India's Telecom-Rule Change May Not Bring Investment Rush
The world's biggest cellular operators have just received an invitation to enter India's fast-growing market, but it is far from certain they will come to the party soon.
As part of a broader bid for investment, New Delhi this month raised the ceiling on foreign ownership in telecommunications-services companies to 74% from 49%, propelling India further down the deregulatory path than China.
IN THE MARKET
See more coverage of Asia's financial sector, from IPOs to banking to bond offerings.
"The general expectation ... is that there could possibly be a lot of people coming in to invest in India," says Kobita Desai , a telecom analyst at research company Gartner Inc. in Bombay. "I think that's premature. ... Foreign companies already present in India are likely to increase their investment, while new investors will take some time and will probably need to assess the business potential in light of the competitiveness in the market."
India is one of the world's fastest-growing cellular markets, which makes it attractive to potential investors. But the country has some of the world's lowest mobile-service charges, averaging three U.S. cents a minute. So competing profitably in such an environment is difficult.
Under the new ownership rules, the jockeying for subscribers is likely to intensify, says Sanjay Chawla, an analyst at Kotak Securities Ltd. in Bombay. His summary of the situation: "The market is brutal here."
Still, the market continues to be a major opportunity. The base remains small for a country with a population of more than one billion, and now there is a more-open regulatory climate, especially compared with China. In 2004, India's mobile subscriber base more than doubled from 2003, and analysts estimate that about two million subscribers are added every month. Despite rapid growth, Gartner calculates that the penetration rate for mobile services was 4.5% at the end of 2004.
China has 1.3 billion people and adds about five million subscribers a month. Beijing has recently opened its telecom sector to competition as mandated by its World Trade Organization commitments. However, the government is working on a long-awaited comprehensive law to govern the sector, and few companies have ventured in, citing China's murky laws and its ban on foreigners having controlling stakes in telecom joint ventures.
Also, China's base isn't small anymore. The country's mobile-subscriber penetration rate is 24.3%, Gartner says.
While fierce competition could keep new investors out of India, "one shouldn't really doubt the potential of the Indian market," says Mr. Chawla of Kotak Securities. "We have a proper telecom regulator ... and an open market."
It shows. Foreign companies have profited handsomely from their investments in India, and several are considering stock offerings.
Last week, Singapore Telecommunications Ltd. said that during the nine months ended Dec. 31, profit from its effective 28.5% stake in Bharti Tele-Ventures Ltd. nearly tripled from a year earlier. Hutchison Telecommunications Group's emerging-markets subsidiary, HTIL, derives nearly half of its profit from its Indian businesses and expects to split them off before June. Bharti Tele-Ventures, India's second-biggest mobile-phone operator by number of subscribers, also has expressed interest in offering stock this year.
Analysts are divided on which companies might take the plunge and hook up with a partner under the new ownership limit. Britain's Vodafone Group PLC, a cash-rich, global carrier with experience in emerging markets, is often mentioned, but Vodafone left India in 2003 by selling its 21% stake in RPG Cellular Services Ltd., citing an inability to offer national service. Last year, Vodafone Chief Executive Arun Sarin said the group would consider returning to India if consolidation occurred, a prospect Mr. Chawla thinks unlikely in the near term.
A Vodafone spokesman said that "in common with a number of other markets, India is a market that we monitor."
The likelier scenario for the Indian market, observers say, is that the entrenched foreign investors will raise their stakes when the price is right. In a conference call last week, SingTel CEO Lee Hsien Yang said the company would consider increasing its stake in Indian ventures but would "obviously review [the new rules] from the pure financial angle and from what we deem to be an appropriate value to pay."
Mr. Chawla says Bharti Tele-Ventures trades at about 20 times its projected 2005 earnings while the broader Bombay market has a multiple of about 12.5.
Kevin Scully, managing director at independent Singapore stock-research firm Net-Research Asia, says he feels the Indian market is "quite efficient, so the valuations are not cheap." A move by SingTel to increase its stake in Bharti "would be earnings-dilutive," says Mr. Scully, who has a "buy" rating on SingTel stock and describes the company's acquisition strategy as "conservative."
Another Singapore company, state-owned Singapore Technologies Telemedia Pte. Ltd., is finalizing a joint venture in India. Along with its partner TM International, the international investment arm of Telekom Malaysia Bhd., ST Telemedia is acquiring a 48% stake in Idea Cellular, India's fifth-largest operator, from Cingular Wireless, a joint venture between SBC Communications Inc. and BellSouth Corp.
Even before that deal is done, some analysts speculate that ST Telemedia is interested in increasing its stake in Idea Cellular. An ST Telemedia spokeswoman said the company doesn't comment on rumors.
Such a business move makes sense to Kotak Securities' Mr. Chawla. Idea Cellular needs funding, he says, while India's new rules open the way for foreign investors to hold controlling stakes in the country's telecom ventures.
