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Worry signs
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New Delhi, May 22: Mobile companies gearing up to launch lucrative 4G data services are likely to be disappointed as research shows that India may not see a sufficient increase in data use to justify the high entry prices.
“It is highly unlikely that data use revenues will grow from the current level of around 14 per cent of total revenue to 50 per cent by 2020,” said Pricewaterhouse Coopers (PwC).
Telecom regulator Trai, while figuring out per unit 4G spectrum rates, has assumed that data services will contribute more than half of an operators’ revenues by 2020. Analysts and industry operators are now arguing that this basis of pricing spectrum is wrong.
At present, non-voice revenues as a percentage of total revenues stand at 14 per cent, out of which pure data services contribute only 5 per cent and the rest comes from message-based services.
Data services, such as Internet use, live streaming of TV and online gaming usually give an operator more profits than voice services, where profits have been squeezed by intense competition. Hence, the degree to which customers would use data services in the future is linked to revenue and profitability forecasts as also to the pricing of spectrum.
“Even in mature telecom markets such as Denmark, Italy and the US, the contribution of data services to revenue is only 19.6 per cent, 27.2 per cent and 33.20 per cent, respectively in 2010. In fact, not even Japan has 50 per cent data revenues as a proportion of total revenues today,” said Mohammad Chowdhury, head of telecom at PwC India.
While Bharti Airtel has launched 4G services in Calcutta and Bangalore, Mukesh Ambani-promoted Reliance may start pan-India data services by next year, when the market is more mature. Lack of demand may also see two foreign operators — Augere Wireless (backed by France Telecom) and US chipmaker Qualcomm — quit the 4G data segment, according to sources.
Aircel and Tikona are the other two players in the high-speed data space.
Meanwhile, Aditya Birla Group firm Idea Cellular today announced slashing charges for 3G services by up to 70 per cent for various packages across circles. Idea had over 2.7 million active 3G subscribers.
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