India has witnessed many revolutions of many kinds and we probably know a few among them. And these few like White revolution or Green revolution are something that happened in the Agri space and we probably know them only out of the text books. And when I speak about a revolution that you and I would have experienced and the one that I would vote as probably the most impact making, I would naturally side with Telecom revolution.
Telecom revolution is unique in a way that it proved all estimates wrong and made the most optimistic person with the most optimistic expectations finally look like a pessimist. Yes, during the late 90s when analysts were making projections, their assumption was that every 2 Wheeler owner would opt for a Mobile connection. But today on an average, there are less than 1 million 2 wheelers sold in a month and I believe last month, the telecom industry added more than 15 million subscribers.
While the subscriptions keep ringing, it’s altogether a different matter that the telcos are not in the best of their money making activities. Of course, you know they still continue to make 1000 s of crore in profits every quarter, but that’s how they call it. But, I don’t think things are really going to settle down this way.
More and more alternatives will be created and the companies will become more and more innovative and efficient. Already we have seen Bharti flying to Africa and we recently even witnessed the highly heated 3G and BWA auctions. Something or other, it could be a change in technology, could be a change in the type of services offered will keep things moving. And especially with the auction of 3G and BWA spectrum, the telcos will probably witness another round of growth.
It is expected that
There will be 10 million 3G connections by the first half of 2011. There will be 100 million 3G connection by the first quarter of 2014. The ARPU s for these services will be around 11 or 12 USD as against 4 or 5 USD for voice services. India is expected to close 2010 with 660 million subscribers. India is expected to have 1 billion subscribers by 2014. The rural teledensity is expected to go up from 14% currently to 40% in 3 years.
So where am I going to find the 10in3 in the Telecom sector? During the great Gold rush in US, the ones who sold Shovels made lot of money than the ones who dug out gold. Yes, we have selected the one who is selling shovels : )
And to tell you something about the 10in3 or Street Smart, which are the core offering of Multibagger package, I have observed the following trend in the stocks –
They usually go up by 10% or 15% in a couple of weeks from recommendation
They cross the 50% mark in around 3 month time
They become a multibagger in around 6 month time.
Well, it’s only an observation and I believe that the trend continues with our July 10in3 as well.
$Multibagger package Team
Arun@hbjcapital.com
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