During a recent analyst call, Idea Cellular’s MD & Director Himanshu Kapania said that a “large number of users” that opted to own a second Jio SIM are returning back to it to use voice and data services. “So the present — the 4G operator (Jio) has started to charge for their services, and there is equilibrium that is getting established…We are able to take certain premium because the voice quality that we offer…is better because of its fallback available on 3G and 2G. So with this, what we are witnessing is a return of a large number of users who are using only voice services with us.”
Idea’s voice service has “fallback” capability from 3G to 2G (and vice versa). When an Idea user’s 4G/3G network signal is low, the network downgrades voice transmission to 2G, providing uninterrupted serve, although with low-quality voice. Kapania says that this capability has allowed Idea to retain some of its customers who have a second Jio SIM. Idea’s voice traffic grew by 10.3% QoQ to 231.4 billion minutes in Q4FY17, compared to 209.8 billion minutes in the Q3FY17. However, Idea is making lesser money out of its voice segment: Average Realization per Minute dropped 15.3% QoQ to 34.5 paisa, from a peak rate of 47.7 paisa in Q2.
‘A number (Jio 4G users) are returning back to us’: Kapania
Kapania said that some Idea users who also own Jio SIMs are returning back to use its own 4G services. “And the data services with the new entrant, a number of them are returning back to us, have started to use our 4G services. You have to wait for 2 more quarters to see the actual results, but…early trends show a reasonable growth on a daily basis of the number of customers adopting to Idea 4G.” Idea lost 532,000 4G subscribers in Q3FY17 after Jio’s launch. But a quarter later in Q4, Idea added back 528,000 4G subscribers, taking its total 4G base to above 3 million. Jio, on the other hand, has 108 million 4G subscribers.
Idea has 25 million customers on its network who own a 4G device, and at least 12 to 15 million of them are using only 3G. Kapania says that the company will focus on converting them into 4G by launching new packs. But he also pointed out that at least half of such users are “using new entrant (Jioa’s 4G) services, which were being available on free of charge. But we are seeing a significant number of them are returning back.” Idea had reduced its mobile data rates by 27.6% in Q4FY17 to 11.5 paisa per MB compared to 15.9 paisa in Q3 to keep up with the competition and return more users.
Apart from bundling 4G and voice, Idea is also making an effort by providing Value Added Services in form of digital content, music, videos, etc. to bring in more customers. It had launched a music and video streaming service in January. Currently, the company claims to have 1 million registered users using these services.
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