Idea Cellular management hosted a conference call today to discuss the recently concluded spectrum auction. The company successfully renewed its crucial 900-spectrum in key circles. Airtel and Vodafone both extended their 3G spectrum footprint to 21 and 16 circles respectively, and have surpassed Idea on revenue coverage under own 3G. Airtel has stolen a march over both Vodafone and Idea, by picking up the maximum amount of 900-spectrum.
Idea management said that data volumes (Terabytes or TB) may grow at >100% CAGR over next 2-3 years . This would lead to a materially higher revenue growth trajectory for Idea and the whole industry, provided data realization or ARMB does not fall much below forecasts. Idea reiterates the view that India is not yet ready for Prime-Time 4G LTE Mobile Data mass market.
Idea indicated that 4G rollout (FD-LTE on 1800 band) would start from FY17 in select circles (Karnataka appears to be a leading 4G candidate). Capex will increase yoy in FY16, due to 3G launch in Delhi/Mah/Kolkata, as also due to
2G network reconfiguration due to replacement of 900-equipment with 1800. Mgmt. clarified there would not be any write-off of 900-equipment, as the existing electronics will be reused. Idea expects 2G capex to end by FY17, and expects new 4G capex to offset reduced 2G capex.
The Big 3 Operators profile customers’ handsets on network capability and has lot of back-end analytics to crunch the potential that lies ahead unless Reliance Jio disrupts the market heavily, which is unlikely going by its track record in telecom business.