Vodafone India betting big on 3G data for future growth

Telecom Lead Asia: Vodafone India MD and CEO Marten Pieters says mobile data revenue – primarily powered by 3G — will drive the mobile operator’s India growth.

There are strong supporting factors that will ensure substantial growth in the Indian telecom market for Vodafone.

Vodafone India has 3.3 million 3G subscribers out of its 37 million mobile Internet users. The company’s mobile Internet subscribers in fiscal 2012 were 35.4 million.

Vodafone’s Rural Leadership

The mobile operator is betting big on its rural leadership for further 3G growth.

Encouraging to note that 3G growth in rural areas will be substantial in coming months as rural people will be accessing their first Internet connection on their mobile phones. Cost effective 3G phones has already positively impacted 3G growth in semi-urban and rural areas.

Vodafone India has 82.2 million mobile subscribers in India’s rural area. Rural users is more than 50 percent of its total subscribers. Growth potential in India’s rural telecom markets is significantly more than the saturated urban markets. This strong user base is getting ready to utilize India’s 3G revolution. Since Vodafone India is spearheading cost effective 3G package, there will be no going back.

Vodafone’s 3G Investment

Vodafone India MD and CEO Marten Pieters says the company is ready to invest more in 3G if spectrum is available. At present, Vodafone has 3G spectrum in 11 circles and offers nationwide data services through roaming pacts with Bharti Airtel and Idea Cellular.

 

Vodafone’s eagerness to invest in 3G stems from two important factors. One, Vodafone’s data ARPU in the fourth quarter of FY 2013 was Rs 53 against total ARPU of Rs 194.

Vodafone’s Data Growth

The mobile operator’s data ARPU increased 7.5 percent to Rs 57 in Q4 from Rs 53 in Q3, while its total ARPU rose 6 percent to Rs 194 from Rs 183 during the period. Vodafone does not share 3G specific data ARPU.

Also, Vodafone India CEO considers India as the strong market for 3G and not for 4G. The company does not have immediate plans for 4G in India.

3G will be big a booster for Vodafone India since the company has observed 80 percent growth in smartphone uptake among Vodafone’s customers in the fourth quarter.

On top of this, 45,700 TB data has been consumed among Vodafone India subscribers.

Plus, mobile data revenue and voice revenue contributed immensely to 10.6 percent growth in service revenue of Vodafone India in fiscal 2013. Out of this, data revenue alone was Rs 2000 crore, registering a growth of 50.5 percent in FY 2013. Data revenue growth was 51.3 percent in FY 2012.

Share of data revenue to total service revenue is 7 percent. Growth drivers include data ARPU – driven by higher usage per subscriber — and growth in data users. This is because Vodafone is one of the few operators in India that gives more attention to mobile Internet.

Better Mobile Internet Experience

Vodafone India is gearing up for offering better mobile Internet experience to its customers. Vodafone’s post-paid customers, where its large chunk of revenue comes in, stood at 8.6 million.

“There is a shift in focus of Capex from coverage to capacity for data growth and voice minutes,” says Vodafone India CEO.

Its strong 7,800 retail stores and 1.5 million customer touch points across the country are gearing up to promote mobile Internet for future action.

Baburajan K
editor@telecomlead.com