Telco ratios

Collecting data: ratios from the Indian market
MTNL: P/E - 15.71
Bharti: P/E - 38.71 (interestingly when I checked the price was Rs. 823 whereas Idea was trading at 117. )
Reliance communications: P/E - 49.12 with a share price of 513.
I had no idea that BHarti was the most highly priced share.....

Indian ARPU from December 2006 - Rs. 315

These are figures from April 2007
Indian has penetration rates of less than 16% which is about 167 million. Comparatively China has a penetration rate of 35% with 400 million covered. As I've said before, one of the keys to valuation in emerging markets are the numbers of subscribers. This was more so earlier when EBITDA was largely negative. However, now, EBITDA multiples are largely being used for valuation even in India.

One of the articles I read, talked about earnings multiples being used in the future though I am not so sure about the thought process. I find EV/ EBITDA used with highest frequency. Also, the same article talked about EPS being a performance measurement index when the growth rates stabilise as does capex. The reason I disagree is because in a telecom environment, capex is not just related to growth in subscribers but also growth in technology. The large investments being made today by AT&T and Verizon are for their broadband growth and the FiOS projects etc not just a battle for coverage.

Some acquisition data:
AT&T-Bellsouth - $67 billion that is 54 million wireless and data Bellsouth subscribers
Telefonica-O2 UK - $31 billion
Aditya Birla sold 33% of Idea Cellular for $813 million
Tata Teleservices sold 9.9% to Temasek for $300 million

Also, a quote from the same article I've mentioned earlier - I would love to have this confirmed: Indian telco capex since 1995 - $13 billion. Now, in the next three years, the capex expectation is $22 billion! I wish I had some background to these numbers. I may be able to cull out something from the balance sheets of the equipment providers. Just in the month of June, a look at the Nokia-Siemens orders from India - Rs. 300 crore GSM expansion from Aircell, Rs. 500 million GSM/ GPRS/EDGE expansion from Idea Cellular. The BSNL order is DSLAMs for their Eithernet Internet network - 6 million connections but no figures on financials. This is one month - $77 million not counting BSNL.