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A year later, Airtel still does not see VoIP cannibalization

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Answering a query from analysts, Airtel managing director CEO for India and South Asia, Gopal Vittal said that company still does not see any evidence of VoIP eating into voice revenues.

“We have not seen any evidence of that in any city as yet. There is some cannibalization, but it is not material at an aggregate. So that’s why voice volumes continue to grow. In 3-5 years, it will be difficult to say what will happen. We haven’t seen any early signs of it yet,” Vittal said.

The company had reported mobile Internet revenues grew 50.6% year-on-year to Rs 3183.9 crore for the quarter ended December 31 2015 (Q3-FY16), accounting for around 23.1% of total revenues for the company.

Vittal had echoed similar sentiments in an analyst call about a year ago. At the time Vittal said that SMS services were cannibalized by messaging apps but the contribution of Internet telephony was still very tiny. At the time, operators were pushing the telecom regulator TRAI to regulate VoIP services and figure out a revenue sharing arrangement with Internet companies.

Rival telecom operator Idea had also mentioned that VoIP services are not eating into their revenues. Idea CEO Himanshu Kapania said that “about 0.1-0.2%” of the company’s traffic is moving on VoIP.

Average revenue per user (ARPU) the metric to look out for

Speaking on revenue growth from data, Vittal also said that with 4G launches, Airtel’s data ARPU be coming in will be a lot more. “The important metric will be the ARPU coming in from a data customer,” he said on the call.

Vittal also said that Airtel’s strategy on growing data will be to attract more users on Mobile Internet and grow its consumption. “There’s an opportunity to grow the use of mobile Internet dramatically. We have around 55 million customers on data. But this definition is more than 1 MB usage. So if you start looking at different buckets where there is real material  usage, like say half GB or 1 GB and above, that number gets smaller and smaller. So we believe that the opportunity to grow data through a combination of attracting more users to mobile Internet and then grow consumption,” Vittal explained.

Image credit: Arti Sandhu under  CC BY SA 2.0

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