Idea Cellular’s Mobile Broadband Data revenue growth slipped materially. Data revenues grew 45.7% yoy (and 7.2% qoq), sharp deterioration from 80-100% yoy growth levels reported over the past many quarters. Volume growth slowed down to 75.8% yoy while realizations (ARMB) dipped a steep 17% yoy and 4.7% qoq to 22.3 paise/ MB.
Idea 3G subscribers base was 21.2 mn at end-3QFY16, up 1.6 mn qoq and 8 mn yoy. 3G data volumes grew 115% yoy and 3G data revenues grew 73% yoy. 3G now accounts for 66.4% of total data revenues. 2G data revenues have more or less stopped growing; yoy growth in 2G data revenues was a modest 11.2% yoy.
Reliance Jio Launch Pushes CAPEX Higher Again– In the last 9 months, there is yet another revision of CAPEX Guidance from RS 65 Billion to Rs 75 Billion for FY 2016. The extent of revision is a surprise; also, qualitatively speaking, this is the first time in many years that Idea management does not appear completely in control of its business plans as it has always been in the past and we have admired the management for the same.
Voice revenue growth trajectory slipped further to 9.7% yoy (on an IUC-adjusted basis; 4.4% on a reported basis) as voice realizations slipped further (down 2.8% qoq and 10.7% yoy to 31.8 paise/min). Even adjusted for IUC impact, voice RPM was down nearly 6.2% yoy. On the positive side, Idea sustained its industry-leading voice traffic growth trajectory with 5% qoq and 17% yoy growth in total voice minutes to 199.2 bn min.
We note that Idea’s VLR ratio jumped up materially in 3QFY16. This number moves up and down depending on the number of in-roamers in a specific period. Increase in in-roamers may also reflect further network shutdowns by challengers and should benefit Airtel and Vodafone as well.