3 Reasons to Believe 3G will Work in India


3 Reasons to Believe 3G will Work in India

Slowly, yet steadily, 3G is starting to work in India. Besides the increasing smartphone & tablet penetration in India, here are three fundamental reasons why we believe 3G will pick up.


Let us take a look at the latest quarterly results of all the major telecom players (see chart below). Most of them have at least doubled their 3G customer base over the last year. On a quarterly basis, all four major telcos we looked at, have had healthy double digit addition to their 3G consumer base.  This makes it obvious that new customers are signing up for 3G services very quickly.

3G Customers
Source: Quarterly Reports


Data subscribers add to the revenue of operators. It’s in their interest to make it work. For instance, the average revenue per user from a data customer for Airtel grew to Rs 55 by the end of March 31, as compared to Rs 47 in the previous quarter. That’s a healthy 16% quarterly growth and a 25% year on year growth. Meanwhile, average voice revenue per user grew to Rs 159 per user at the end of March 2013. That’s a mere 1% year on year growth and 4% quarter on quarter growth. This comes at a time when the total customer base has show marginal increase or even decrease in some cases (see chart below). Of course, we must make allowance for the fact that percentage growth in the case of 3G subscribers is on a lower base compared to that of total subscriber base and hence will look bigger.  Total Customer Base


As part of overall growth strategy, operators across the board are betting on data based services for future growth. Don’t believe us? Lets hear it from the horses mouth. Here’s what the operators had to say.

“Innovation with a focus on 3G data and m-commerce continues to be the next growth frontier. Airtel is focused on 3G through the roll out of new sites across markets to increase user base.” — Airtel, Quarter Report Ending March 2013.


“For Vodafone in India, driving data opportunity is a key priority. Vodafone’s data revenue grew 29% year on year in the quarter ending March 2013 and 6% quarter on quarter.” — Vodafone, Quarter Report Ending March 2013.


“We hold an opinion that there is still a lot of potential for growth in data ARPU and $1 per blended basis and $2 on a 3G basis is far too low. Going forward, we are expecting this number to go up.”– Idea, Quarter Report ending March 2013.

Reliance of course has plans for 4G because they are the only ones with pan India license for 4G.

Data Customers in India
Data Customers in India (Source: Quarterly reports)

What does it mean to 3G usage? Simply put, it means that telcos will push hard to improve 3G penetration.

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