As the valuations of Hutchison-Essar rocketing high in the sky, it is amazing to make out how a good deal of money these telecom ogres are going to pop out for each subscriber. In accordance with the newest valuation estimations by Goldman Sachs, the acquirement of 100% stake in Hutchison-Essar is supposed to render one of these telecom ogre lighter by popping out almost $18 billion. So do you understand something by this? Obviously not anything, it simply could let you know how much value you are having for these telecom companies.
So find out some numbers given below that may help you make out your ‘Telecom Value’ or in market terminology - Subscriber Valuations.
Hutch is having subscriber base of 22 million and is running at a very rapid speed. The Ruias is holding 33% of the company and they will have to pay almost $10-12 billion to get full power over the company, which stands for that they would have to pay nearly $455-545 (INR 20,475-24,525) for every subscriber. Moreover they will be benefited by this, as the amount is moderately less as equated to what will be paid by the other players. This value is also quite cheap while likened to subscriber value of some other primary telecom firms in India.
If any of the 3 overseas players such as Vodafone, Orascom and Maxis make purchase of stake in Hutchison-Essar, which is only up to 74% they will have to give almost $545-614 (INR 20,475-27,614) for every subscriber. On the other hand, if Reliance Communications grabs up the whole company in that case it will have to pay $16-18 billion, because of which the subscriber valuations is put between Rs 32,715 & Rs 36,810 or $727 & $818.
These existing subscriber valuations look quiet cheap taking into consideration that Warburg opted out 9.3% in Bharti Tele-Ventures in 1999 for $873 million for subscriber value of $1000. Previous year Vodafone took out 10% stake in Bharti for $1.5 billion for a second time at a subscriber value of $1000 (INR 45,000). For Hutch subscribers, your value could pop up by $909 (INR 40,905) in the forthcoming days ide est if any of these players suggests an offering close to $20 billion (INR 90,000 crore).
