The growth of Mobile Internet in India is staggering: telecom operators are reporting growth of a few million a quarter, and over the last year, disclosures of data has become all the more granular.

Idea Cellular’s Mobile Internet business, in charts:

1. For the quarter ending 31st March 2014, Idea Cellular reported that it has 25.52 million mobile Internet connections, flat for the quarter, but notice the decline in 2G connections, and the growth in 3G. A switch might be in progress. 25.26 million data connections, of which 10.2 million are 3G. 3G connections are up 17.24% Quarter on Quarter.

2G-3G-Subscribers-Idea-Cellular

 

2. Data connection reductions: 0.26 million data connections reduced on a quarterly basis and 0.94 million connections reduced on a yearly basis.

2g-3g-subscriber-addition-idea

Idea has set the benchmark for reporting mobile Internet connections in India by not including those connections that used up less than 1 MB for the month. This began last quarter, which is why you see the decline of 10.6 million 2G connections. In our opinion, this should become the norm.

The lack of growth in the 2G base might be worrying, unless Idea is transitioning users to go straight to 3G

2. Data revenues are 10.1% of Service Revenue, up from 9.5% of service revenue last quarter, and 6.6% in Q4-FY13.

idea-cellular-data-revenues-vs-VAS

Q2 FY14 was important, wherein Mobile Data overtook Mobile VAS, as a percentage of service revenue. This was largely due to the decline in VAS precipitated by TRAI guidelines, but the growth in the mobile base and consumption of data has helped.

Taking data released by Idea Cellular, we’ve estimated their Data and VAS revenues (the calculations are the sections that are shaded in the table below). These might not be exact, but are indicative of the trend:

-Idea-Cellular-Data-VAS-Revenues -Idea-Cellular-Data-VAS-Revenues-table

3. Data consumption is increasing on Idea cellular networks. In fact, the culling out of incidental mobile Internet users has had no impact on overall data consumption, so the decline

data-connections-consumption-idea-cellular

 

Data consumption is up 30.99% quarter on quarter.

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2G data consumption is up 25% quarter on quarter.

*Note: We’ve calculated 2G data consumption by subtracting 3G data consumption from total data consumption. in in case of 2G.

3g-data-connections-3g-consumption-idea-cellular

3G data consumption is up 38.18% quarter on quarter. The growth in 3G data consumption with the growth in user base is particularly interesting. As networks become faster (or users switch from 2G to 3G), they tend to consume more data. It’s the dialup-to-broadband switch.

4. 3G Data usage is up 8.1% to 462 MB per connection, from 427 MB last quarter. Note that this is different from over 3G data consumption. It suggests that Idea might be allowing 2G data customers to access 3G networks. We’ve requested Idea Cellular for a clarification on this.

idea-cellular-3g-usage

 

5. Average Revenue per Connection (referred to as Average Revenue per User by Idea)

– Data ARPU per data connection (2G + 3G): Rs 104, up from Rs 91 last quarter, and Rs 55 for the same quarter last year. Note that this would have been impacted by the notional reduction in 2G connections (explained earlier), so it’s better to only compare the last two quarters.

idea-cellular-data-revenues-arpu

 

 

– Average revenue per 3G connection has declined marginally, with the growth in 3G connections. This will improve once promotional 3G offers are reduced.idea-cellular-data-revenues-3g-arpu

6. Average revenue per MB: ARMB is the realization rate for data for telecom operators. As indicated in the chart below, it has declined with growth in number of connections. 

idea-cellular-data-revenues-connection

7. Idea Cellular Data Revenues (Estimates):

-Idea-Cellular-Data-Revenues-customers

Note: refer to the table above in point 2 for calculations. These are estimates, and should only be seen as indicative of trends.

More on Idea Cellular’s results for the quarter (and all the data) here.