The management of Airtel in an Analyst call told that 2G Voice prices are still trending up and there is potential for a 10-20% increase from current levels. In 3Q, there has been a slight increase as per management, with okay volumes.
On Mobile Data
Airtel Mobile Data trends are good too – it is around 10% of total wireless revenues now. On revenue cannibalization, while SMS loss is a risk, current data ARPUs are substantially higher at around Rs 70 vs SMS at Rs 15. Airtel Management said that sale of data packs brings in Rs 100 per user, versus SMS ARPUs of Rs 15. However, such data driven margin improvement is not visible in any of the emerging markets. The company will participate in the forthcoming 900Mhz spectrum auction and intends to rollout 3G services on the same as we have already highlighted in a case study of Idea Cellular and Reliance Jio Infocomm.
Airtel – Reliance Ji Infocomm Deal
Airtel Management for the first time spoke on the Reliance Jio Infocomm deal and said that it is largely an MoU
at this stage “to provide a framework for future collaboration“. There are no financials as yet – but the focus is to exploit 4G growth in the future (both TD and FDD), which could be an incremental revenue source. They also stated that creating a “collaborate supply chain” will see genuine cost savings.
Infrastructure sharing in this deal is going to be implemented at “market prices“, per management. So, overall no pressure on tower / fibre rents is expected. Also, the infrastructure sharing could involve Bharti Infratel’s and Indus’ towers too.