There was never any doubt data services would be lapped up by India\u2019s young and also the not-so-young but upwardly mobile, especially with e-retailers falling over each other to sell cheaper smart-phones. By one estimate, it was reckoned the spoils to be shared by telcos could be close to $40 billion in another ten years from around $4 billion in FY15, a near ten-fold growth. That is why existing telcos are spending as much as they are to acquire spectrum and augment networks, and why an RJio has invested around R1 lakh crore in the business. However, the pace at which data volumes and revenues are growing currently is surprisingly slower than anticipated. In the December quarter, Bharti Airtel\u2019s realisation per MB fell 13% y-o-y while that for Idea Cellular fell 17%. While that could be attributed to competitive pricing to woo customers, volume growth at Idea slowed to 76%, resulting in revenues rising at a much slower 46% y-o-y as compared to the\u00a080-100% seen in the past several quarters. For Bharti, volumes grew 73% y-o-y while revenues grew 51% y-o-y. It is early days yet, but realisations could further fall when RJio unleashes its product and needs to acquire customers. At this point, it would seem like realisations could trend down while customer acquisition costs go up\u2014sales expenses for Bharti Airtel are already up from 13.5% of revenues in the December 2014 quarter to 14.9% in the December 2015 quarter. In fact, telcos themselves seem uncertain about what kinds of spends would be needed to fund the business going forward. As analysts have pointed out, Idea has been revising its budget rather frequently, and sharply\u2014for FY16, this is now pegged at R7,500 crore, up from the earlier outlay of R6,500 crore. Given telcos are already highly indebted and that the cost of spectrum isn\u2019t coming down, the higher spends needed to roll out 3G and 4G networks will be a drag on their profits. Depreciation and amortisation costs for Idea rose by about 23%, to R4,677 crore in the nine months to December while revenues rose under 15%; those for Bharti (India and South Asia) grew 17% and under 10%, respectively. Which is why, the government needs to be careful of the prices it is charging for spectrum at the auctions. As this newspaper has pointed out, the price recommended for 700 MHz of spectrum is irrationally high\u2014buying all the 35 MHz on offer at even the reserve price will cost over R4,00,000 crore compared with the R2,90,000 crore the government has earned from five auctions since 2010. Telcos can, of course, stay away from the auction, but it is difficult to expect rationality when the competition is buying up spectrum\u2014any company caught short of spectrum will, as in the past, be in danger of losing customers. That\u2019s not a happy situation for an industry where so many trillion rupees have already been invested.