3G mobile Data revenues in India for incumbents are incremental to Voice revenues initially because initial 3G adopters are relatively high-income subscribers whose telecom bill is a very small proportion of their total disposable income. These subscribers maintain their voice consumption despite incremental data usage (largely for entertainment and continuous Internet connectivity). These subscribers do not reduce their voice usage intentionally (however, there might be some unintentional reduction in favor of alternative data-based channels of communication). Hence, data growth drives increases in blended ARPU (without impacting voice ARPUs meaningfully). However, as 3G data proliferation accelerates (say, beyond 20% of total wireless revenues), incremental data revenues come from relatively lower income subscribers, who manage their telecom bills actively. Continue reading The Changing Trend of 3G Mobile Data Consumer in India
Idea Cellular is doing a better job of monetizing 3G as its revenue per 3G base station is c34% higher versus Airtel (despite having more metro centric presence Airtel has only 4% higher 3G subscribers versus Idea). Continue reading Is Idea doing better than Airtel in 3G Mobile Broadband ?
Plain Vanilla Wireless Operator Idea Cellular reported a whopping 103% yoy and 13% qoq growth in data revenues to Rs14 bn in Q4FY15. Data revenues formed 16.9% of wireless service revenues for 4QFY15, up from 10.1% in 4QFY14. Market leader Airtel which has adopted different strategy reported Data revenue growth of 70% yoy at Rs23 Bn in Q4FY15. Even though Idea grows on a smaller revenue base relative to Airtel, growth of 103% is certainly commendable. We understand Airtel’s reluctance to aggressively chase volumes on the voice side but do not see any valid rationale for sustained under performance on data revenue growth rates.
Idea Cellular’s Data revenue growth was Continue reading Idea Mobile Data Growth Faster than Airtel at 103% YoY
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.
In India, Mobile Data Service is already substituting traditional revenue streams like SMS, with data use per sub increasing 316%, vs a decline of SMS sent per subscriber by 34%, over the past 2 years.
With the upcoming launch of LTE on a large scale, incumbent operators [Airtel, Vodafone, Aircel] have chosen a middle path between making large investments to develop an LTE-based network and protecting their existing voice-driven businesses. While operators recognize the potential of the data opportunity, we see the level of investments to build data Continue reading Mobile Data the Key Theme for Indian Telcos in 2015 Leading Towards Convergence
Four years into the commercial launch of 3G in India, we have tried to analyze the impact of 3G on relative market shares of 3G versus non-3G operators in this note. For our analysis, we have looked at the cumulative change in revenue market share (based on operator-wise gross revenues reported by the TRAI) from Sep 2010 to Sep 2014. We have tried to cut the data in multiple ways to test if 3G has delivered on the competitive premise. Continue reading 4 Years After 3G Launch, Does 3G Spectrum Help Operators Win RMS ?