Data services: New war zone for telcos

Written by fe Bureau | New Delhi | Updated: Nov 30 2013, 10:10am hrs
With India set to overtake US as the worlds second-largest internet user after China by 2014, telcos are launching new devices and slashing tariff plans to maximize revenue potential from data services.

Tata DoCoMo on Friday launched the Photon Max wi-fi dongle, which allows users to create own wi-fi hotspots, offering download speeds of up 0to 6.2 Mbps. Russian mobile operator, Sistema Shyam, last week, introduced the MBlaze Ultra dongle with speeds of up to 9.8 Mbps with which a user can download a full movie in about eight minutes.

Top telecom service providers including Bharti Airtel, Vodafone, Idea and Reliance Communications have slashed internet surfing rates on both 2G and 3G networks by around 80%.

Analysts said telcos are aiming to encourage usage of 2G mobile data for first-time mobile internet users, and then gradually urging them to shift to 3G with no extra charges involved.

For Bharti Airtel, for instance, data usage per customer went up from 133 MBs per customer in the September quarter of 2012-13 to 231 MBs in the same quarter this year. As a result, the average revenue per user moved up R15 y-o-y to R192. Mobile internet is now a major engine of growth for Airtel across geographies, said Bharti Airtel chairman Sunil Mittal.

UKs Vodafone Group also recently announced plans to spend around R7,000 crore to expand and upgrade its data and 3G network footprint in India. Revenue from data usage (browsing the internet on smartphones) accounted for over 8% of Vodafone Indias service revenue in the first half of 2013-14. In the same period, data users rose 33% y-o-y to stand at 42.5 million.

According to the Trai, India has around 165 million internet users, a number that is expected to cross the 330-million mark by 2015.

Data is the next frontier of growth that will offset slowing voice revenues, said Elango T, president mobility at Tata Docomo. He added that data accounted for around 30% of the companys total revenues and we expect this number to go up.