India is Vodafone’s largest operating company (OpCo) in terms of data usage, accounting for 20% of the overall group’s usage, Vodafone Group CFO Nick Read disclosed during the company’s Q2-FY15 earnings conference call. The telco had earlier mentioned that India is Vodafone’s second largest business in terms of data traffic.
Earlier in the month, Vodafone had reported a total 3G connection base of 13.6 million connections, up from 10.3 million 3G connections in the previous quarter and nearly doubling from 7 million 3G connections in the quarter before (Q4-FY14). Incidentally, the telco has witnessed the highest ever quarterly 3G adoption in the two quarters.
Vodafone group CEO Vittorio Colao said that they are now aggressively pushing the 3G site rollouts in the country and have essentially doubled Vodafone’s 3G base stations through its Project Spring Initiative. Project Spring is Vodafone Group’s initiative to improve its data coverage and capacity in emerging markets like India along with Europe. Through this programme, the company intends to reach about 95% of Indian population through its 3G services by 2016.
Increasing smartphone penetration to grow 3G adoption
Colao said this deployment is very important to drive smartphone penetration in the country, which is currently at 38% in the metro areas, but only 20% nationwide. Higher smartphone penetration will eventually result in higher 3G adoption and data penetration. Colao mentions that the data penetration in India is currently at 30%, but most of it is still 2G whose average revenue per user (ARPU) is just one-fourth of 3G.
Colao notes that there is a very latent demand for 3G services in India, since they have witnessed that the monthly revenue per site is growing significantly month after month in the first seven or eight or nine months of its launch, which he believe is an opportunity considering Vodafone’s infrastructure and funds allocated to Project Spring. Vodafone India CEO Martin Pieters had earlier mentioned that they would spending around Rs 7,000 crore for this initiative in India.
Read Vodafone’s Q2-FY15 coverage