Humans Balance Sheet

 

Telecom Engagement Model for Private 5G

Telecom Engagement Model for Private 5G 

Key Message 

• Private 5G is about transforming business operations and driving new revenue opportunities via the application layer. 
• Telcos are adopting different engagement & deployment models for Private 5G. 
• An increase in the footprint across the engagement value chain leads to an increase in the complexity but reduces time to market 
• Jio in India is heading for end-to-end value chain control 
• The ecosystem is getting more complex as partners are also competitors.

Edge Continuum

Edge Computing is a decentralised mechanism done at the edge of the network, close to the data source, as opposed to on the cloud or away in data servers. 

With the rise of the Internet of Things (IoT) devices more and more smart devices connect to the network, hence businesses are facing demanding and diverse data challenges. 

Key Strategies are 

• Retail – Sell directly to Enterprise 
• Retail – Sell via Partners like HPS
• Wholesale - become Wholesale provider

Edge Computing Revenue Model

Telco and Hyperscaler Partnership. 

Australia and Indias Internet Speed Ranking - 2023

Australia and Indias Internet Speed Ranking  - 2023  

 Australia and Indias Mobile Speed Ranking  - 2023  

Sellers from Mars and Buyers from Venus - Nurturing, Calm, and Stable Seller and Buyer

 Persona Mapping with Elements - Buyer and Seller 

In the world of business-to-business (B2B) sales, the buyer and seller relationship plays a significant role in winning or losing a transaction. Creating and nurturing these relationships across multiple stakeholders is a challenging, lengthy, and time-consuming process.
One of the critical activities and constituents of a sales plan is to build the buyer's stakeholder persona that will assist in the relationship-building process. Mapping of these stakeholder personas reveals the type of levers that can be used to develop and nurture long-term relationships with the intent of winning and expanding the sales pipeline. Without the intelligence of the buyer's persona, the sales execution effort will be challenging and profoundly inefficient and ineffective.

 
Besides, it addresses the risk of losing a sales representative because by capturing and documenting the buyers' persona, you can ensure that gathered intelligence and levers applied in building relationships and influencing negotiations are not lost with a change in guard at the sellers' end. 

The framework for creating and destroying five elements is applied to overcome the challenging task of mapping and building the persona. The inherent attributes of each element are used to map and develop the personality of each stakeholder at the buyer's and seller's end in different scenarios. 

Let us explore how these elemental attributes assist in building persona maps.

Earth means Nurture, Calmness, and Stability

Earth is the most stable element among the five elements. Like a mother, it provides resources to all living beings to live and grow since the inception and evolution of humankind. Similarly, earthly natives are like a mother who provides resources for her children to live and grow. They provide unflinching and unconditional support to others. Their inherent ability to guide and nurture makes them good mentors and trusted advisors.

 

The bond between mother and child is everlasting; similarly, these natives are regarded as bondsmen for their friends and family members. People can count on them for their support during challenging times. In sales, these people protect their team members when a deal is lost.   

The Earth primarily remains peaceful, except when rare volcanoes erupt or earthquakes or cyclones occur, causing grief to those affected. Similarly, earthly natives stay calm and stable in their day-to-day life. They lose their cool and calmness rarely, like earthquakes or volcanic eruptions.

A mother raises her children with patience, determination and works hard to ensure that they get a good life. Similarly, earthly natives are determined, hardworking, and patient to achieve better outcomes. They are relentless in their effort.         

Earth represents the late summer season when fruits are ripe, days are longer with higher temperatures, forcing people to stay indoors, and take rest, and life appears to move lazily. Furthermore, Earth signifies the afternoon when people tend to be sluggish after having their lunch. Similarly, earthly natives are less active and cherish sitting in one place like a couch or an armrest chair. Besides this, the Earth is the heaviest and slowest mover among the five elements. Thus, earthly natives move at the turtle's pace, speak slowly with gravitas, and have a deep voice. These natives communicate and respond at their own pace. So, if you send an email to them, then don't expect an immediate response. Their ability to listen calmly like the slow-moving Earth makes them good listeners.

Earth represents the stomach, spleen, and pancreas because, like a mother, these organs nurture and feed other body organs with nutrients and power to perform their respective function. 

