2015 Spectrum Auction – What is The Status of Industry / Operators Balance Sheet ?

Indian Telecom Operators Profit LossIn the aftermath of the 2015 Mega Telecom Spectrum auction we analyze the impact of Higher-than-expected payouts for spectrum renewals.

Developments on the spectrum front over the past few years have meant a substantial jump in the cost of buying fresh or renewing extant spectrum for the industry. Even as a significant portion of the renewal payouts in the two renewal auctions that have happened thus far (February 2014 and March 2015) has been borne by the Big 3 Telecom Operators [Airtel, Vodafone & Idea]

Can the current industry size that is reflective of extant spectrum pricing and competitive dynamics support the expanded balance sheet of the industry? The clear answer is in the Negative.

What needs to happen? P&Ls need to respond (more…)

How Data Vs Voice Pricing is a Risk to Airtel, Vodafone, Idea ?

Mobile Broadband Vs VoiceMany Mobile apps now offer either voice messaging (Wechat) or straight VoIP functionality (Skype, Viber, Line). While it is difficult to prove a direct linkage between usage of these apps and usage/revenue trends within the traditional telcos, there is at least anecdotal evidence that, on average, rising 3G / 4G penetration rates are usually associated with falling voice minutes of use.

We do not attempt to prove that messaging apps are cannibalizing voice. Instead, we attempt to quantify the cost savings to users (and therefore the voice revenue risk to operators) were subscribers to move their current voice usage over to a VoIP data based pricing model.

Compression ratios for the various CODECs used by VoIP providers vary, but we understand the most frequently used is the G.729 CODEC. Adjusting a minute (more…)