Idea Cellular has increased its mobile data prices by up to 100% for some of its pre-paid 2G plans in Delhi-NCR, while data prices for its 3G plans have gone by around 33%, reports Business Insider. This is not a completely unexpected move by the telecom operator, that had launched its 3G service on the 900 MHz band in the Delhi circle in March this year. The fact that total bids during the spectrum auctions, earlier this year, were 37% higher than the reserve price was a clear indication that a move like this was in the offing.
However, it needs to be pointed out that for the quarter ended March 31, 2015, Idea’s revenues from mobile data contributed 16.9% to its overall mobile revenues, as compared to 15.7% in the previous quarter and up from 10.1% in the same quarter last year. So, the argument that telecom operators have been making about decline in revenue from traditional revenue sources not compensated by increase in data revenues seems to be on a shaky ground. A look at the overall mobile Internet related numbers reported by Idea in Q4-FY15 reveals that contrary to telcos’ claim, data revenue is actually playing a big role in increasing overall revenues. Idea reported 33.4 million mobile data subscribers (18.9 million 2G+14.5 million 3G), and a blended mobile data ARPU of Rs 150, up 44.23% from Rs 104 in the same quarter last year. Idea’s 3G data ARPU was at Rs 209 for the quarter.
Another surprising aspect is that Idea Cellular Managing Director Himanshu Kapania had said during the company’s Q3-FY15 earnings conference call that the telco’s primary focus currently was to ensure that the around 118 million mobile data non-users on its network upgrade to mobile data usage. He had also mentioned that “if the customers continue to hold their 2G device and the 2G device is available still at a price point of Rs 750 to 1,500, there is no reason for us not to be able to promote additional ARPU from a 2G voice customer and if he has got a data handset, we will encourage him to be able to access internet from his 2G data handset.” Will doubling 2G mobile data rates help in achieving either of these objectives.
One of Idea’s popular 2G data plans – 3GB data for Rs 255 – has been changed to 1.5GB data for Rs 255. The data limit of its 3G data plan – 4GB for Rs 755 – has also been reduced to 3GB for Rs 755. Idea has also reduced the validity period for several data packs.
Spectrum auction: During the March 2015 spectrum auction, Idea had retained 900 MHz spectrum in the 9 circles coming up for renewal in 2015-16. These 9 circles, the company had said, accounted for 73% of its overall revenues and about 70% of its subscriber base. Idea had also acquired additional spectrum in the 1800 MHz band in six circles, 2100 MHz spectrum in Kolkata, plus additional 5 MHz of 900 MHz spectrum in Maharashtra. This, the company had said, will allow Idea to expand its 3G services to 13 circles covering 80% of its overall revenue and enable 4G roll out on 1800 MHz in 10 Service Areas covering 61% of Idea’s gross revenue. Idea had acquired a total of 79.4 MHz spectrum during this auction for Rs 30,100 crore.