Idea Shifts Focus to 3G Utilization, Reduce MicroWave Backhaul

Idea Cellular 3GPlain Vanilla Wireless Operator, Idea Cellular is bullish on data growth and data revenue growth. Its current 3G utilization rates stand at 20% to 40% across circles. Idea’s focus is to increase the utilization rate by driving up the volumes. Realization will be the focus when utilization is ~60% to 70%. For an incumbent operator like Idea, the cost per MB is lesser; incremental costs are low. Voice infrastructure is being used for data. Thus the customer acquisition, spectrum, backhaul and support infrastructure is already in place.

Data Revenues for Idea – Rising
Two years ago, SMS and VAS contributed over two-thirds of non-voice revenues, which were15% of total wireless revenues. Data contributed less than one-third – i.e., 5% of total wireless revenue. Today data is ~10% and non-voice contribution is roughly the same at about 15-17% of total wireless revenues.

Rising Data Volumes Call for Optical Fiber Backhaul
We first published an excerpt of the findings of our Research that Indian Telecom was relying heavily on MicroWave Access for Backhaul Connectivity. Backhaul can be classified into fiber and microwave. As in towers, sharing prevails in fiber. Idea has 82,000km of fiber laid. In microwave, currently for every tower fibred, Idea has 10 towers operating on microwave. It plans to get this number down gradually to six.

Idea Shrugs any Immediate LTE Threat
Idea Cellular Management firmly believes that the LTE market first has to evolve and show that there is demand; only then would the company be comfortable investing in LTE technology. Idea has acquired 60MHz of 1800MHz spectrum in the current auctions, of which 45MHz is contiguous and will be used for LTE. Idea can deploy FDD LTE in seven circles using 5MHz of new spectrum acquired in each circle. Idea has already invested in LTE spectrum; backhaul (fibre) is an ongoing process and it will be used for LTE. Only radio frequency is an additional investment. LTE technology, as well as handset adoption, is still three to four years away, in Idea’s view.

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