2G/3G Data Revenue to Grow 40% YoY

3G business in India currently has negative returns, but should turn positive by F2016. Airtel and Idea reported sequential nonvoice revenue growth of 5% and 13%, respectively, in F3Q13.

Operators have been inching up their 2G data tariffs, while 3G data tariffs have come down by ~7x since the beginning of 2012. Data volumes in MB have grown by over 20% in the last two quarters, after a slow start, and the decline in data ARMB has been arrested. 2G/3G data revenues will be the largest contributor to data revenue growth, with annual growth of ~40%.

Smartphones / Data-enabled handsets priced within Rs5,000 help increase data traffic.

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