For the quarter ending June 2017, Idea Cellular reported that it has 38.1 million mobile Internet connections, and the total number of connections has been declining for the company, since the quarter ended December 2016: the quarter in which Reliance Jio launched. What is changing for Idea Cellular, however, is the nature of the connections: there has been a decline in 2G and 3G connections, and a growth in 4G. A switch might be in progress. Of the 38.1 million data connections, 26.4 million (69.3%) were Broadband (3G+4G). Last quarter, 24.7 connections were broadband, accounting for 58.4% of total Mobile Internet connections. Broadband connections were up 6.8% Quarter on Quarter.
2. Data connection reductions: Idea reported a 4.1 million decline in data connections, and a 10.9 million decline year on year. The company lost 5.8 million 2G connections during the quarter.
Idea has set the benchmark for reporting mobile Internet connections in India by not including those connections that used up less than 1 MB for the month.
The lack of growth in the 2G and 3G connections base might be worrying, unless Idea is transitioning users straight to 4G, but given the overall decline, it is clear that some users are quitting Idea.
2. Data consumption is increasing on Idea cellular networks. Due to competitive market pressure from other telecoms, Idea has been providing cheaper data services to their customers, because of which data consumption has increased, even though the number of connections declined.
The data consumption has almost doubled (99% up) quarter on quarter, which, on this large a base, is unheard of, and almost seems hard to believe.
2G data consumption is up 5.4% quarter on quarter, which is odd given the almost 33% decline in the 2G user base, QoQ.
3G data consumption is up 88% quarter on quarter. As networks become faster (or users switch from 2G to 3G), they tend to consume more data. It’s the dialup-to-broadband switch.
4G data consumption is up 262% quarter on quarter.
3. Broadband Data usage is up 123.2% to 3,083 MB per connection, from 1,381 MB last quarter.
4. Average Revenue per Connection (referred to as Average Revenue per User by Idea)
– Data ARPU per data connection (2G + 3G + 4G): Rs 119, up from Rs 110 last quarter, and down from Rs 142 for the same quarter last year. Note that this would have been impacted by Reliance Jio.
– Average revenue per Broadband connection has declined marginally, with the growth in Broadband connections. This will improve once promotional Broadband offers are reduced.
5. Average revenue per MB: ARMB is the realization rate for data for telecom operators. As indicated in the chart below, it has declined with growth in number of connections.
6. Data revenues are 17.1% of Service Revenue, down from 18.3% of service revenue last quarter, and 20% in Q4-FY17.
Taking data released by Idea Cellular, we’ve estimated their Data and VAS revenues.
More on Idea Cellular’s results for the quarter (and all the data) here.