The management of Bharti Airtel is optimistic about 3G Data Revenues which was seen at 20% q-q growth in Q4-FY2013. This should continue to grow, partly also driven by improving coverage. Current 3G coverage is at 30% of its 2G coverage. This means Airtel 2G/ 3G Data services will grow at double the Industry Average
Airtel management believe there is room for 2G and 3G data pricing to converge – for the end user, the technology (2G or 3G) which is being used for accessing data services is not relevant; however, rising 3G handset proliferation would give the company better flexibility in efficient use of spectrum. Airtel shrugs off any impact of scrapping of 3G Intra-Circle roaming arrangements because its 3G spectrum covers 70% of its Revenue Base.
The absence of interconnect on data as well as payper- use characteristics of the Indian market bodes well for the margins. Cellcos are still just access providers, though their role is likely to transform as data penetrates further and more applications come on board.
Airtel, like Idea Cellular is focused on pulling back promotional minutes in the system rather than taking up headline tariffs further, as current headline rates already imply a yield which is above the 34 paisa that telcos are realising on average for voice.
Airtel 4G LTE service is available in four markets, namely, Kolkata, Bangalore, Pune, and Chandigarh, Mohali and Panchkula. Initial experience has been good thus far, although coverage isn’t ubiquitous yet as 2300Mhz would need lot more sites. More cities where the services will be rolled out will be published soon here with coverage maps.