The top-3 operators - Airtel, Vodafone, Idea Cellular have raised data prices on prepaid packs (16%-18% for 1GB) in Delhi last week to test the elasticity of demand to higher pricing in a metro circle, in our view. Further, we do not rule out operators experimenting with differential data pricing for circles based on penetration/usage.
While we believe subscriber usage patterns are unlikely to be significantly altered due to higher pricing, there may be delays in upgrades to larger packs of 500MB/1GB. Given the rapid growth in data penetration due to smartphone adoption, better localized content, and
potential bill shocks for excess usage over plan limits, most subscribers upgrade from the base packs (typically about 300MB). In addition, the rapid increase in penetration and usage could also mask perceived demand elasticity due to data price increases.
