Rs 300 would be the new ARPU base for top customers
With RJio launching its Rs 303 plan and competitors such as Bharti Airtel responding with its Rs 345 plan, analysts expect users to downgrade from premium plans to those between Rs 300 to Rs 350. In fact, given Bharti’s new unlimited plans, CLSA expects its ARPUs for FY18 on the India mobile business to fall by 15 per cent. About 11 per cent of the user base has ARPU of over Rs 350. From those, about one per cent have ARPUs of over Rs 800, a larger portion of which will probably shift to the sub-Rs 350 plans.
Share of data revenues in FY17 has doubled in 3 years
All over the world, there is a shift to data as a person can make both audio and video calls using data networks and access multiple applications through data networks. The trend is no different in India. From 12.5 per cent of revenue in FY14, data revenue has more than doubled to 26 per cent in FY17 and is expected to again double to 50 per cent by FY19, believes CRISIL Research’s Ajay Srinivasan. Voice has become a commodity and most growth is coming from higher data usage, he adds.
More leverage, more debt
Debt levels could hit the Rs 4.5 lakh crore mark at the end of March quarter, possibly the highest for the sector so far, believes Jagnani of ICRA. The same stood at Rs 4.1 lakh crore a year ago. Most of it is, however, due to the Rs 65,000 crore debt taken due to the spectrum auctions in October, 2016. Companies have had to depend on external funding, equity infusion (in the case of Vodafone) as well as asset sales (such as the one undertaken by Airtel), which have helped keep the debt in check. Net debt to Ebitda is at 5.6 times.
News Source : Business Standard