18th October 2007 : Leadcom voted "AIM International Company of the Year for 2007"




Main Web Site : http://www.leadcom-is.com/

Investor Relations Email : investorsinfo@leadcom-is.com

Lots of activity in India but no contract announcements from Leadcom! Anyone have a timescale as to when we might hear something or are the suppliers all using their in-house installation teams?

Smaller contracts will only be announced if they have major strategic implications. The pointer will be Q3 results due in November.

The delays on the BSNL tender are now really hurting BSNL and their ability to add new subscribers.......

http://www.thehindubusinessline.com/2007/10/12/stories/2007101252931200.htm

GSM mobile cos add 56 lakh subscribers in Sept

Our Bureau New Delhi, Oct. 11

GSM cellular operators added 56 lakh new subscribers in September, taking the total to 15.33 crore mobile users across the country. While Bharti Airtel added over 20 lakh new mobile users, Vodafone Essar increased its tally by 15 lakh. State-owned BSNL could get only 5.9 lakh new subscribers as it is still struggling with capacity issues.

Vodafone has now emerged as the clear number two player in the GSM cellular market with 3.55 crore subscribers, ahead of BSNL, which has just over 3 crore . Bharti Airtel continues at the top without much challenge with nearly 4.9 crore mobile subscribers. Other operators such as Idea Cellular are far behind with less than 1.9 crore subscribers.




In terms of geography, Andhra Pradesh is now the single largest GSM market with 1.13 crore subscribers, overtaking the previous hot spot Delhi. The second biggest market is Maharashtra, which has 1.12 crore subscribers. Tamil Nadu, Gujarat and Karnataka are the other States in the top five markets in terms of subscriber base. The growth rate in the four metros has tapered. In fact Punjab and Haryana have more mobile users than Chennai and Kolkata.

Though the growth in September is slightly lower than August when 59 lakh new mobile users were added, market watchers expect the growth rate to be maintained, with operators targeting to reach 50 crore subscribers by 2010. However, crucial policy decisions on spectrum allocation and guidelines for new applicants for telecom licences is expected to be announced this month and this could have a bearing on the growth rate going forward.

Good post from AFN coming from the Ericsson update, which although not good news for Ericsson holders due to the loss of higher margin items, and therefore profits warning, is good news for Leadcom holders, as is said, new network rollouts are "dominating" things and will continue to do so. Although this kind of work is lower margin for the likes of Ericsson this is the bread and butter for Leadcom, and so, the future looks very bright for LEAD.



JM Barrie100 - 16 Oct'07 - 11:37 - 6395 of 6396

Just listened to Ericsson's press conference - all 45 minutes of it.

The bottom line seems to be that Ericsson seems to have completely screwed up estimates on the split between network rollouts, expansion, software upgrade. The latter two result in higher margin (software upgrade can result in margins of 90%). Expected to be a third/a third/a third, in fact expansion and upgrade sales fell, but network rollouts increased - 'dominated' is the word used by Ericsson.

As for the future, I quote 'new rollouts will dominate for several quarters'.

So in theory very good news for LEADcom, turnover should be in line with forecast or even higher, the main concern is whether competition has reduced margins for LEAD.

Leadcom Named AIM International Company of the Year

October 19, 2007, Hod Hasharon, Israel - Leadcom Integrated Solutions Ltd. ('Leadcom' or 'the Company', AIM: LEAD), a leading international provider of innovative telecommunication solutions, is delighted to announce that it has been named AIM International Company of the Year.

This award is presented once a year by AIM, to companies incorporated outside the UK who demonstrate all round excellence.

Leadcom thanks all investors, analysts, fund managers and investment professionals for selecting it for this award.

Buyers around this morning

Not only Reliance going to be installing all new GSM equipment in future, it looks like Tata Teleservices will also be doing the same. More opportunies for the future in what is one already massive market in India.

http://www.thehindubusinessline.com/2007/10/23/stories/2007102351990100.htm


Tata Tele jumps on the GSM bandwagon

Seeks DoT nod to deploy mixed technology

Mixed advantage

The higher average revenue per minute that GSM operators earn is attracting CDMA players in this segment.

Entry will enable CDMA operators to tap into nearly 10 million subscribers who change their operator every month.

Our Bureau

New Delhi, Oct. 22 Tata Teleservices has become the latest CDMA operator which has approached the Department of Telecom seeking permission for offering GSM-based cellular services. The move follows DoTs decision to permit companies with unified access service licence to deploy mixed technologies.

We look forward to a level playing field in the industry and await clarity on all aspects of this new announcement from the authorities, a Tata Teleservices spokesperson said. The company has nearly 20 million subscribers at present on its pan-India CDMA network.

Reliance Communication had also taken advantage of the DoTs policy and paid Rs 1,651 crore to the Government as the entry fee to offer a pan-India GSM service. Shyam Telecom and HFCL, the regional CDMA operators, have also got the nod from DoT to offer GSM services in Rajasthan and Punjab respectively. All the four companies who have applied to offer mixed technologies are CDMA operators.

Though GSM operators can also now start offering CDMA-based services, none of the existing players has so far taken a plunge in that direction. One of the reasons for the increasing interest in the GSM technology is the higher average revenue per minute that operators such as Bharti Airtel and Vodafone earn. While CDMA operators earn about 80 paise a minute per user, GSM operators get over Re 1.

The other reason is the higher number of churn in GSM segment. An entry into GSM segment will enable the CDMA operators to tap into nearly 10 million subscribers who change their operator every month. With DoT also looking into allowing number portability (where users can change operator without having to change their number) the prospects of getting access to 160 million GSM users is tempting. The third reason is that the Government is close to allocating additional GSM spectrum and all these companies want a piece of the air waves to increase their valuations.

