Airtel & Idea Cellular Data Grows 100% YoY – Network Expansion

Idea Cellular Data GrowthData Traffic for Airtel and Idea Cellular has shown growth of CQGR 18-21% which translates to about 100% YoY. Airtel’s Data per Cell Site / Month has increased from 31 GB to 65 GB and while that for Idea the Data per Cell Site / Month has increased from 20 GB to 40 GB. This number by itself may not present a full picture as it is skewed by differences in peak usage, geographical coverage, quantum of spectrum and ICR deals.

Airtel and Idea carry considerably higher traffic on their networks (on a per cell site basis) compared to international peers we don’t see unplanned capex on network outlay significantly to support current levels of data growth. Indeed, 3G networks remain severely underutilized (10-15%) and can be aided by vertical stacking, 3G shifts and dynamic coding.

Idea Cellular indicated that data consumption per subscriber grows (driven by video and heavy application-based usage), 3G uptake might improve. Thus, utilisation of the 3G network (which has sunk costs) would improve, which in turn would
cannibalise 2G data, leading to fewer capacity concerns on the 2G network. Furthermore, data carriage on 3G is more efficient than 2G, leading to better economics for the operators.

Indian telecom companies are currently investing in additional capacity to increase coverage rather than boosting capacity. They adopt a number of measures to optimize their Voice Network Utilization. Cell sites provide incremental capacity and coverage. If a larger landmass has to be covered which has limited subscriber density, it leads to poorer network utilisation. Airtel and Idea are amongst the top-ten operators in the world in terms of scale (network minutes). A combination of a large subscriber base and higher-than-world-average minutes of usage leads to better network capacity utilisation. Airtel reported 639,225 Minutes / Cell Site / Month and Idea Reported 447,675 Minutes / Cell Site / Month.