Automation and Consolidation – New Trend in Indian Telecom

The disruptor will always come with breakthrough innovation. In the Indian Telecom industry which is now 23 years old [since private operators were allowed to operate] Reliance Jio Infocomm introduced a new concept of electronic consumer verification known as eKYC authenticating the consumer with the world’s largest Biometric database. Idea Cellular’s eKYC Automation process has reduced Sales, Marketing and Admin cost by a whopping 21%. Earlier telcos wanted to staff more people in the subscriber form collection and verification process in attempt to drive faster subscriber activation yet despite this subscriber activation time ranged anytime between 4 hours to 2 days. Additionally the EKYC process allows telcos to have better control on subscriber quality and align trade incentives accordingly. We expect this to (more…)

Jio Kills Cash Registers of Airtel, Vodafone, Idea Lobby

Jio’s business case, at some level, needs the support of an industry size that is materially larger than what it is today. Jio has a reasonable business case in a market where the other incumbents Airtel, Vodafone and Idea – A-Vo-Id lobby has one.

Jio is well funded by its parent and its discounting model is hurting the A-Vo-Id Lobby and it can potentially drag the industry size down to such low levels in the near term that raising it to the needed for a reasonable business case levels within a reasonable time frame may become near impossible.

In the Worst Case a 60%+ yoy decline in India wireless EBITDA levels of the industry (ex-Jio) in FY2018 to under Rs 200 bn levels. For an industry (more…)

Only 10% of Idea Cellular Users Consume More than a Gig of 3G/4G Data

Idea 4G CustomersThe management of Idea Cellular stated that only ~10% of consumers are on packs of >1GB on 3G / 4G LTE networks in a month / 30 day cycle. Hence the higher allowance for high usage packs will not by itself result in sharp ARMB decline.

Idea carries the second highest data traffic in the industry by garnering 20.5% data RMS [Revenue Market Share] in FY16, which is higher than its overall RMS. Its incremental data RMS was 27%. Idea deployed close to 40,000 3G/4G sites in the past year in addition to (more…)

Largest Telecom Spectrum Auction Announced – Big Blocks in 2.0GHz+ on Sale

The Indian Department of Telecom (DoT) has put out the Notice Inviting Application (NIA) for auction of seven spectrum bands starting from 29th September 2016. The spectrum bands include 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz constituting a total of 2356 MHz spectrum with the largest chunk in the 700MHz band. This auction is the Largest ever Telecom Spectrum auction till date in terms of quantity, quality and price of spectrum being put on (more…)

Why Airtel / Idea Cut Mobile Data Rates on 3G/4G Packs ?

Idea 4G Rate DropAirtel and Idea recently announced price cuts / Increased Benefits on Pre-Paid 3G / 4G Mobile Data Packs. They have announced steep price cuts on entry-level and high-volume data packs. We expect Vodafone to follow suit soon. Effective cuts come essentially in the form of higher data allowance on smaller packs at one end and higher volume packs at the other end. Effective data realization (per MB) cuts range from 20% to 40% on different packs.

Idea and Airtel have a very Smart Analytics team which suggest the dynamics of pricing in the Indian Wireless market. Both the companies have not touched packs with monthly allowance between 300 MB and 1.5 GB which are the (more…)

Slowing growth of Data – Voice Cannibalization in India

Mobile Data growth has slowed down meaningfully for operators with data ARPU’s flattening out over the past 3 quarters despite the massive rollout of services from operators. While this could have been palatable if the base were high enough, such a slowdown on low data volumes overall is a worrying trend. We believe while realization decline is necessary for increasing usage, education of users and need creation for internet use would be the key to pushing growth of data usage going forward. (more…)

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