Indian Mobile Data entering phase of 2006-2010 Voice Business – Idea

Indian Mobile Data marketPure Play Wireless Operator, Idea Cellular believes that wireless internet penetration at less than 31%, mobile data will be the next big opportunity for operators. Current data expansion phase is similar to the 2006‐2010 voice expansion phase wherein telecom operators improved coverage and dropped prices to accommodate a substantial jump in subscribers, leading to revenue growth. Idea believes there are only 4‐5 serious operators in the data space including Reliance Jio and with non‐top 3 players cornering 26% RMS, there is enough scope for a new player.

Mobile Broadband Data services offers good growth opportunity for telecom operators, but it will require substantial investments. Idea also highlighted that by FY18, the industry will put ~700,000 3G+4G BTS. Assuming the company maintains ~20% share, it will need to reach ~150,000 3G+4G BTS, rendering sustained investments in FY18 as well an imperative.

Will Just in Time Spectrum be Available for Data Services?
Idea’s management have perfected the Just in Time execution of projects. Even now they expect massive supply of spectrum arising due to harmonisation process, availability from defence and renewal of spectrum by marginal players, Idea believes spectrum will be available on tap. It also expects the spectrum price to correct over a period of time due to humungous supply. The company is planning to focus on acquiring 4G spectrum in its key circles of Gujarat and UP (W) and will acquire spectrum on just‐in‐time basis.

Idea on Reliance Jio’s Data pricing Puzzle
Idea expects Jio should refrain from predatory rates [No Onslaught / No undercutting / No Bleeding] as it could lead to low ARPU which may compress industry revenues. According to Idea, it is in the best interest of Jio best chance will be when the industry grows and it believes that the company will end up expanding the market which is beneficial for incumbents as well. Even though feelers across the Telecom sector is Jio will not go for massive price cuts, it is anybody’s guess as to what Mukesh Ambani will do at the last minute.

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