Only the Surface is Scratched

Attractive 3G pricing and developed device ecosystems have perked up data subscriber growth and ARPUs, but the penetration is a fraction of the potential.

If recent telecom industry performances are indicative, the mobile broadband juggernaut has begun to roll, with growing momentum. A big side-benefit of this growth is that India’s ever elusive broadband target of 600 million by 2020 suddenly looks achievable. However, data traffic seems to be growing faster than net mobile internet subscriber additions, which is a good thing in the short term but not so good in the long run. While data growth does help service providers see a lift-up in their revenues and helps them better service their huge debt piles, the slowing rate of new subscriber growth has the potential to dampen the attractiveness of a resurgent telecom sector.

Numbers tell the story

As an example, for the period ended March 2015, the largest operator Airtel saw a year-on-year rise of 30 percent in its data subscriber base while the total data on the network went up by 82 percent for the corresponding period. Nevertheless, helped by a much higher growth of 90 percent in 3G subscriptions, the data average revenue per user (ARPU) went up 32 percent, from Rs 133 in March 2014 to Rs 176 by March 2015. This helped the overall blended ARPU also to rise notionally from Rs 194