3g-data-india

Jio’s 4G Plan Pricing to Mislead Airtel, Vodafone, Idea

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Jio Commercial Plans MisleadingReliance Jio announced it has filed tariff plans with TRAI. These would be applicable from 1st Jan-17, post-expiry of the free service offer, renamed as Jio Welcome Offer . Akash Ambani appears to have mastered the lessons of Chinese military strategist Sun Tzu’s The Art of War and has hit Airtel, Vodafone and Idea where it matters most – Voice Revenues which account for 75% of their Billing.

We do not think Jio’s plans would have a significant impact on mass mobile broadband data market with ARPU of Rs200 400, because (as per Jio media release), there are no monthly packs

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Only 10% of Idea Cellular Users Consume More than a Gig of 3G/4G Data

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Idea 4G CustomersThe 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

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Slowing growth of Data – Voice Cannibalization in India

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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.

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Blind Gaming by Incumbents Amidst Reliance Jio Launch

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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

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What are Telecom Operators Strategies for “Mobile Data” ?

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Airtel Vodafone Data StrategyWe believe the incumbents lobby led by Airtel, Vodafone and Idea are banking on 3G to lead data growth in India over the next five years. They have 2100MHz (3G spectrum) spectrum in their market leadership service areas, enabling them to participate in data growth in their dominant service areas. Over the next 12-18 months, we believe Airtel, Vodafone and Idea are likely to have pan-Indian 3G spectrum, as they are likely to acquire additional 2100MHz spectrum when the government auctions it later in the year.

Also, we think market leaders are likely to deploy their recently renewed 900MHz (liberalised spectrum) for 3G services over the next 3-5 years

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What is Reliance Communications 3G / EVDO Mobile Data Strategy ?

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Reliance communications 3G Mobile Data StrategyReliance Communications has divided all the telecom circles in 3 categories – 3G metro, 3G circles and 3G dark circles (where RCom does not have 3G spectrum). RCom plans to use a combination of 3G and CDMA to penetrate the data users in 3G metros and circles according to the requirement of subscribers (for example dongle users will stay on CDMA, while smart-phone users will rather use 3G H+ Network).

The company intends to use CDMA in 3G dark circles, where RCom has not

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How does India Compare with China & Malaysia in 3G eco-system ?

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3G Comparison in India, China and Malaysia4 Years after the Limited 3G Spectrum was auctioned in the 2100MHz band, we’ll take a peek into how we are doing with our competitors in Asia – China and Malaysia on various factors. We are classifying based on the Big 4 Factors that help determine the success of Mobile Data.

3G Network Status

  • India – 3G coverage and average data speed remains lowest in Asia. Unlikely to expand given low
    capex guidance and balance sheet constraints
  • China – 3G coverage has already reached ~75%. Average data speed is best in the EM space and comparable to DM markets. Massive 4G buildout ongoing
  • Malayasia – 3G networks are already built-out however we see investments remain soft in the LTE space. Thus in our view network pull factor is relatively soft in Malaysia.

SmartPhone Availability

  • India – Smartphone penetration is ~17% of population base. Expect it

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Which Way will India Go 3G or 4G-LTE ?

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India Mobile Data 3G 4GDespite growth takeoff, 3G penetration is merely 7-10% of the existing mobile subscriber base in India. One key deterrent to a broad based data adoption has been expensive 3G handsets. With the launch of Android One the USD 100 handset segment has seen more depth. With the availability of low-cost 3G smartphones, existing subscribers are unlikely to continue using 2G feature phones, opting instead to make the switch to 3G smartphones; in this respect, the trends over the last six months have been very encouraging. We believe the trend will now change in favour of low cost smartphones versus feature phones.

Furthermore 3G coverage is expected to improve; more so as incumbent telcos gear up to contest 4G launch by Reliance Jio. Given this first positive

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Airtel Mobile Data Growth on Strong Footing

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Airtel Data GrowthAirtel Mobile Data continues to grow vigorously (67% revenue growth Y/Y) and now contributes over half of the overall Y/Y India wireless revenue growth rate of 10% (5.4% of this 10%). Therefore, data is helping to offset the tepid voice minutes growth pattern. Notably, data ARPU at Rs25 (averaged across the entire customer base) now contributes 13% of the overall ARPU (of Rs202). This percentage is rising, thus helping overall ARPU.

One should note that Airtel India has not

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Why 3G mobile Data is Lagging SmartPhone Adoption in India ?

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3G in India vs SmartPhone AdoptionMobile phones have increasingly become more than a communication device – 40% of the respondents in a survey across urban/ semi-urban and rural areas claim that it is currently their primary means of entertainment. While people are upgrading their phones to smartphones and increasingly using their phones to watch videos, listen to music or take photos, having a smartphone does not equate to having a mobile data plan yet. People quite frequently buy pirated content (videos/ music) from local retailers; which is then shared among friends. Moreover, the rise in the number of people that have smartphones, but no data subscription is leading to the growth

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