Idea Cellular Data ARPU / Usage up 10% QoQ – Voice Lowers

Idea Cellular 3G Data GrowsIdea 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 (vs. 2.6mn in 1Q) and data subs are now 22% of the base (20% a year ago). Data ARPU per data sub also rose 10% q-q to INR119. Data usage per sub is now at 425MB, up 9% q-q. 3G data revenues overtaking 2G data revenues. On 3G, it has 13.3mn subscribers

Twin risks are facing the sector – spectrum auctions and Reliance Jio Infocomm’s entry. However, our approach is (1) to weigh these risks while not ignoring the long-term upside risks from inevitable industry consolidation and (2) to price in the risks and not adopt a blanket ‘too risky, don’t invest in telcos/Idea’ mindset

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