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Telecom firms keen on 3G to lift revenue in non-voice segment

Telecom firms keen on 3G to lift revenue in non-voice segment
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First Published: Tue, Oct 09 2007. 09 33 AM IST

Show time: A Bollywood film being screened on a mobile phone. India may have this technology by end-2008.
Show time: A Bollywood film being screened on a mobile phone. India may have this technology by end-2008.
Updated: Tue, Oct 09 2007. 09 33 AM IST
Despite India being the fastest growing wireless market in the world, adding seven-eight million subscribers every month, the country’s leading telecom operators such as Bharti Airtel Ltd, Reliance Communications Ltd and Idea Cellular Ltd are seeing little improvement in their revenues from non-voice offerings, even as they seek to improve average billings and look beyond voice-based services for more revenues.
Phone firms such as Bharti Airtel, in fact, have seen their share of non-voice offerings go down as a percentage of total revenues.
Show time: A Bollywood film being screened on a mobile phone. India may have this technology by end-2008.
The share of non-voice revenues for Bharti declined to 9.9% in March from almost 10.8% a year before, according to telecom research firm BDA China Ltd.
In contrast, China Mobile Ltd, which controls nearly 70% market share in China gets almost a quarter of its revenues by offering data services and downloads to its subscribers, says Beijing-based BDA.
Proponents of the so-called 3G, short for third- or next-generation telecom wireless systems that enable faster data access, recommend a quick transition to the technology and start offering services such as audio and video downloads to customers. “3G will allow us to generate more revenues per customer, especially in the metro areas where subscribers are ready to pay for high-end data services,” said Abhay Savargaonkar, senior vice-president for 3G at Bharti Airtel. The company has already done trials on 3G network and “will only take six months to roll out the services after clearance for more spectrum comes in,” he added.
Arpu, or average revenue per user, each month, for Reliance Communications, which currently has around 17% market share in the Indian cellphone market by numbers, has gone down from almost Rs440 in March 2006 to around Rs390 in June 2007, according to BDA.
With the operators now looking at increasing their customer base in rural areas, “arpu is destined to get affected and 3G can help us address this issue by offering more services in the urban areas,” said Savargaonkar.
Bharti, which currently derives around one-fifth of its revenues from rural areas, is aiming to expand its network to more than 500,000 villages by 2010, said Sanjay Kapoor, president, mobile services, Bharti Airtel, last week.
But, the absence of a clear policy and spectrum allocation delays are holding up India’s 3G programme, said Duncan Clark, chairman of BDA China. “At current pace, we do not see 3G happening in the country anytime before end of 2008,” he told Mint recently.
While analysts are blaming the policymakers for the 3G delays, the government, which has received around 300 applications from some 30 companies, including the world’s largest phone firm AT&T Inc. and local realty major DLF Ltd, is yet to resolve spectrum allocation for older generation networks of existing operators.
“The priority is to resolve this first and then look at 3G,” said a senior official at the department of telecommunication who did not wish to be identified.
India has around 241 million wireless subscribers currently, and, with only about 20MHz of spectrum to be made available, existing operators, such as Idea Cellular Ltd and Vodafone Essar Ltd, are scrambling for more spectrum in order to roll out services across the country.
New applicants are unlikely to receive spectrum rights unless the current first-come-first-served policy is overturned in favour of an auction.
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First Published: Tue, Oct 09 2007. 09 33 AM IST