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

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 (more…)

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

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 (more…)

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…)

What are Telecom Operators Strategies for “Mobile Data” ?

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 (more…)

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