INDIAN SECTOR

The telecom sector has shown impressive growth during the past decade. Today, India has more than 125 million telephones network which is one of the largest communication networks in the world, which will continue to grow at a blistering pace. The rapid growth in the telecom sector can be attributed to the various pro-active and positive policy measures taken by the government as well as the dynamic and entrepreneurial spirit of the various telecom service providers both in private and public sector.

GROWTH OF INDUSTRY

Two striking features of the growth of telecom sector viz. increasing preference for mobile phones and higher contribution of private sector in the incremental growth have predominated the telecom sector. The share of mobile phones (including WLL mobile) has overtaken the share of landlines with 62% in the total number of phones. The private sector's contribution is also increasing rapidly. Currently more than 30 lakh phones are being added each month and it is targeted that by the end of 2007 the total number of phones may reach a level of 250 million taking the tele-density to more than 22% from the present level of 11.32%.

TELEDENSITY RISES TO 19.25 PERCENT

The telecom sector further expanded with the net addition of 6.3 million in the number of telecom subscribers during the month of May 2007. While the addition in the GSM and CDMA segments was 5 million and 1.5 million respectively, the fixed line segment declined by 0.2 million. Maharashtra, Tamilnadu and Andhra Pradesh circles have added more than 4.5 lakh subscribers each. As a result, the total number of telephones in the country is now more than 218.06 million registering a growth of 46.9 per cent between June 2006 and May 2007. The overall teledensity improved further to 19.25% in May 2007.

The growth of broadband connections improved further and at the end of April 2007, about 2.38 million broadband connections were provided and coverage of broadband connectivity by public sector service providers has reached 1039 cities. The total number of existing ISP licencees is now 377.

Dominant Industry Players

The industry is dominated by few big players viz Bharati Airtel Ltd, Reliance Communications Ltd and Idea Cellular Ltd.

BHARATI AIRTEL LIMITED

Bharti Airtel has crossed the 40 million-mobile customer milestone. With this, Bharti Airtel becomes the first Indian mobile services provider and the 10th in the world* to join an exclusive list of global telecom operators with more than 40 million customers from a single-country. This landmark customer base was achieved in just 12 years, making Bharti Airtel one of the fastest companies to make it to this exclusive list.

Highest ever-net addition of 1.8 crore customers in a year.
Market leader with a market share of all India wireless subscribers at 22.9% (20.4% last year)
Total Revenues of Rs. 18,520 crore (up 59% Y-o-Y)
EBITDA of Rs. 7,451 crore (up 72% Y-o-Y).
Cash Profit of Rs. 7,307 crore (up 79% Y-o-Y).
Net Profit of Rs. 4,257 crore (up 89% Y-o-Y).

RELIANCE COMMUNICATIONS LTD.

Rated among the Asia's 6 Topmost Valuable Telecom Companies is India's foremost truly integrated telecommunications service provider. The company with a customer base of over 35 million including over 1 million individual overseas retail customers' ranks among the Top 10 Asian Telecom companies. Reliance Communications corporate clientele includes 600 Indian and 250 multinational corporations, and over 200 global carriers.

IDEA CELLULAR LTD.

As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in 11 circles. With a customer base of over 10 million, IDEA Cellular has operations in Delhi, Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh and Kerala. IDEA Cellular's footprint currently covers approximately 45% of India's population and over 50% of the potential telecom-market.

OVERWEIGHT STOCKS FINANCIALS

Few Other Stocks To Watch Under Telecom Sector

MTNL
Tata Teleservices (Maharastra)Ltd.
VSNL

BUY :

Idea Cellular Ltd. at Current Market Price Rs. 119
RCoM at Current Market Price Rs. 545
Bharati Airtel Ltd. at dips around Rs. 830