Bharti Airtel, is to lower its stake in towers firm, Bharti Infratel, downgrading its stock holding from 50.33 per cent to just 18.33 per cent.

Markets reacted positively to the news, with Bharti Airtel’s share price surging 15 per cent since news of the divestment broke, two days ago.

A statement released by Bharti Infratel said that the transaction was expected to take place on or after the 18th March 2019.

The stake will be purchased by Airtel’s subsidiary, Nettle Infrastructure Investments.

With Indian telcos desperately trying to mitigate costs and free up cash for their impending 5G rollouts, Airtel has announced a series of cost saving strategies in recent months.

Earlier this month, Airtel announced that it was considering launching a joint venture with the newly formed Vodafone Idea, to oversee the company’s FTTH and fibre backhaul offering.

India’s telecoms sector remains one of the most competitive in the world, with operators trading on wafer thin margins.

Original story:

https://www.totaltele.com/502438/Bharti-Airtel-to-sell-off-stake-in-Infratel

Airtel, Vodafone-Idea fibre JV a business opportunity for PE funds

The firms would want to demerge their fibre assets and give it to a third company, making their balance sheets lighter and providing an annuity stream for investors.
Bharti Airtel’s decision to partner Vodafone Idea has come as a business opportunity for private equity funds keen on investing in the optical fibre space for leasing assets to earn rentals in return.

The optical fibre synergies will be on the lines of the tower business where the two companies will hive off the fibre assets to a third company, which will in turn lease them out.
Analysts believe that it is a balance sheet light approach for the companies which are under financial stress at the moment. In the current environment, the companies would want to demerge their fibre assets and give them to a third company for making their balance sheets lighter. As far as PE funds are concerned, it would be an annuity business for them.

Bharti Airtel chairman Sunil Bharti Mittal said on Tuesday that his company was looking at an optical fibre joint venture with Vodafone Idea to take on Reliance Jio.

“We made an invitation. We did that in towers – if you remember, Indus Towers was created. And on the same lines, we have asked Vodafone Idea to come and join the fibre company,” Mittal told reporters on the sidelines of the Mobile World Congress in Barcelona (Spain).

On January 7, 2008, Vodafone Essar, a subsidiary of Vodafone Group, Bharti Infratel and Idea Cellular, said it formed an independent tower company, Indus Towers Limited, to provide passive infrastructure services in India to all operators on a non-discriminatory basis.

The three companies merged their existing passive infrastructure assets at 16 circles in the country. Vodafone and Bharti own approximately 42% each in the company, Idea Cellular holds 11.15% and the remaining 4.85% is held by private equity firm Providence. Indus Towers is an independently managed and operated company, offering services to all telecom operators and other wireless service providers such as broadcasters and broadband services providers.

The idea behind the formation of Indus Towers was enabling telecom operators to reduce operating costs through economies of scale.

In April 2018, Bharti Infratel Ltd, the tower arm of Bharti Airtel and Indus Towers, agreed to merge its businesses to create the world’s largest tower company after China.

The combined entity will own more than 163,000 towers.

Original article: https://www.afaqs.com/news/story/54545_Airtel-Vodafone-Idea-fibre-JV-a-business-opportunity-for-PE-funds