Bharti Tele-Ventures revenues from the just launched national long distance (NLD) telephony is expected at Rs 441.9 crore by the end of fiscal 2003, which will be around 14.9 per cent of the total revenue from operations in that fiscal.
These estimates have been put forth by a Morgan Stanley research estimates. However, Morgan Stanley has not made any projections for 2001-02.
Bharti launched its NLD services yesterday through Bharti Telesonic, which will be rolling out the NLD service, a subsidiary of Bharti Tele-Ventures.
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Revenues at the end of fiscal 2004 is estimated to be around Rs 928.7 crore, approximately 18 per cent of the total revenue.
JM Morgan Stanley is the book running lead manager for Bharti Tele-Ventures' imminent initial public offering (IPO).
DSP Merrill Lynch, the co-book running lead manager, on the other hand, has put Bharti's inter-circle revenues, in its long distance forecasts, at Rs 405.1 crore at the end of fiscal 2003 and Rs 598 crore at the end of fiscal 2004.
Launching the first private subscriber trunk dialling (STD) service yesterday, Bharti announced it is planning a slew of "deep discounts" to operators which, in turn, will be passed on to the consumers.
Bharti, which received the NLD licence on November 29, in investing Rs 14,000 crore to lay 26,000 km of optic fibre cable (OFC) network. The company has already invested Rs 800 crore on 12,000 km of OFC across 50 cities and the remaining 14,000 km of OFC will be laid in the next 12-15 months.
Morgan Stanley has stated that they have been conservative in their margin assumptions for Bharti's NLD business. The company's market share is a function of rollout obligations and there is a risk of project overruns.
Assuming a 10 per cent fluctuation in NLD revenues, Morgan Stanley has put the overall sensitivity at 1.4 per cent to Bharti Tele-Ventures' overall earnings before interest, tax and depreciation (EBITDA).
Bharti, apparently, has offered discounted inter-connection tariffs to access providers (cellular and basic) which is around 50 per cent lower than the existing tariffs offered by Bharat Sanchar Nigam Ltd (BSNL).
According to the Morgan Stanley report, with the entry of competition, tariffs will fall at a compounded annual growth rate (CAGR) of around 13 per cent for the next five years and 12 per cent in the long-term, from fiscal 2001-2012. Further, the dip in tariff is expected to increase usage by 25 per cent.
Based on these assumptions, the projected revenue from the NLD market will show a CAGR of juts 5.2 per cent during fiscal 2001-06 and around 4.4 per cent for the longer term, during fiscal 2001-12.