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Airtel to hike data prices in a calibrated manner across India

Airtel flicr

India’s largest telecom operator Bhart Airtel will be increasing prices for their data services across the country. In a call with analysts, former Airtel CFO Srikanth Balachandran revealed that the company would gradually look at increasing data prices “in a calibrated manner across the markets to suit adoption usage as well as profitability.”

In June, Airtel withdrew discounts it offered on online purchases of its mobile data for pre-paid customer packs and brought it on par with internet packs sold through offline retailers. For example, in the Mumbai circle, customers could buy 1GB of 3G data for Rs 249 whose validity period was30 days. This has been cut down to 1GB of mobile Internet for 28 days only, at a higher price of Rs 255. In 2G data packs, customers can now get the Rs 199 pack which gives 1.25GB for 28 days, as opposed to 2GB of 2G data for 30 days.

Earlier this month, MediaNama had reported that Airtel had also reduced 3G data allowance and validity periods for prepaid customers. The Rs 100 recharge for 300MB of 3G data (varies between Rs 97-Rs 103, depending on provider), with a validity for 21 days, had been reduced to 250MB of data and a 10 day validity.

One of the reasons for this could be the fact that data realizations at Airtel have been on a downward trend. Data realization refers to how much money a company makes from a megabyte or gigabyte of data. Answering an analyst question, Airtel managing director and CEO Gopal Vittal said that people are using more of their data allowance. “If you gave a customer 1GB and charge them Rs.300 and they use only 500MB of it, then your realization will be 60 paise. If they use the whole GB your realization drops to 30 paise,” Vittal said. “So one of the metrics that we look at very closely is what is the overall data revenue growth and what is the consumption growth,” he added.

Vittal’s answers and Airtel’s moves for reducing validity and data allowances could mean that consumers will have to recharge their data packs more frequently. This could additionally translate to higher data revenues for the company.

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For the quarter ended June 30, mobile Internet revenues for Airtel in India grew by 67.79% year on year to Rs 2547.1 crore accounting for around 19.2% of total revenues for the company. For the same quarter last year, Airtel had reported Rs 1,578 crore in mobile revenues.

Video traffic on the network

While answering another analyst question, Vittal revealed that video accounts for about 40% of the traffic on Airtel’s network. Vittal added that 4G is essential for video and heavy downloading. “(If) you are doing on WhatsApp or Facebook or you are searching stuff on Google these are applications that you really do not need 4G for, 3G works as well. If we are doing heavy downloads, if you are watching movies and things like that then of course 4G is really essential,” he added.

Voice over LTE

Regarding Voice over LTE, Vittal said that it is something that the company will not be looking at. “On VoLTE, I think again we can see that globally, there is a significant progress in the growth of the ecosystem. It still early days for VoLTE, but you must remember as an operator we have circuit switch fallback,” he added.

It is interesting to note that Himanshu Kapania, CEO of rival telecom operator Idea believes that voice over LTE is the way of the future. “In the long run, VoIP will have a far superior technology, and the coming technology is voice over LTE. That’s where the high quality work has been done,” he had said in a analyst conference call in May this year.

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Image source: Flicr user Arti Sandhu

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