Author Topic: Telecom Sector  (Read 32511 times)

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Offline M&M

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Telecom Sector
« Reply #-1 on: October 14, 2012, 01:20:46 PM »
Incremental EPS at different levels of incoming traffic
Mn mins/month 1,400 1,200 1,000 800 600
PTCL 5.3 4.4 3.6 2.7 1.9
WTL 2.1 1.8 1.5 1.2 0.9
WTCL 5.0 4.3 3.6 2.9 2.1
TELE 5.7 4.9 4.0 3.2 2.4
Source: Elixir Research

EPS impact on various telecom companies
PTC TELE WTCL WTL
base case * 5.71 3.83 3.38 1.42
10% decline 5.14 3.45 3.04 1.27
20% decline 4.57 3.06 2.71 1.13
30% decline 4.00 2.68 2.37 0.99
40% decline 3.43 2.30 2.03 0.85
50% decline 2.86 1.91 1.69 0.71
* avg incomming monthly traffic of 1.2bn minutes
Source: FS Research

EPS impact post ICH (PKR)
Company Market share as of Dec 09 EPS impact
PTCL 50% 3.12
World Call 11% 3.68
Wateen 9% 4.16
Telecard 4% 4.02
Source: BMA Research


« Last Edit: October 14, 2012, 01:25:29 PM by M&M »
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Telecom Sector
« Reply #-1 on: October 14, 2012, 01:20:46 PM »

Offline saifullahkhan7

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Re: Telecom Sector
« on: October 14, 2012, 07:29:53 PM »
In the lower caps, I am biased towards WTL due to relatively better (and also improving fundamentals), In the end game I think WTL might have higher EPS than TELE. But TELE with little tweaking and Luck can become the second biggest player after PTC. At my present calculations TELE stands at a target price of 6 Rs./Sh. and WTL stands at 5.5 Rs./Sh.
(Note: these estimations needs to be tweaked further). 
Trust in God! & Candle Sticks, Bollinger Bands and looking into  2 Yrs EPS/DPS helps!!!

Offline M&M

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Re: Telecom Sector
« Reply #1 on: October 14, 2012, 07:41:10 PM »
it's pretty much established that telcos will have positive impact, now time to focus on entry levels ..
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Offline Saiti

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Re: Telecom Sector
« Reply #2 on: October 14, 2012, 09:29:24 PM »
What entry levels do u suggest? Especially for WTL and PTC?

Offline M&M

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Re: Telecom Sector
« Reply #3 on: October 14, 2012, 11:31:33 PM »
What entry levels do u suggest? Especially for WTL and PTC?
PTC important levels are 18 and 16
for WTL, I'll wait for turnaround signals like trendline breakout.
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Offline SBM

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Re: Telecom Sector
« Reply #4 on: October 15, 2012, 08:39:31 AM »

ICH is for real, and it’s ON

October 15, 2012 BR RESEARCH 0 Comments
 The International Clearing House (ICH) has become operational and effective from October 1, sources told BR Research, in compliance with the Policy Directive dated August 13, 2012, issued by the Ministry of IT. ICH is now serving as a single termination exchange for all international, incoming voice traffic.

Sources say that the fourteen LDI operators will now share the total quantum of international voice traffic terminating in Pakistan. The business volume sharing mechanism, which will evolve over time, is said to be currently based on each operator’s historic share and infrastructure capacity.

The official response from PTCL – the volume leader among LDIs and a major stakeholder in the ICH regime – indicates that an ICH Board has been formed under the MoIT directives. Responding to queries from BR Research, the Company spokesperson said that the ICH Board has membership from all the LDI operators, including PTCL, and has one representative each from PTA and MoIT as observers.

To oversee the day-to-day operations of ICH and to ensure compliance with ICH Agreement, a five-member ICH Committee has also been formed – with two members from PTCL and three from the remaining LDI operators. It is within the mandate of the ICH Committee to sign any new agreement for international call termination with foreign carriers, the spokesperson added.

Clarity will emerge over time as to the impact of ICH on foreign calling tariffs, grey trafficking and local LDI competition. LDI operators are upbeat about ICH helping improve tariffs for international calls terminating in Pakistan. It is also argued that incoming voice traffic won’t be affected much “because most foreign operators never passed on the benefits of low termination costs to customers calling Pakistan”.