印度新电信规定未必能招来金凤凰
全球最大的几家手机运营商已收到了印度政府发出的希望它们参与其快速增长的电信市场的邀请，但它们是否会如约而至近期仍不得而知。
作为吸引投资的众多举措之一，新德里本月将国内电信服务企业的外资持股比例上限从49%调高到了74%，放松管制的力度大大超过了中国。
“普遍预期......可能会有很多人来到印度投资，”Gartner Inc.驻孟买的电信分析师科比他?德塞(Kobita Desai)表示，“我认为目前还很难说......在印度已有投资的外国公司或许会增加投资，但新的投资者需要有一段时间根据市场的竞争情况对业务潜力进行评估。”
印度是全球增长最为迅速的手机市场之一，这对潜在投资者深具吸引力。但该国的手机服务费也处于世界最低行列，平均为每分钟3美分。在这样的一个环境中竞争，要保持盈利具有一定难度。
Kotak Securities Ltd.的分析师桑杰?乔拉(Sanjay Chawla)预计在新的外资持股比例规定下，对手机用户的争夺将加剧。他对印度市场的总结是“这里竞争残酷”。
不过，这个市场仍蕴藏著很大的机会。印度现有的手机用户数量同超过10亿的总人口数相比依然很低，而且现在印度的监管环境又更加开放了，特别是相比中国。2004年，印度手机用户总数较上年增长了一倍多，分析师们估计大约每月增加200万用户。但尽管增长迅速，据Gartner计算，截至2004年末，印度手机服务普及率仅为4.5%。
中国有13亿人口，每月增加手机用户大约500万。根据加入世界贸易组织(WTO)时所作的承诺，北京最近放开了电信市场。但一个长久期待的规范电信业的详细法规仍在制定之中，因此在电信市场引入竞争机制后，几乎还没有什么公司初尝螃蟹，原因是中国的法规存在很多模糊的地方，并且禁止外国投资者在电信合资企业中掌握控股权。
此外，中国的手机用户基数也已不小了。Gartner的数据显示，中国手机用户的普及率目前为24.3%。
虽然激烈的竞争会让新投资者对印度望而却步，但“人们的确不应置疑印度市场的潜力，”Kotak Securities的乔拉说，“我们有适当的电信监管......和开放的市场。”
的确，外国公司在印度的投资获利甚佳，有几家公司还在考虑发行股票。
上周，新加坡电信(Singapore Telecommunications Ltd.)宣布截至12月31日的9个月，在Bharti Tele-Ventures Ltd. 28.5%的持股所获利润较上年同期增长近2倍。和记电讯集团(Hutchison Telecommunications Group)的新兴市场子公司──和记电讯国际有限公司(HTIL)有近一半的利润来自印度业务，集团计划今年6月份前将印度业务剥离。以用户数统计，印度第二大手机运营商Bharti也表示今年有意发行股票。
分析师们对哪些公司可能会在新的持股比例规定下结成合作伙伴意见不一。经常被提到的有英国的沃达丰空中通讯公司(Vodafone Group PLC)，这是一家现金充足、在新兴市场有著丰富经验的全球运营商，2003年通过出售在印度RPG Cellular Services Ltd. 21%的持股（原因是无法提供全国性服务）撤出了印度市场。去年，沃达丰首席执行长萨伦(Arun Sarin)表示，如果行业整合发生，公司会考虑返回印度。但Kotak Securities的乔拉认为，近期内不会发生整合。
沃达丰的发言人称，和其他许多市场一样，印度也是他们关注的市场之一。
观察人士表示，印度市场更有可能出现的一种情形是现有的外国投资者会在价格合适的情况下增持。在上周的一个电话会议上，新加坡电信首席执行长李显扬表示，公司会考虑是否在印度增持股份，但“首先会进行纯财务分析以及考虑价格是否合适。”
Kotak Securities的乔拉指出，Bharti目前的股价大约是2005年预期每股收益的20倍左右，高于孟买股市约12.5倍的平均水平。
新加坡独立股票研究公司Net-Research Asia的董事总经理凯文?斯卡利(Kevin Scully)表示，他感觉印度市场的效率很高，因此估价并不便宜，新加坡电信增持Bharti的举动将对具有收益稀释效应。斯卡利对新加坡电信股票的评级是买进，并称该公司的收购战略保守。
另一家新加坡公司、国有的新加坡科技电信媒体(Singapore Technologies Telemedia Pte. Ltd.)正在最后敲定收购印度的一家合资企业，合作收购方TM International是马来西亚电信(Telekom Malaysia Bhd.)的国际投资部门。新加坡科技电信媒体将从Cingular Wireless手中收购印度第五大运营商Idea Cellular 48%的股份；Cingular Wireless是西南贝尔(SBC Communications Inc.)和南贝尔(BellSouth Corp.)的合资企业。
虽然新加坡科技电信媒体收购Idea Cellular的交易尚未最后敲定，已有分析师认为，新加坡科技电信媒体有意增持Idea Cellular的股份。新加坡科技电信媒体的发言人称，公司不会对传言置评。
Kotak Securities的乔拉认为这样的举动具有意义。他说，Idea Cellular需要资金，而印度新的法规开启了外国投资者控股印度电信企业的大门。
