More deleveraging initiatives expected to unfold. We value Globalcom at 5.5x FY16E EV/Ebitda (in line with average for global peers). It has leadership in carrier, enterprise, and voice businesses.
We assume ~Rs 6,000 crore from securitisation of tower rentals (likely to accrue in H2CY14). Major assets include 135 acres at DAKC (Dhirubhai Ambani Knowledge Centre), Navi Mumbai, and 4 acres of prime property at Connaught Place, New Delhi. DTH has 4.8 million subscribers, valued at 20% discount to Dish TV
Higher FCF generation to further improve balance sheet. Higher Ebitda and capex-light strategy to generate better cash flows. Going forward, Ebitda growth will be led by GSM outpacing CDMA (which has stabilised). RCcom has low regulatory payout at $441 million (considering absolute payments over 10 years). However, present value (PV) is just $255 million. Upfront payment in 2016 is likely to be $65 million
If RJio opts for underlying network of RCom (2G intra-circle roaming arrangement for voice capability). Stable regulatory environment and consolidation among Top 5 telcos (may lead to better tariffs).