The A-Vo-Id [Airtel, Vodafone, Idea Cellular] Telecom Operator Lobby Control over 2/3rd of the Indian Telecom Market. They have ~95% of their subscribers on the pre-paid platform and never did they make any effort to convert them to post-paid. Never did you see them offering Bundled Packages [SmartPhones,Unlimited Voice, SMS and 3G Data] even in post-paid segment. Reliance Communications was the only exception in this regard which offered iPhone and Unlimited Calling Pack.
To date, A-Vo-Id operators focus has been on cannibalisation of SMS revenues by messaging apps (WhatsApp, Viber, WeChat, etc). Clearly, the advent of OTT voice adds an additional potential threat. At first glance, the amount of revenue exposed to OTT voice can be assessed with reference to the revenue generated by voice in each market. Needless to say, voice is an absolutely critical part of the service provided by cellular operators, and still comprises more than half of revenues in most markets in the region.
However, while the naked proportion of revenue generated by voice might give a simplistic answer on vulnerability, we believe that a truer measure of the amount of revenue exposed to the OTT voice threat is arrived at by assessing the amount of revenue included within ‘bundles’ of voice, text and data.
In markets such as Australia and the UK they relied much more heavily on integrated bundles, and suffered commensurately less compared to markets like in India where Bundled Offerings is literally Absent. We believe that this logic will also apply for OTT voice. If customers are not financially incentivised to go through the messaging app to make a voice call, in order to avoid a high per minute charge, then they may do it less.
Bundling also makes sense for the operator’s business models, or, to be precise, a range of bundled offerings, whereby customers pay a certain amount per month for a certain amount of voice, SMS and data, and customers consuming larger bundles, particularly of data, pay more! This makes sense because it is the best fit with cost structures of the operators, who have to construct networks to accommodate voice, SMS and data traffic.
In the context of Indian market, 3G rollout is still in early stages, and even top metros are not fully covered.
Furthermore, smartphone penetration in India is currently sub-10%, albeit growing rapidly. Thus, in theory, the operators do have time to shift tariff mechanisms towards more bundling (should the competitive environment allow it). Airtel did make some move to offer customised bundles to postpaid customers [5% of users] through its ‘My Plan’ offering are worth highlighting (recently also offered by Idea as ‘! Plan’)—at least a start seems to have been made.