“In the past, the PTA-notified tariffs (the Approved Settlement Rate) were not being followed by the 14 LDI operators owing to negative competition – that only benefitted foreign carriers and caused loss to Pakistan’s economy. The major objective of ICH is to stabilise the ASR, which is a legitimate right of LDI industry, PTA and the Government of Pakistan,” noted the spokesperson.

Grey trafficking in LDI telephony is a serious matter though. Reportedly, the incidence is as high as 40 percent, costing Pakistani exchequer up to $800 million a year. The PTCL spokesperson shared with BR Research that the ICH agreement has obligated the LDI industry to provide a comprehensive monitoring system for grey traffic and lawful interception within 90 days of commencement of ICH operations.

Combating illegal telecom gateways and exchanges is surely a tall order when PTA, reportedly, could not check 70 percent of the incoming traffic prior to October 1. In the absence of effective legislation, heightened surveillance and enhanced scope of crackdown, there is strong likelihood that higher ASRs will motivate the grey traffickers to cheat more after with the ICH in place, not less!

From the onset, ICH has been opposed by the Competition Commission of Pakistan. CCP was concerned that the ICH will monopolise the incoming international voice traffic for PTCL; effectively cartelise the market by instituting fixed quotas and prices; and close the LDI market to new entrants. As it seems, cooperation between sector regulator and the competition watchdog didn’t happen after all.

It’s not clear if CCP will view the ICH as water under the bridge now and make peace with an inconvenient reality confronting its competition mandate. Nor is there any word from TransWorld Associates – the aggrieved party which had earlier become a necessary part to CCP proceedings on the matter – to challenge the ICH mechanism through litigation.

While it is acknowledged that the ICH seems anti-competitive (though it is technically and financially sound) for the LDI sector, the arrangement pertains to only one of many LDI segments: international voice call termination in Pakistan. ICH doesn’t seem to restrict competition in other LDI telephony segments, like domestic long distance telephony, international outgoing telephony, and bandwidth and data services.

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Offline M&M

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Re: Telecom Sector
« Reply #5 on: October 16, 2012, 01:39:14 PM »
traffic recorded at 30mn min/day post ICH implementation i.e 900mn min/month ~akd
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Offline saifullahkhan7

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Re: Telecom Sector
« Reply #6 on: October 16, 2012, 02:15:25 PM »
traffic recorded at 30mn min/day post ICH implementation i.e 900mn min/month ~akd
Discounting Hajj and Eid Effect, plus first month after admission of students, normally this figure is over representative.
Trust in God! & Candle Sticks, Bollinger Bands and looking into  2 Yrs EPS/DPS helps!!!

Offline hammad01

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Re: Telecom Sector
« Reply #7 on: October 16, 2012, 02:26:29 PM »
Saif bhai are you seeing any string effect in near future. I mean to stay hipe created of multi  fold increase in calling rates, limiting calling to remarkable low and then again after sometime people getting use to it and starting to a limited extent

Offline fazal

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Re: Telecom Sector
« Reply #8 on: October 16, 2012, 02:43:12 PM »
@ Saif, 25 M per day can cater for all variations (hajj or anything else). Eid generally increases the traffic but 2 or 3 day max phenomenon. Can base calculations on 750 M per month. Math after this is interesting....
 
« Last Edit: October 16, 2012, 02:45:28 PM by fazal »

Offline saifullahkhan7

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Re: Telecom Sector
« Reply #9 on: October 16, 2012, 03:05:11 PM »
Fazal Bhai, Maximum Calls are from UAE and Saudi Arabia, in Eid the workers there make multiple calls (Bakra lina hai ya nahi, aur phir bakra kitnay ka leeya), I guess the impact is higher 2 and 3. The second source of calls is students who are in their first year and settling down in October. But since students are more price sensitive so I think it will further dry up calls from there too. Just my opinion!

@Hammad01:  I think the ICH rates are already too high, I don't see it going up in near future, because most of the people calling into Pakistan are price sensitive (workers and students). Secondly, these people are source of remittances, increasing ICH charges may have its effect on remittances so I think Government may consider it downwards if Overseas Pakistanis organizations and associations interfered.

