Indian Telecom Voice $30Bn Market, Mobile Data Game just Began – Himanshu Kapania

Himansu Kapania - CEO Idea CellularHimanshu Kapnia, CEO Idea Cellular was at the Morgan Stanley 15th India Summit and he shared his perspectives on the Indian Telecom – Voice and Data Markets.

On Indian Telecommunications Voice Market

  • Over the last 2-3 years Indian Telecom sector witnessed huge battle on the competition front as result of which there are 700 mn mobile subscribers on the basis of VLR
  • Mobile Voice Traffic continues to grow strongly, with a industry-wide growth of 20%
  • The Voice Market is under-penetrated with not more than 500-550 Mn actual users and there is scope for at least 300 Mn additional users to enter the market
  • Minutes of Usage has been Improving. Idea reported 300 mins/sub a year ago and last quarter it reported 400 mins/sub
  • The Indian Telecom Voice Market is roughly of the size of $30 Bn when prices have been suppressed.
  • Overall voice market will grow, so should operators revenue & margins should increase as well.

On 3G in India – Data Game has Just Began

  • After the 3G Auction in 2010, Idea till date has launched 17,000 3G sites of its own.
  • SmartPhones required to aid 3G usage and Idea has launched several handsets. Smartphones prices are falling and the entry level 3G Android Smartphone price point is now at USD 60
  • New customers are entering the market for data – 15 months back Idea had < 8mn active 3G Customers and today it is 26Mn active data users, approximately about 20% of Idea Cellular subscribers. Expects improvement in users and usage / subscriber
  • Expects Non-Voice to reach 20-25% in the next 2 years
  • 3G investments ahead of time and 3G capcity utilization will improve Idea’s margins further

Idea Cellular, an Aditya Birla Group Company has been very bullish on the Indian Telecom story. It has consistently invested 600-800 Mn dollars in the last few years barring Spectrum fees. Idea Cellular covers 2/3rd of Indian Market with leadership positions (Among Top 3) in 13 circles. Its Revenues from 13 circles represents 86% of its overall revenues. 9 circles deliver 14% of Ideas revenues and the company has a strategy to rise in these circles as well. Idea has 20% RMS in these 13 circles and on a Nationwide basis its RMS is 14.86%.

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