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…)

Blind Gaming by Incumbents Amidst Reliance Jio Launch

Mobile Broadband Vs VoiceGiven the impending threat of Reliance Jio entry, incumbents – Airtel, Vodafone & Idea have accelerated the pace of mobile broadband data network rollout in a blind game forgetting the Economics of Return on Investments. Cumulatively, they have added 72.8K 3G/4G BTSs over the past four quarter (total installed base of 172.5K), with Airtel having added 35.7K, Idea 19.8K and Vodafone 17.3K during the quarter. Idea increased its capex guidance to INR75bn (from INR60-65bn earlier), the third increase in capex guidance over the last 9 months (1.5x of initial guidance), on account of faster data rollout.

Two key debates would continue for the sector – 1) pricing vs volume and what it does to the market dynamics; and 2) capex intensity vs returns – how much is enough given the slowing mobile data growth [3G / 4G].

Idea which in the past has (more…)

TRAI NetNeutrality Regulations Impact on Airtel Wynk / Jio Mags – Play – Beats Apps

TRAI Net Neutrality Exploit WeaknessThough TRAI accepted / acknowledged most of our Regulations on NetNeutrality one of them is highly debatable and can create lot of controversy. In TRAI’s Consultation Paper [CP] the fourth question posed was – Is there any other issue that needs to be considered. We at DSLIndia have been tracking the Indian Telecom Sector for over 15 years and we know the pulse of each of the service provider. Our goal is to Maximize revenue to the Government and bat for high quality consumer experience. In this backdrop, we went into Out of the Box Thinking Mode and it is we who brought this idea to light to the officials of the TRAI to keep the entire Telecom Network Neutral and made the following suggestion, [Source PDF] (more…)

TRAI Regulation on Net Neutrality – Most of Our Recommendations Accepted

TRAI Accepts DSLIndia Recommendations on Net NeutralityTime for some self pat as TRAI accepts most of our Out of the Box Recommendations on Net Neutrality in India and structuring their final Regulations based on the core points we have highlighted in our compilation which is available here [PDF].

TRAI Recommendations released just a while ago on Net neutrality is available here [13MB PDF File].

Everybody have opposed Differential Pricing of Data Tariffs, so we will not take credit for the same, but here are some of the Unique Points which were addressed only by DSLIndia’s Telecom Analysts and acknowledged by the TRAI in its Regulations which are notified for Gazette Publication.

1. If you have read through (more…)

700Mhz Spectrum Auction Pricing Ir-Rational – Will Find No Takers

700 MHZ Spectrum AuctionThe TRAI’s recommended price – 20% premium to an overpriced 900MHz band – has made it a hard band to sell. The 900MHz band spectrum pricing (based on 2015 auction, where operators were fighting for business continuity) was result of overbidding. The amount of spectrum in the band is also limited, which further pushed up prices. However, with the availability of seven blocks, the 700MHz band will find limited takers at the recommended price.

Industry leader Airtel has a pan‐India 3G spectrum (except Kerala) and 4G spectrum is 14 circles. It has multiple options to add capacity spectrum (more…)

Airtel to Increase ARPU amidst Reliance Jio Launch

Airtel Vs Reliance JioBharti Airtel expects modest annual increases in blended ARPU in coming years led by data (assuming rationality on the part of Reliance Jio). Airtel admits voice ARPUs will continue to dip but does not think cannibalization of voice by high-speed data is a risk, likely underestimating this voice ARPU reduction risk. Airtel thinks that higher ARPU subs (post-paid or high-end pre-paid who would be early 4G adopters) hardly churn and that pricing per se is not a factor in churn at the high-end. Additionally, it is rapidly rolling out 4G on a large scale not giving its high-end 3G/4G subs reason to shift to competition. Data traffic will continue to grow at a robust pace driven by increases in penetration and per sub consumption growth. Better data network and newer technologies (such as 4G) itself allows higher consumption on a like-for-like basis.

Plain Vanilla 2G Voice
On the contrary, incrementally new subs are coming from low-ARPU rural areas, total voice ARPU will likely continue to trend down. Urban wireless penetration (more…)

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