Friday, 24 May 2013

Mobile data nearly doubles in India, 3G adoption still very low


According to Nokia Siemens Network study, both 2G and 3G data grew rapidly, but 3G revenue still account for less the 7 percent of total revenue of operators.

Mobile data consumption in India nearly doubled between December 2011 and December 2012, according to Nokia Siemens Networks' MBit Index study of mobile data traffic generated by both 2G and 3G services.

As per the study, in India, adoption of data services grew by 92 percent between this period. While 3G data traffic increased by 196 per cent, 2G data services increased by 66 per cent during the same period.

According to the study, each 3G user currently consumes close to 300 per cent more data on an average than a 2G user. And currently, a 3G user consumes 434 MB per month on an average while a 2G user consumes 115 MB per month.

However the picture is not as rosy as it appears in the study. For instance, Airtel has only 6.3 million 3G subscribers, which amount to 23.1 percent of its total data subscriber base. Also, in terms of revenue, data makes only 6.5 percent of its revenue base; even average revenue per user from data services is quite low at Rs 55 which is the same for Idea Cellular also.

Vodafone saw data revenue growth of 50.5 per cent during the last financial year and yet it contributes only 7 percent of the total revenue. The firm had a customer base of 152.4 million at the end of fiscal, which includes 37.3 million data users, of which the number of 3G customers stand at mere 3.3 million.

For Idea Cellular, the picture is more or less similar with 6.6 per cent revenue coming from data services. It has only 5.1 million 3G subscribers.

For RCom, which also offers data services through CDMA as well as GSM, figures are much healthier with 7.2 million 3G subscribers and 21 per cent revenue coming from non voice services. The company has not disclosed the exact revenue from data services.

What is also worrying for operators is the slowdown in growth of other value added services. The story is so far very disappointing especially given that the proliferation of smartphones have been phenomenal in the country and therefore it is clearly a failure on part of the operators to cash in on this opportunity to rope in 3G subscribers even when more and more 3G enabled handsets are reaching in the hands of consumers.

Coming back to the report by NSN, in the first half of the research period, December 2011- June 2012, data traffic generated by 3G services increased by 78 per cent while that of 2G services increased by 47 per cent. In the second half, July 2012 - December 2012, data traffic generated by 3G services increased by 54 per cent while that of 2G services increased by 18 per cent on a larger base.

Hence, the growth rate of 3G data in the second half of 2012 was almost triple than that of the growth rate of 2G but on a much smaller base. In the second half, 2G data growth stabilised due to high-end 2G users migrating to 3G services.

The 3G tariff reduction by operators in mid-2012 led to the significant growth in 3G data consumption across the country, with category A circles seeing the maximum impact. 3G services generated one-third of the total mobile data in the country in the second half of the year - up from one-fourth in the first half. However that growth seems to have stagnated in the last few months as most operators have not reported much of growth in data subscriber base in their latest quarterly results.

Another worrying factor for operators is the lack of adoption of 3G services in category B circles. The study reveals that in category A circles, almost 50 per cent data access on smartphones is through 3G, however this figure drops to less than 25 per cent in category B circles.

MBit Index study is based on Nokia Siemens Networks' internal analysis of aggregated data from multiple sources in India. Nokia Siemens Networks is the leading mobile broadband infrastructure vendor in India. The company is also a leading managed services provider in the country, managing 160,000 2G and 3G sites for all the top telecom operators as well as leading supplier of packet core, the gateway to all data traffic in wireless networks.

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