Spectrum allocation

It is estimated that the DoT will have about 25 Mhz of spectrum by November and there are nearly 40 claimants to it. While the DoT has categorically told the operators who have applied for mixed technology that the allocation of spectrum will be based on availability, by paying the fee they have placed themselves at the top of the queue. Once Tata Teleservices pays the fee, it will get the number 5 spot when spectrum is allocated. Only those companies which are serious enough to sink in Rs 1,600 crore and take the risk of getting spectrum one or two years later can afford to take the licence right now. The advantage, however, is that once you have a licence then the company could even apply for 3G, WiMax or any other new technologies that are coming up, said a market analyst.

Q3 Financial and Operational results, Monday 12th November 2007.

Nice to see its on a Monday, which means they must be planning plenty of meetings during the rest of that week.

Looks like India is going to have the 3G boost now. Raja says "Dec" for allocation, and services commence in mid 2008......going to mean lots of additional work coming up.


http://www.thehindubusinessline.com/2007/10/26/stories/2007102650900400.htm

3G mobile services may be available by mid 2008

New Delhi, Oct. 25 Mobile users may be able to get the much awaited third generation services by middle of 2008, according to the Communications and IT Minister, Mr A. Raja.

Speaking at the 3G India Forum, the Minister said that spectrum will be released by the Defence by the year-end for both 3G and existing 2G cellular services.

Third generation services will enable mobile users to access high speed data services such as movie on demand and mobile TV on their handsets. However with operators showing more interest in getting 2G spectrum first, 3G services has been on the backburner.

The Department of Telecom is yet to finalise the policy for 3G services even though the telecom regulator had given its recommendations a year ago.

Mr Raja said that a key hurdle to the roll out of 3G services is the availability of spectrum.

An institutional mechanism has been put in place for early vacation by the Defence. We are hopeful that some spectrum for both 2G and 3G services will be vacated by the end of this year and this could pave the way for a roll out of 3G services by mid next year, Mr Raja said.

The Minister had earlier said that spectrum would be available by November. However, Government sources said that the Defence was not willing to release spectrum unless an alternate medium for communication was ready.

They said the Defence might vacate 3G spectrum first because they were not using the band at present while their equipment was still working on the 2G frequencies.

Interesting, wonder if any of this will come Leadcom's way ;)

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/October/business_October660.xml&section=business&col=

Israels Bezeq approves Pelephone GSM investment (Reuters)

28 October 2007

TEL AVIV - Bezeq Israel Telecom BEZQ.TA, the countrys dominant phone company, said on Sunday its board approved a decision by Pelephone, its mobile unit, to set up a 1 billion shekel ($251 million) GSM network.

Bezeq, in a statement to the Tel Aviv Stock Exchange, said Pelephone would soon choose a supplier for the UMTS/HSPA, or 3.5 generation, GSM network.

Pelephone is the countrys third largest cellular operator. It is alone among the three main mobile operators to use a CDMA-standard network, and is missing out on annual roaming fees that its rivals reap when their subscribers travel abroad.

The costly network migration would add roaming profits to Pelephones bottom line and allow savings on cheaper phones and maintenance costs.

Waking up a little today.......

50 billion dollars in Africa in the coming 5 years, kind of backs up the acquisition of Ytelcom by Leadcom.


http://allafrica.com/stories/200710291172.html


..................."Mobile specific taxes are levied in Ghana, Kenya, Tanzania, Uganda and Zambia" GSMA said in statement announcing the mobile industry plans to invest more than $50 billion in sub-Saharan Africa over the next five years. The plan is to provide more than 90% of the population with mobile coverage................

Well the market didn't like that. Plenty of buyers around @ these lower prices, don't hold anymore.
2517

you can say that again!

Currency issue was expected, the surprise is the finance costs, but thats life.

The part about CALA is badly worded imv, anyway, certainly on a day like today the market does not like badly worded statements which include issue that will give lower earnings, and so it falls.

Whatever, at least this should clear the seller out a bit quicker now. Still holding, and just added a load more :)

steveo, sold @ <64p a couple of weeks ago for a small loss, was regretting it as they went through 70p but happier now. PP I am also thinking of buying back in @ this level.
2517

Maybe I'll wait for the dust to settle, it's come off another 3p since my last comment.
2517

i too sold out about 10 days ago ..... somewhat prematurely i jumped back in at 54, so i hope the reality of the announcement is not as dire as the market seems to think ...... o'heads and costs are one thing, but more relevant is the importance of CALA to the whole, and that is something i do not know at all .....

PP - any thoughts on that?

From AFN, someone has worked it out and I'll not disagree.

"tunturiflyer - 1 Nov'07 - 15:43 - 6564 of 6565

In H1, the segment operating profit margin in CALA was 7.3%, compared to 16.4% in MEA, and 14.6% in APAC. Adding up the segment operating profits in all the regions you get $11.3 million, of which CALA contributed $1.7 million, i.e, about 15%.

So an optimist might think that prospects in MEA and APAC are so good, and the margins so high, why bother with low margin CALA, especially as there are some US players who are competiting in those regions.

What is more worrying is these comments about the rising expenses of an extra $3m. H1 operating profit was $8.095 million, a pretax profit margin of 9.5%. If they do $206 million, at this sort of margin, but lose $3 million in extra expenses, and say $1.7 million for no profit in CALA for H2, then it still means $15 million pre tax profit. Their tax rate maybe 31% for full year, (as per H1), so get about $10.35 million post tax, 5.2 million post tax, ($2:1) which I think is 4.2p a share.

so at 45.75 (current price) p/e would be 10.89 .... does not sound too demanding, but i wonder what the sector average is