comscore Telecom firms eye Internet data for revenue generation
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Telecom firms eye Internet data for revenue generation

As it inched closer to the 100- crore subscriber base, telecom industry identified mobile internet data as the next big thing for revenue generation even as consumers were burdened with up to 100 perc

  • Published: December 30, 2014 4:11 PM IST
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As it inched closer to the 100- crore subscriber base, telecom industry identified mobile internet data as the next big thing for revenue generation even as consumers were burdened with up to 100 percent rise in charges for such services in 2014. Also Read - Airtel 5G Mumbai trials show download speeds of 1.2Gbps, upload at 850Mbps

From a subscriber base of nearly 91.5 crore at the end of last year, the industry was hoping to reach 100-crore mark by the end of 2014, while various players were seen devising new ways to expand their revenue base and caught on to the growing interest among consumers for mobile internet as a big opportunity. Towards the end of the year, Airtel announced plans to charge extra for internet calls through VOIP applications like Skype and Viber, but had to abandon the idea after a public outrage. As more telecom players firm up plans for charging on such services, the sectoral regulator TRAI, which has power to control tariffs, may soon come out with regulations for messaging and calling applications. Also Read - Jio maintains lead in 4G download speed, Vi in upload in May: TRAI

During 2014, telecom operators gained heavily from rise in mobile internet usage which was driven by applications like WhatsApp, Facebook, Skype and consumer adopted them as these applications reduced their phone bill. “In year 2014, operators saw a healthy increase in subscriber revenue on back of nearly 100 per cent growth in data revenues and very favourable take-up of OTT (over-the-top) applications like WhatsApp, Facebook etc,” PwC Leader Telecom Arpita P Agarwal said. Airtel in July-September 2014 period reported 94.6 percent increase in mobile data traffic over previous year accounting for 11.1 per cent of its total revenue. Idea Cellular reported over 125 percent jump in mobile data in same period. Vodafone reported data revenue of Rs 2,552.5 crore in the first half of 2014-15 and it now contributes 13.5 percent to the company’s service revenue. “Data will continue to drive growth in revenue and we expect to stay focused on our data penetration. As and when the market matures, we will make necessary investments to stay relevant to mass market customer’s needs,” Uninor CEO Vivek Sood said. Also Read - TRAI's new SMS regulations will prevent spam, fraudulent messages: Here's how

Uninor’s 20 percent customers have subscribed to its mobile internet services. GlobalWebIndex (GWI), in survey of the Asia Pacific region including India, found that 45 per cent users of such applications use them because messaging is free on them. Top mobile messaging apps in India include WhatsApp, WeChat and Facebook Messenger, GWI survey said. “In 2014, we saw an increase in adoption of rich media based services amongst our subscriber base, which is also a strong indicator of evolution of data users. As we step into the new year, we believe that video consumption on mobile will get even more popular amongst the youth,” Aircel Chief Marketing Officer Anupam Vasudev said. Experts feel that launch of new 4G network specially Reliance Jio Infocomm and new entrants may bring some respite to consumers.

July 2015 is the deadline for 4G spectrum holder companies to provide 90 per cent coverage in metro area, if they have spectrum there, and 50 percent of rural area within five years. If a company fails to meet roll-out conditions, spectrum will be taken back. Industry body Cellular Operators Association of India has sought extension of this deadline indicating that companies are not ready with 4G network to start service. For seeking extension COAI has cited delay in development of technologies for it and public interference in installing mobile towers due to apprehension of health hazard from radiation emitted from it.

Latest data from Telecom Regulatory Authority of India shows that the telecom subscriber base in the country increased by 6.4 percent to 96.26 crores in October, from about 91.5 crore at the end of 2013. As per industry estimates, the total subscriber base was earlier expected to grow to 100 crore by end of 2014. Wireless connections dominated market which grew by about 7 percent to 93.53 crore in October 2014. As per TRAI data, there were about 26 crore internet users in the country till June which included over 24 crore consumers using internet over their mobile or through dongles.

Internet penetration in the country increased by about 30 per cent, courtesy smartphone and dongles. The incumbent telecom operator Airtel, Vodafone, Idea Cellular continue to dominate market in terms of both market share and revenues. The companies are now posting increase in profits as the competition has reduced in most of the service areas where they operate. Even as the profitability of telecom operators is improving, COAI is of the view that it is still below the level witnessed 3-5 years ago. “While the profitability of the industry is improving, it is much below the level that the sector was witnessing 3-5 years ago. The revenue growth has reduced to 8.5 per cent during 2013 from 15.4 per cent in 2011,” COAI Director General Rajan S Mathews said.

Sistema Shyam Teleservices (SSTL), which offers services under MTS brand name, said the though sector in India continues to be under huge debt, the revenues for the sector have started to improve. “However, the health of the telecom sector can improve a lot faster if regulatory policies which ensure a level playing field,” MTS India Head of Strategy Ranjan Banerjee said.

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  • Published Date: December 30, 2014 4:11 PM IST



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