Telecom sector earnings may cross
$30 bn by 2013
New Delhi, Source : The Economic Times

 Continuing its growth trajectory, the Indian telecom sector is expected to generate revenues of over $30 billion by 2013, according to global analyst firm Gartner. The country’s telecom subscriber base is expected to cross the 770-million mark by 2013. India has over 450 million telecom users at present.

“The Indian mobile industry has now moved out of its hyper growth mode, but it will continue to grow at double-digit rates for the next three years as operators focus on rural parts of the country,” Gartner senior research analyst Madhusudan Gupta said. As per Gartner, India’s telecom market is unlikely to surpass China as the largest telecom market by 2013 and would retain its position as the second-largest market in the world. The mobile penetration in the country is also expected to reach 63.5% by 2013, up from 38.7% at present, according to Gartner. Growth is largely expected to come from telecom operators increasing their focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and decline in handset prices. The increased adoption of value-added services (VAS) will also stimulate growth. While the bulk of revenues for telcos would be generated from voice services, data usage will grow at a faster rate, Gartner said.

With the entry of new operators in the Indian telecom market, it is expected that voice tariffs will continue to fall. Also, expansion in rural circles is expected to pull down average revenue per user (ARPU). The number of people with prepaid connections would also increase to contribute about 96% of the total subscriber base by 2013, due to increased adoption in rural circles. Currently, about 93% of the users own a pre-paid connection. The churn rate is also expected to go up in India as more players enter the fray and the government allows mobile number portability (MNP). MNP will allow users to switch their telecom service provider while retaining their mobile number.

Business sentiment looking up: D&B
Chennai, Source : The Financial Express

Kaushal Sampat, chief operating officer, Dun & Bradstreet

The Indian economy’s business sentiment has improved indicating a path of recovery. Dun & Bradstreet, the world’s leading source of global business information, knowledge and insight, has found that business optimism has recorded a jump of over 40%, quarter-over-quarter. The Dun & Bradstreet composite Business Optimism Index (BOI) for third quarter of 2009 has recorded an increase of as much as 40.8%, inching up to 132.1 after touching an all-time low of 93.8 in second quarter of 2009.

It was observed that five out of the six optimism indices - namely, volume of sales, net profits, selling prices, new orders, and employee levels have registered an increase as compared to the previous quarter. The improvement witnessed in the business optimism during Q3 2009 indicates that the worst may be behind. “Positive data releases, improving investment sentiment along with the post-election optimism seem to have provided the much needed support to corporate confidence,” said Kaushal Sampat, chief operating officer, Dun & Bradstreet India. Going forward, the policy announcements in the forthcoming budget will be crucial in determining business expectations over the next quarter. Also, the advancement of monsoon and how it pans out during the rest of the season would play an important role in shaping business sentiment in the near future.” he added.

Demand conditions are expected to witness some improvement during third quarter of 2009, with as many as 72% of the respondents anticipating an increase in sales volume. While about 19% of the respondents expect volume of sales to remain unchanged, around 9% of the respondents anticipate a decrease in sales during third quarter of 2009. The resultant optimism for volume of sales stands at 63%, an increase of 40 percentage points as compared to the previous quarter. Profit expectations of the Indian corporates improved substantially, with as many as 69% of the respondents expecting an increase in their net profits during the forthcoming quarter. While about 10% of the respondents are anticipating a fall in their net profits in the forthcoming quarter, about 21% of the respondents expect no change in net profits during the Jul-Sep 09 quarter. The resultant optimism for net profits stands at 59%, an increase of as much as 41 percentage points as compared to the previous quarter. While about 35% of the respondents expect selling prices of their products to increase, about 13% expect to witness a decline in their selling prices during the Jul-Sep 09 quarter. However, a majority of respondents from almost all sectors anticipate no significant change in the prevailing prices.