LTE - 40% of data users, 80%+ of usage. Thanks to R-Jio's aggressive push in the past one year, LTE accounted for nearly 40% of the data subscriber base and 80%+ of data usage in India in the June 2017 quarter. Among other takeaways from TRAI's June 2017 performance indicator report (PIR) - (1) consumer-level spends (including service tax) declined again qoq and stood at a measly 0.84% of GDP, (2) net-of-taxes average prepaid spend was a lowly Rs65/subscriber, and (3) voice volumes grew 31% yoy.
June 2017 PIR - another quarter of sharp surge in volumes, both data and voice
Increased adoption of eat-all-you-can (with generous fair usage limits) bundle plans continues to drive a sharp surge in industry-level data and voice volumes. In the June 2017 quarter, industry-level voice volumes rose 31% yoy to 1.51 tn, according to PIR data by TRAI. In absolute terms, wireless subscribers consumed an incremental 118 bn minutes qoq and 357 bn minutes yoy. The incumbents (Bharti, Vodafone and Idea), as a composite, saw their voice volumes grow 92 bn minutes qoq (78% incremental share) and 220 bn yoy (62% incremental share). The increase in incremental share (higher qoq versus yoy) for the incumbents reflects - (1) increased adoption of bundled plans within their subscriber base and also (2) continued loss of volume share for the challenger pack.
Data volumes grew 21.5% qoq and nearly 9X yoy to 4.3 bn GB on the back of a 15.4% qoq and 7X yoy jump in data usage per subscriber to 3.6 GB/month in the June 2017 quarter. On the data front again, the reported data volume of incumbents suggests that their share of incremental qoq data volumes was a healthy 62%. With Jio likely to have accounted for a bulk of the remaining 38%, it is very likely that the challenger pack saw extremely muted growth or even a decline in composite data volumes.
Data KPIs - LTE's dominance rising on expected lines
Of the 410 mn wireless internet users in the country at end-June 2017 (+9.4 mn qoq, +80 mn yoy) - (1) 160 mn were LTE subscribers (+30 mn qoq), (2) 121 mn were 3G subscribers (down 5 mn qoq), (3) 127 mn were 2G (GSM) subscribers (down 15 mn qoq), and (4) 2 mn were on various CDMA platforms (a dying ecosystem).
From a data volume standpoint, LTE accounted for nearly 81% of the total wireless data consumption of 4.3 bn GB during the quarter. Interestingly, this marked a decline from the 85-86% levels seen in the past two quarters. 3G gained share (16.4% share for the quarter versus around 11% in the past two quarters) with 3G data volumes growing nearly 80% qoq. 3G's share gain is misleading, however. The sharp surge in 3G data volumes is essentially on account of the incumbents' LTE subscribers being pushed down to their 3G networks in areas where they have not rolled out LTE yet. To that extent, this sharp surge in 3G data volumes, if anything, reflects poorly on the relative state of LTE networks of the incumbents. We do note that BSNL's aggression could also be a factor here.
Consumer level spends decline further
Net consumer level spends, including service tax, stood at Rs325 bn for the June 2017 quarter, down 1.4% qoq and 27% yoy. At 0.84% consumer spend to nominal GDP ratio for the quarter (and 1% TTM), India remains an outlier. Average prepaid consumer-level spend stood at just Rs65/month for the quarter, down nearly 39% yoy. Postpaid net ARPU fell below the Rs400/month mark for the first time ever and stood at Rs393 for the quarter. Postpaid segment accounted for around 23% of total industry-level consumer spends.