The stomach is responsible for the digestive system of the body, whereby food is digested and absorbed. This signifies that these people are open to new thoughts and ideas. On the contrary, if they binge, then it leads to obesity and laziness. Consequently, they struggle to appreciate and comprehend new ideas and initiatives. Moreover, the Earth's inherent energy movement is in the downward direction towards the core due to its gravitational pull. Thus, these natives often have protruding bellies falling downwards.      

The spleen's primary function is to filter our blood by removing old, malformed, or damaged red blood cells. Similarly, earthly natives like the spleen can transform slowly with time; they can discard old habits and adapt to new ways of life. In sales, selling half-hearted ideas or window-dressed old ideas to an earthly buyer will be caught and discarded. These buyers keep their 'crap' filter active and switched on.  

Like a mother, the Earth generally represents relationships, harmony, and patience. This allows these natives to be good at building and maintaining relationships with friends and family members. Furthermore, the constant churning underneath the Earth is carried out slowly and calmly by amalgamating many layers and items. This implies that earthly natives are collaborative and gel with others easily. 

In sales, these sellers prefer bottom-up engagement, underpinned by their ability to build and maintain relationships. In terms of approaching a sales territory, they prefer farming because their risk appetite is low, and slow churning or status quo is their mantra. The rapid and cutthroat environment is overwhelming for them.

Earth represents fear, fixation, and relentless effort because any imbalance in the stomach and spleen causes the mind to be unstable and wander from one thought to another, leading to obsessive thinking and constant worry. Besides that, any imbalance in these organs disrupts their continuous effort in supplying energy and nutrients to other organs. In sales, fear of failing haunts earthly sellers. So, to overcome that, they put relentless effort to win a deal. Their fixation on not failing at any cost gives them a higher desire to succeed. When a deal is lost after putting in enormous effort, they start worrying about the future and drive them to a state where they get overwhelmed by it and become indecisive. Earthly buyers prefer long-term instead of short-term contracts because they are sluggish, and the status quo gives them comfort and security. Moreover, they don't cherish rapid changes in their environment like an airy or a fiery buyer. Positioning a short-term deal to an earthly buyer is futile. 

Earthly natives are deceptive because the Earth represents the stomach, which needs a constant food supply. To gather resources like food or money, often these natives will employ deception and cheating. This trait is primarily prominent in earthly natives and to a lesser extent in metal and airy natives. 

Earthly natives have well-built body with thick calves and large muscles in men and breasts in women. They have a thick nose bridge, eyes are wide apart, the nose tip is round, and the stomach is round. In general, they have roundness and plumpness to their facial features.

Applying the Astrological lens, Earth represents the South-West direction. This direction is owned by the North Node of the Moon (Rahu in sidereal astrology), which signifies a tendency to evade and win without principles. Besides, earthen attributes like cold, calm, laziness, service for masses driven by a bottom-up approach, planning, and relentless effort are signified by Saturn.    

Note: Earth moves slowly around the Sun compared to Venus and Mercury. Earth, Mercury and Venus take 365.26, 87.97 and 224.7 days to complete one revolution around the Sun.  Saturn is the farthest and the coldest planet in sidereal astrology and takes 29.4 years to revolve around the Sun. In Sidereal Astrology, Uranus, Pluto, and Neptune are not considered for this analysis. 

More can be read in the book at amazon.com

Why TPG Stock is on Rise after FY22 Results

 

Big Mac Test for Price Check on Internet Services in Australia

 Big MacTest for  Price Check on Internet Services in Australia 

• The Big MAC Index test is a well-known benchmarking tool to test the price parity of services across the globe. 
• Applying the same to high-speed internet available in the UK, New Zealand and Australia, it has become obvious that Australians pay more for similar speed in comparison to the other two countries.

 

Source: Economist.com

Optus on Recovery Path from Cyber Security Attack

Has Optus on Recovery Path from Cyber Security Attack   

Quick Snapshot of the Performance:

•  Optus is facing multiple challenges. While it was trying to recover from the losses it suffered during the COVID pandemic, it was impacted by a data hacking issue in September 2022. 
•  This incident has shrunk their brand equity, and customers have lost faith. Hence, 65K customers have churned; in particular, the Mobile business suffered at least in the short term.
• Optus have recovered from its loss of 65K in 1-2 quarters, which is not only surprising but commendable. It is worth pointing out that the price rise has assisted in cushioning the effect.
• Having said that, the data hack has impacted their brand equity and has further strained their finances and balance sheet. 
• Singtel board and exec team need to make a call if they can recover the brand equity or if it is time to rebrand or sell the business, or increase its MVNO or white label, like Amaysim.

