Idea Cellular lost a total of 6.35 million mobile Internet connections for the quarter ended 31st March 2017, down to 42.23 million from 48.58 million last quarter. This is even lower than the 44.02 million it reported for the same quarter last year.
Of this, there was a decline of 2.871 million in 3G connections, somewhat offset by the addition of 528,000 4G connections, a quarter after losing almost that many. Idea’s 4G connection base has gone from 3.073 million at the end of September 2016 to 2.54 million at the end December, and back up to 3.069 by the end of March 2017. The latest recovery has been timed rather well with Jio launching paid services. Year on year, though, the numbers look better: Idea has gone from 0.68 million 4G connections in March 2016 to 3.069 million in March 2017.
This, by no stretch of the imagination, compares to Jio’s all-4G user base of 72 million by the end of the same time period. If tomorrow’s telecom operators are indeed going to largely be data-networks, Idea Cellular has a lot of catching up to do.
The other number we’re monitoring closely is ARPU: The average revenue per user metric is back in vogue now — around five years after telcos started saying that investors should focus on ‘revenue/realisation per minute’ due to multi-SIM usage in India — because telecom operators are now looking to offer consumers more services bundled together, trying to get more-money-per-user, instead of leeching more-profit-per-minute. Also, revenue per MB and revenue per user are dropping, so it helps telecom operators if attention is diverted away from them. So we should probably look at that first:
- Average realisation per minute for voice dropped to Rs 0.259 per minute from Rs 0.296 last quarter, and Rs 0.333 the same quarter last year. Average realisation per minute (overall) dropped to Rs 0.345 per minute from Rs 0.407 last quarter and Rs 0.464 for the same quarter last year.
- Average realisation per MB (ARMB) dropped to 0.115 from Rs 0.159 last quarter, and almost half of what it was during the same quarter last year: Rs 0.229 last year. That’s indicative of how much cheaper data services are in India, year on year.
Now, how has this decline impacted ARPU? Blended ARPU (postpaid plus prepaid revenue) is at Rs 142 per customer, down from Rs 179 a year ago and Rs 157 last quarter. Data ARPU per data connection is Rs 110 (and this covers 2G+3G+4G). Data ARPU per Mobile Broadband (3G+4G) connection is a bit better: Rs 138, versus Rs 141 last quarter, and Rs 191 for the same quarter last year.
Data usage per data connection has grown substantially: Rs 957 per user now, as compared with Rs 641 a year ago. Broadband data users are using around 1.38 GB per month now, compared with 857 MB per month for the same quarter last year. Data volume has grown to 127.01 billion MB, up from 108.84 billion MB last quarter, and 82.24 billion MB for the same quarter last year. Broadband data volume is around 104.22 billion of this 127.01 billion MB data usage.
So the increase in usage is linked with decline in rates (ARMB) and has largely led to a decline in ARPU per data connection as well. Also known as the Jio effect. And Idea knows it. In its press release, it says: “The October to April 2017 interval can be best described as ‘Period of Telecom Discontinuity’, permanently changing mobility business parameters.”
- Total Data:
- Connections: 42.333 million, down from 48.583 million last quarter, and 44.019 million the same quarter last year.
- Blended Data Average Realisation per MB: Rs 0.115, down from Rs 0.159 last quarter, and Rs 0.229 last year.
- Data ARPU: Rs 110, down from Rs 111 last quarter, and Rs 147 for the same quarter last year.
- Data usage per data connection: 957 MB, up from 703 MB last quarter, and 641 MB last year.
- Data usage broadband data connection (3G+4G): 1381 MB, up from 971 MB last quarter, and 857 MB last year.
- Data ARPU for broadband connections: Rs 138, down from Rs 141 last quarter, and 191 last year.
- Total data volume of 127.014 billion MB, down from 108.843 billion MB last quarter and 82.236 billion MB last year.
- The ‘Non Voice Revenue’ (including data) contribution to the ‘overall service revenue’ fell to 24.9% as mobile data revenue contribution declined to 18.3% (vs 20.2% in Q3FY17).
- Connections: 3.069 million, up from 2.541 million last quarter, and 0.68 million last year.
- Data Volume: 18.674 billion MB, up from 12.407 billion MB last quarter, and 1.438 billion MB last year.
- 40,852 4G cell sites, up from 33,954 cell sites last quarter, and 14,642 sites last year. 3,363 census towns with 4G coverage, 2898 last quarter and 1327 last year; 19,811 villages, up from 15720 last quarter and 2619 last year.
- Connections: 21.61 million, down from 24.485 million last quarter, and 22.090 million last year.
- Data Volume: 85.549 billion MB, up from 72.048 billion MB last quarter, and 56.165 billion MB last year.
- Coverage: 40,852 4G cell sites, up from 33,954 cell sites last quarter, and 14,642 sites last year. 3,363 census towns with 4G coverage, and 19,811 villages
- Devices on the Idea network:
- Total broadband devices: 78.1 million (41.2% of total devices on network), up from 75.7 million (40.9% of devices on network) last quarter and 60.4 million (34.5% of devices on network) last year.
- 3G devices: 53.8 million devices, down from 55.3 million last quarter, and up from 49.3 million devices last year.
- 4G devices: 24.3 million devices, up from 20.4 million last quarter, and 11.1 million last year.
- Connections: 16.66 million, down from 21.557 million last quarter, and 21.249 million last year.
- Data Volume: 22.791 billion MB, down from 24.388 billion MB last quarter, and 24.633 billion MB last year
Idea, for the first time since its IPO, reported a revenue decline of 1%, at Rs 35,575.7 crore for the financial year ended 31st March 2017 (FY17), down from Rs 35,949.4 crore in FY16). The company said that while it “optimistic on India growth story & continues to expand its scale of operations, this tumultuous phase subdued Idea’s EBITDA during the current financial year by 14.1%” to Rs. 10,276.3 crore versus Rs 11,967.5 crore in FY16).
Idea reported a post-tax loss of Rs 407.5 crore in FY17 on standalone basis, its “first ever annual loss in last 11 years since its IPO during Year 2007.” This was due to “last two years of high
Investment in Spectrum and Equipment” which has increased the ‘Depreciation & Amortisation’ charge to Rs 7827.2 crore, and an ‘Interest & Financing Cost (Net)’ to Rs. 3734.1 crore.
“The revenue KPIs & financial parameters for all mobile operators have sharply declined in H2FY17,” the company said, adding that “For the first time in its history, the flourishing Indian Mobility industry, is trending towards an annual revenue decline of ~2% in FY17 (vs FY16). With the new entrant starting to charge for its services, albeit very slowly, the sector is expected to return to growth in the next financial year.”
Idea plans to launch 4G services in Mumbai by the end of May 2017. During this quarter, Idea launched its 4G services in 8 service areas of Gujarat, UPW, UPE, Rajasthan, Bihar, West Bengal, Assam and J&K, thus expanding its 4G broadband services to 19 telecom circles. The company also introduced 3G services during Q4FY17 in Bihar and Rajasthan service areas, expanding Idea’s 3G product offerings on its own spectrum to 15 service areas (besides offering 3G services in the remaining service areas on 3G ICR, except Orissa).