Reliance Jio’s free pricing blitzkrieg has triggered the largest round of consolidation in the telecom industry. Vodafone and Idea Cellular are reportedly in talks for what could possibly be an all share merger deal; Vodafone indicated that its 42% stake in Indus is excluded from any potential transaction. Such an agreement would combine the 2nd and 3rd largest domestic telco operators, commanding ~40% revenue and 35% subscriber market share, ahead of Airtel’s 31% revenue and
Idea 3G
Only 10% of Idea Cellular Users Consume More than a Gig of 3G/4G Data
The 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
Why Airtel / Idea Cut Mobile Data Rates on 3G/4G Packs ?
Airtel 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
Is Idea Cellular Challenged with 3G /4G-LTE Data Spectrum ?
The just in time execution telecom specialist in India Idea Cellular owns 3G spectrum (900 or 2100 or both) in all of its top-5 circles and nine of its top-10 circles (except Karnataka, where it owns LTE spectrum). Idea owns LTE spectrum (1800 band) in four of its top-5 and six of its top-10 circles. It owns either 3G or LTE spectrum in all of its top-10 circles and owns 3G and LTE spectrum in five of the top-10 circles. Idea’s 3G spectrum footprint covers nearly 80% of its revenues, LTE footprint covers 61%, 3G or LTE footprint covers 87% and 3G and LTE footprint covers 53% of its revenues.
Having spectrum is important of course
Idea’s Risk of Spectrum Renewal in 2015 Auction, LTE Delay A Risk ?
In the upcoming 2015 mega spectrum auctions, Idea Cellular has 900 Mhz spectrum up for renewal in 9 circles accounting for about 72% of Idea’s last twelve month (LTM) revenues. In 2 circles (Gujarat and UP (West)), Idea has almost no back-up spectrum to offer voice services and about 15% of its revenues from these circles would be at high risk if it is unable to renew the spectrum.
In the upcoming spectrum auctions in February 2015, 59 MHz of 900 MHz and 9.2 Mhz of 1800 Mhz frequency of Idea are coming up for renewal. If we take DoT reserve prices as the auction price, we expect total renewal outgo to be Rs172 bn for Idea following the auction.
Idea has significant gaps in its
Idea Cellular Data ARPU / Usage up 10% QoQ – Voice Lowers
Idea Cellular pure wireless services revenue growth accelerated to 21% yoy, a combination of 17% yoy voice volume growth (to 162.5 bn minutes; 3.5% ahead of expectations; down 1.7% qoq) and 3% blended yoy RPM improvement (to 45.9 paise / minute; 1.6% below expectations). Voice RPM declined 2.4% qoq and 3.1% yoy to 36.2 paise/min IDEA added 4.6mn subs in 2Q taking the total subscribers to 143.6 Mn subscribers at end of Sept-2014.
Idea Cellular Data business continues to fire on all cylinders
IDEA added 3mn data subscribers
How Vodafone Hiked Voice Tariffs in Jan/Feb 2014 ?
Voice continues to be the major Revenue Engine for Telecommunications Companies in India. Telcos move tariffs in India on a circle-by-circle strategy using Big Data Analytics to improve their ARPU realizations. Excerpts from our Database are as under on how Vodafone India moved its Voice Tariffs in the first 2 months of 2014.
Idea Keen on Renewing 900MHz Spectrum During Next Auction, Shrugs 4G-LTE Threat
Idea Cellular CEO Mr Himanshu Kapania and CFO Mr Akshaya Moondra hosted an Analyst call in which they highlighted the company’s strategy going forward.
On Spectrum
First, the company believes it is important to have a data offering for customers in the metro markets, and Idea’s top preference was Delhi. Idea chose Delhi because one additional block of 5Mhz spectrum was available, it is the No 3 operator by revenue market share, and it
How Idea Cellular Pre-Paid Tariffs Moved in Jan-Feb 2014 ?
Idea Cellular the plain vanilla voice operator hiked 2G Voice Tariffs for its large pre-paid subscriber base (95%) across 12 circles based on Big Data Analytics of its Billing Team so that the pinch is not felt on the pockets of consumer and yet Revenue Per Minute [RPM] goes up marginally across each circle. The Analytics team chooses the most optimal way to do this so that the company doesn’t lose consumers as well yet maximize the profit in the cluster / circle.
Vodafone ARPU at Rs 193, Gets 5 Million Active 3G Customers
Vodafone India reported a 2.9% QoQ increase in revenues – inline with Bharti India mobile’s 2.6% QoQ increase. MoU decline of 1.4% QoQ was lower than that of Bharti India (4% QoQ). Vodafone’s in-line result indicates continued improvement in business environment in India particularly with voice RPM hardening and churn reduction. Although data prices corrected sharply this does not signal a price war as price corrections are necessary to evangelise demand
Vodafone India Results Highlights
Subscribers Vodafone’s subscriber base grew 3.1% QoQ to 160.4mn during the quarter. Churn declined to 3.8% from 4.6% in 2QFY14.