Q3 FY23 Story from Numbers 

• Impact of cyber attack contained within Q3FY23, positive net connections from Dec 2022. 
• Revenue has slipped, not a surprise, with 65K subscribers lost to the competition and recovered, so to get new customers and win back a lot of incentives (like price discounts) had to be given, hence this impact (revenue numbers are not shared, only % is highlighted). 
• EBITDA has improved, driven by growth in mobile & fixed, assisted by the price rise in Q2 and recovery in roaming.
•  Cost synergies from Optus Enterprise integration. 
• Amaysim is leading the AU MVNO market.

Impact of Cyber Attack   

• The cyber attack's impact (Sep 22, 2023) is addressed at a war pace. 
•  The no of subscribers lost (65K) is not seen in the final numbers.

How the Singtel Stock is Performing 

PE is above the global average and in the growth range, suggesting the stock has growth potential despite its downward trend. 

Source: Google Finance, Singtel.com, AFR.com, IBIS World, WSJ, 

Why Adanis Stock is Still Overpriced

Adani Stock in Perspective:

PE today is 94. Before the Hindenburg report it was > 254.

Valuation Guru- @AswathDamodaran highlights his view on Adani stock. 

According to him, the stock is overpriced even after the Hindenburg report impact. He values the stock for Rs 947. On Jan 1, 2023, the stock was trading at Rs 3858 and PE around 254. 

Today the stock is trading at Rs 1719 and a PE of 94. 

Background:

Adani Group which was established in 1984 has become a conglomerate of infrastructure companies in sectors like airports, shipping, logistics, power generation (solar), and defence.  

It's well established that infrastructure companies are about high volume and low margin, where with ageing returns get better, unlike telecom where returns diminish with ageing. While the Adani group had an astronomical rise from 2021 onwards where revenue grew by 112.70%, its margins were low at 3.4%, which is on the lower side as compared to other companies in this sector. 

Adani group has built a good reputation for executing on time like commissioning the largest hybrid power plant in 9 months or successfully managing the Mumbai airport. To date, all the companies in different verticals have been managed well and the market has put faith in them. 

Rise and Connection to PM Modi:

Adani and his family's close connection with Prime Minister Narendra Modi go back to when Mr Modi was the CM of Gujarat from 2001 to 2004.  Today the opposition parties claim that the growth of the Adani group (venture into defence, airports, and power) is indirectly driven by his proximity to PM Modi.  Gautam Adani, the chairman of  Adani Group became the 2nd richest person at the beginning of 2023.  

There is an element of truth in this narrative and that can be highlighted by a few examples.

PM Modi is a doer but likes to control things so that he can execute things the way he wants. He tends to select the same people for new assignments with whom he worked successfully in past (like Gujarat). Ex the architect of the new Parliament and Kashi Vishwanath Corridor is the same person who built the new secretariat of Gujarat, he handpicked the CM of Haryana with whom he worked as a prachaark. Similarly, he picked the Adani group for multiple new projects because he trusts them in delivering the way he wants (large scale, excellence, timely execution, courage).  This is in line with his working style and persona, which can be read in my book or here. 

Fast Forward to Feb 2023:

With this background on Adani and their close connection to the Government why the stock is trading at a PE of 94 when most infrastructure companies at the most will trade at a PE of 15-25 at the most? 

The answer to this lies in the opinion made by the market (fund managers, analysts) that, for the Adani group to grow at a rapid pace it needs the blessing and support of the current government in particular the PM. With only 15 months left to the next general election and opposition in disarray. It is clear that the market is factoring in that PM Modi is going to win the next general election and will come back as PM in 2024. This way the group's growth will be unhindered until 2029. In the stock market time span that's a good period to invest and make money. 

Similarly, Aswath Damodaan has an interesting conclusion on Adnai's stock valuation which is worth pointing out. 

Even with a further share drop, I am not tempted to buy shares in Adani companies, and it has little to do with the Hindenburg report. I have likened buying shares in a family group company to getting married, and then having all of your in-laws move into the bedroom with you. Investors in family group companies, no matter how honorable the family, are buying into cross holdings, opacity and the possibility of wealth transfers across family group companies. Those risks increase, if the family group companies are built around political connections, where you are one political election loss away your biggest competitive advantage. It is true that at the right price, I would be willing to expose myself to those risks, but it would require a significant discount on intrinsic value, and we are not even to close to that point yet. In short, I will watch this tussle between the Adani Group and Hindenburg from the sidelines, with less interest in the firm and more in what changes it may (or may not) bring to business, investing and regulatory practices in India.

