Bharti-Zain deal – Weak Signals for Airtel

Bharti Airtel management confirmed that it is in exclusive talks with Zain for buying the African assets of Zain (15 countries excluding Sudan & Morocco) for US$10.7b. Bharti and Zain are likely to be in exclusive talks till March 25, 2010. Bharti’s Zain acquisition is likely to lead to weakness in Bharti’s share price in the short term. (more…)

Bharti Airtel Impressive Q3 FY2010 – Buy

Some of they things to observe from Bharti Airtel’s Q3 FY 2010 results are – RPM declined 8% qoq to Rs0.52 vs. our estimate of 11%,
implying lower than estimated impact of tariff cuts in 3QFY10, Capex
declined 26% qoq to Rs16.9 bn. Enterprise/ Telemedia revenues declined 4% QoQ.

Continued increase in Network Operation expenses poses downside risk to margins. Continued increase in SG&A expenses poses downside risk to margins. Airtel DTH segment results reported for the first time and EBITDA loss of Rs2.5bn in 3Q. (more…)