Hutch Essar Takeover – Expensive Mistake ?
The valuations for Hutch Essar have been highly unreasonable. Here is a list of developments.
- Maxis backed by Texas pacific Group bid at $13.5 Billion
- Relicance Communications Ltd backed by several financial institutions and VCs bids at $12 Billion for 100% stake. Subsequently raises the bid to $15- $17 Billion
- Rumors of Essar – Orascom Telecom and Qatar Telecom joint bid surface
- After talks with Ruia in London, Vodafone bids at $17 – $18 Billion for 100% stake.
- Paparazzis and private investigators follow Ruia family flight schedules and find that Ravi Ruia is booked on a Hong Kong flight.
- Ravi Ruia backed by Citibank and other FIs bids for 67% stake in Hutch for $11 Billion valuing Hutch at $16.5 Billion.
- Macquaire Wireless report suggests Hutch’s valuation cannot be more than $13.79 while Morgan Stanley values the business at $11 Billion
- Li Shing wants $14 Billion for his 67% stake
- Minutes ago, it is reliably learnt that Anil Ambani is willing to match Vodafone’s bid.
OK. Telecom India has an analysis of the regulatory hurdles for Maxis, Reliance and Vodafone. Readers have commented that Arun Sarin’s move @ $18 Billion will be an expensive mistake and I agree 
IMHO, I don’t think Ruias will ever sell their stake to Anil Ambani due to the corporate rivalry dating back to the days of Dhirubhai Ambani in Jamnagar which delayed Ruia’s dream of Essar Oil by more than 4 years. Vodafone has messed up its relation with Bharti Airtel Ltd and Sunil Mittal may collect a hefty sum to relieve Vodafone of Non-Compete clause and in all likelyhood will maintain the lead in GSM market. Orascom Telecom is likely to be kept out of the race on National Security grounds. Maxis winning the bid will make it even for all the players ?
Om Malik point’s out that Cingular bought AT&T wireless at $41 Billion with an ARPU / Month @ $55 while Hutch Essar’s ARPU is around $9. So who will commit this expensive mistake of buying Hutch or Hutch Essar at Insane Valuations ?
Tags: Mobile India, Hutch, Vodafone, Telecom
Indian Wireless Operators Market Share – Nov 2006
As you all know that India is the fastest growing Wireless market in the world. Here is a breakup of who controls the emerging Indian Wireless market.
Bharti Airtel Ltd is at the top followed by Reliance Communications Ltd. State owned BSNL has slipped to third place[from second place a year ago] while Hutch has been consistent at fourth place. Idea Cellular is a distant fifth sixth [Tata Tele is on fifth spot] in the race.
Click on the pie-chart below to view the marketshare clearly.
SMS in India maybe out of Do Not Disturb registry
The Indian regulator for telecom reforms, TRAI, is planning to drop SMS out of the list that is considered as Unsolicited Marketing. SMSes don’t seem to be a problem to the extent unsolicited marketing calls are. TRAI had initiated a consultation paper on Do Not Disturb registry in November and has recieved feedback from users that SMSes can be read at convenience of users. However, a final decision is not yet taken on this issue. You may write to Mr Gupta of TRAI at sgupta09@gmail.com.
The domestic tele-marketing industry is pegegd at Rs 500 crores [$100 Million]. Around 60-80 Billion SMSes are being sent in India every year. Reliance Communications is understood to have urged the TRAI to drop SMS out of the Do Not Disturb Registry.
Tags: Mobile India, SMS India, Do Not Disturb Registry India, SMS Marketing
Reliance Mobile Movie and Video Services
When Rajesh Sawhney, President Reliance Entertainment presented Zapak gaming plans to the chief of RCom, Anil Ambani, Anil is understood to have said Rajesh, “Get Gamming Buddy“. This has equally motivated the chief of wireless division, Shukla to drive the falling ARPUs higher by offering value added services and content on Mobile. RCom today became the first company in India to launch a mobile feature film, “Ctrl+Alt+Del” starring Rahul Bose to Reliance Mobile subscribers.
Ctrl+Alt+Del is a 25 minute movie under the genere – Romance has won acclaim at various international film festivals [Atlanta and Plam Beach International festivals]. The movie is accessible on Reliance Mobile under “Movies N More” and is available at price of Rs 15 per 5 Minute online streaming. [Sure it's expensive, compared to the Reliance business model of "Channa Key Bhav" ]
Reliance Mobile also has made available Mahabharat, Malgudi Days and other popular TV sops to its subscribers.
Tags: Mobile India, Reliance Mobile, Mobile Movie, Mobile Video
Hutch Essar Sellout – Vodafone joins bidding war
Vodafone group Plc has called for a board meeting later today [Thursday] to seek approval to bid for Hutchison Essar Ltd. Vodafone led by Sarin is seeking board approval for $13.5 Billion Plus bid. Earlier Maxis’ bid of $13.5 billion was tuned down.
Vodafone already holds 10% stake in India’s best and largest Mobile service Provider, Bharti Airtel Ltd. Had Vodafone held more than 10% stake in Bharti, it would be ineligible for Hutch Esaar because current Indian regulations restrict any entity to hold more than 10% stake in two cellular companies offering services in the same circle. However, an entity / investor with interest in Telecom company “A” can buy out Telecom company “B”, both operating in the same circle. Due to these regulations, Reliance Communications Ltd another strong contender for Hutch Essar wants 100% or none. Reliance’s GSM wing, Reliance Telecom’s operations overlap with Hutch’s operations only in two circles, Kolkatta and West Bengal and thus Anil Ambani’s desperate bid for Hutch Essar.
Stay tuned, will update more on the ir-rational valuations and Bids.
Tags: Mobile India, Telecom India, Vodafone, Reliance Telecom
India Broadband and Wireless Statistics. Nov-2006
India continues to be the fastest growing wireless market in the world. According to TRAI release, India now has a teledensity of 16.60% or 183.53 Million [LandLine + Wireless].
- Total number of mobile subscribers in India – 143.02 Million [GSM + CDMA + Fixed Wireless Phone]
- Total number of landline / wireline subscribers in Inda – 40.51 Million
- Total number of Broadband [>256 Kbps] subscribers in India – 2 Million
Tags: Mobile India, Broadband India, India Telecom Statistics
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