Finally, I can't make sense of any other economic reason, why the stock is still overpriced at Rs 1719, other than what I have outlined above.

How NBN Could be Profitable in FY25

How NBN Could be Profitable in FY25.

Background:

• Losses are booked for the last 6 years and are anticipated to continue until FY24. 
• Depreciation and Amortisation are a drag on the NPAT and will continue in the $2.9-2.5 Bn range. 
• WACC will be around >=2.97% 
• Revenue increase (less idle network) is assumed to be 4-5% YoY. 
• Cost is anticipated to increase by 5-6% in FY23 and FY24. 

How the Govt and NBN can make it profitable:

• Increase the wholesale price via SAU
• Reducing the serviceability of debt (this is now executed, where serviceability has been reduced from $1.47 Bn to $0.37 Bn per year)
• migrating <= 50 Mbps tiered users (78%) to >=100 Mbps high-speed internet,
• by applying these levers, it can book a profit (NPAT) in FY25, even with a 25% idle network. 

My previous post on why the government is worried about NBN after FY23 H1 results can be read here

Todays NBN Result is Worrying for the Government

H1 FY23 NBN result is worrying for the government. 

Reason:

• The uptake by new subscribers is nearly stagnant at 85Mn connected premises (same as FY22) and is moving at a snail's pace. 
• 
  With NBNs net growth being negligible, suggesting forces of attrition are at play and with 10K customers switching to Starlink, it is not helping its cause either. 
• NBN is facing severe headwinds from 5G, Starlink and other fixed-line players, hence there is a twofold push by them. One is to increase the wholesale price and the second is to get regulatory protection from ACC to guard their market share against 5G and other players.
• Today if NBN is sold it will get a price of $19 to $25 Bn (the lower end is realistic) which is less than the contributed equity of $29.5Bn. 
• The government has committed to the electorate that it will upgrade FTTN/B to FTTC/P and increase the penetration of high-speed internet and make it affordable. Their intent is to make high-speed internet in Australia to be at par with OECD countries and get recognised as a leader in the digital enablement of the economy. Hence they have shelved the privatisation plan until 2025 or the next election.  
• With today's number, the longer the government wait, there is no guarantee that this nation-building asset facing heat from the market forces will command a higher sales price. In fact, the risk is, that it might be sold at a lower price, putting more pressure on the government's off-balance sheet item
  (off-budget spending driving inflationary)
• Having said that, by delaying privatisation government will fulfil its promise to the electorate in 20202 by enhancing its global internet ranking, high-speed penetration and CX.

The good news is:

• The good news in all this is that their EBITDA margin has increased from 58% to 69% (the highest in the telecom ecosystem ) underpinned by milking high-speed tier (Pricing strategy is working), increasing business penetration and reducing OPEX (like subscribers cost).
• 
  

Source: NBN Co, Google, AFR, ITnews, ARN News

Telecom Industry Evolution - 1990 to 2023

 Telecom Industry Evolution - 1990 to 2023

elecTelecom Industry Operating Model Evolution - 1990 to 2023

From Linear to Agile

Telecom Industry Performance -2023 

Telecom Industry Growth - Spectrum 

Organic and Inorganic

Telecom Industry - Todays Setup and Building Blocks 

Why the Government had to intervene in Vodafone Idea

 Why the Government had to intervene in Vodafone Idea  

Shareholding of Vodafone Idea

My previous post on Telecom Industry in India - Oligopoly to Triopoly

Source: Ventura, BSE

Open AI - Why Google is Threatened

 Open AI - Why Google is Threatened

If search without AI was an order of complexity - one, then search with AI is like an order of complexity two. Google is now launching its own #AI chatbot - BardAI which will respond to complex queries instead of simple questions served by google doodle. AI is now venturing into more complex tasks; hopefully, more players will participate and emerge.

More info on Open AI can be found here

State of IT Services and Software Industry - 2023

State of IT Services and Software Industry - 2023 

Digital Transformation is about Ceasing Revenue Debt

 

My other work on Digital Transformation can be found here