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Monday 9 November 2009

Bharti Airtel and Rcom

Friends,

It is interesting to note some key ratios/figures for Bharti and Rcom:
A) Bharti has 113 mn customers against 86 mn of RCom.
B) Bharti has market share of 23.5% while RCom has 18.5% of market.
C) Average Revenues Per User(ARPU) are Rs 252 and Rs 161 for Bharti and Rcom respectively.
D) Minutes of use per month per user are 450 Bharti and 340 for Rcom.
E) The average revenue per minute(ARPM) is 56 paisa for Bharti and 47 paisa for Rcom.

Clearly Bharti has an edge over Rcom but I think future will be favouring Rcom due to its recent market initiatives. Bharti will have difficulty in further improving its numbers and Rcom will possibly do it more easily. Bharti takes pride in serving high-end user and Rcom is with commoners. Also the simplified rate structure will woo back many a customers back to RCom. As the share price has corrected more for RCom, it is better to go for it than for Bharti.

Hari Om,
Krsna Khandelwal

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