We hope data price war doesn't go on: Himanshu Kapania

Interview with Managing Director, Idea Cellular

Idea Cellular saw average realised rate for the voice business rise half a per cent in the three months ended December but fall 11 per cent for data because of rate cuts. Though the cuts led to higher data use, Managing Director Himanshu Kapania tells Katya B Naidu he hopes they end soon. Edited excerpts:

Are telcos in a data price war?

Yes, we are. The battle for supremacy in 2009 to 2012 was about voice business. Now, it has shifted to data. There has been a clampdown on free voice minutes, there is an increased frenzy on data rates. We remain concerned about it. I am sure our subscribers are enjoying the benefits.

Will data margins slip further?

We are hopeful the battle does not continue. Price war will lead to cannibalisation. Data was a small percentage of revenues a year ago but not anymore.

Will data rates go up?

We’re just a cog in the wheel.

Do higher data volumes and average revenue for each user (ARPU) make up for it?

While subscriber rates are down, use for each subscriber has increased. There is a steep improvement in 2G (second-generation) and 3G (third-generation) ARPU. The blended mobile data use for each user grew to 309 MB as total data volume exploded to 20.8 billion MB in the quarter from 10 billion MB.

Will Reliance Jio’s entry disrupt the market?

The telecom market has gone through high levels of competition like the entry of CDMA operators and the 2008 jump in subscribers. We are battle-ready but we will wait for Jio’s launch.

What is the best way to buy spectrum — auctions, acquisitions or trading?

We are close to the auctions, so can’t discuss specifics. But by our understanding, there is a large amount of spectrum available across 700 MHz, 800 MHz, 1,800 MHz, 2,100 MHz and 2,300 Mhz bands. Mergers and acquisitions keep happening; the government is also considering trading. So, we will look at the overall road map of the government.

What is your acquisition strategy?

There is no doubt Idea wants to expand its 3G footprint to pan-India from its current 10 circles. Idea will also be an important player for LTE (Long Term Evolution or fourth-generation) services as well.