As far as alternate mode of communication is concerned, i think that will be count 15-20 % towards  of the revenue (loss) because neither our over seas workers nor most of the families living in rural Pakistan are aware of them or are able to use them. Secondly in my view if the rate is reduced by 20 - 30% and some levy is imposed on Calls going outside Pakistan, it will keep both the volume and revenue up.   
Trust in God! & Candle Sticks, Bollinger Bands and looking into  2 Yrs EPS/DPS helps!!!

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Offline saifullahkhan7

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Re: Telecom Sector
« Reply #11 on: October 24, 2012, 04:46:16 PM »
Not to worry, in present political conditions US won't push Pakistan to anything, but honestly i think the present rates for incoming calls are high, and will only encourage calls from Pakistan. A better solution is to implement tax both ways..... and at much reduced rates.
Trust in God! & Candle Sticks, Bollinger Bands and looking into  2 Yrs EPS/DPS helps!!!

Offline saifullahkhan7

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Re: Telecom Sector
« Reply #12 on: October 24, 2012, 09:04:59 PM »
WTL and Tele both reaching yummy zone!
Fazal bhai..... In put please.
Trust in God! & Candle Sticks, Bollinger Bands and looking into  2 Yrs EPS/DPS helps!!!

Offline M&M

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Re: Telecom Sector
« Reply #13 on: October 24, 2012, 09:18:41 PM »
tele has to show fy and q1 losses
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Offline Dehan

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Re: Telecom Sector
« Reply #14 on: October 24, 2012, 11:18:06 PM »
Not to worry, in present political conditions US won't push Pakistan to anything, but honestly i think the present rates for incoming calls are high, and will only encourage calls from Pakistan. A better solution is to implement tax both ways..... and at much reduced rates.

Is baat ki samaj inhain aik saal baad aia gee. Ye aisay hi kartay hain.
"Suno sab ki, laiken Dehan apna apna"

Offline fazal

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Re: Telecom Sector
« Reply #15 on: October 25, 2012, 12:45:45 AM »
@ saif 900 M mins per month translate into $ 360 m for GoP per annum. Over and above PTCL dividend will fetch another decent amount. In my opinion no government is in a position to forego this yearly recurring revenue. So as per industry vibes, ICH is here to stay. That is why PTA chairman said that ICH is better than 3 G auction ;)

these types of news r important for stock market makers since create uncertainty - on which they thrive and make money... so u will keep listening, hearing and reading such news... noise will remain there but will reduce in due course.

Tele and WTL r decent buys... my strategy of accumulating starts at 2.9 for tele and go buying till 2. WTL has less potential then tele but surely better sponsors in terms of oman tel. I am afraid that they will put some type of management fee and reduce the return of ICH for pakistani shareholders in WTL.

@ M&M rumors r for break even results for last quarter fy 12 for tele... but only rumors. Tele has delayed BM and no notice on kse site. This makes me ponder on the transparency of the affairs of the company. they hv history of writing back liabilities and showing profits. so will keep fingers crossed till the results fy 12 and 1st q r announced. if loss then time to buy big :D
« Last Edit: October 25, 2012, 12:48:35 AM by fazal »

Offline fazal

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Re: Telecom Sector
« Reply #16 on: October 25, 2012, 11:28:04 AM »
have heard that Supreme Court has passed some orders about ICH. Anyone has an idea what is it? suspension of ICH or stopping the receipts of ICH?

Offline hello123

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Re: Telecom Sector
« Reply #17 on: October 25, 2012, 11:37:23 AM »
have heard that Supreme Court has passed some orders about ICH. Anyone has an idea what is it? suspension of ICH or stopping the receipts of ICH?

LHC stay on ICH (Brain net case in LHC)

Offline M&M

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Re: Telecom Sector
« Reply #18 on: October 25, 2012, 11:52:37 AM »
have heard that Supreme Court has passed some orders about ICH. Anyone has an idea what is it? suspension of ICH or stopping the receipts of ICH?

LHC stay on ICH (Brain net case in LHC)
yes Lahore High Court has reportedly canceled the new rates notification
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