There is a post on Giga OM (http://gigaom.com/2009/01/28/so-far-wireless-data-looks-recession-proof) on how wireless data revenues at the top US carriers are still growing despite the recession. AT&T made $3.07b on wireless data, which amounted to 10% of total wireless revenues in the Dec 2008 quarter (and 8% of 2008 annual revenues). This amounts to a year-on-year growth of 51% and a quarter-on-quarter growth of 12%. The corresponding figures for Verizon Wireless are $2.97b, which amounted to 12% of the quarter’s wireless revenues and 11% of annual revenues. The growth figures are 44% and 6%.
The AT&T investor material at http://www.att.com/gen/investor-relations?pid=262 provides some interesting data.
- Total revenues for the Dec 2008 quarter were 31.1b, a 2.4% growth over the Dec 2007 quarter. Total revenues for 2008 were $124b, a 4.3% growth on 2007.
- While the gross post-paid sub addition was 3.5m, the net addition was much lower at 1.3m. Similarly while the gross subscriber addition was 5.8m, the net addition 2.1m.
- Total number of subscribers at end-2008 is 77m, up 7m from 2007.
- 60m of the 77m subscribers were post-paid.
- Nearly 80 billion text messages in the Dec 2008 quarter, more than double the number for the Dec 2007 quarter.
- Wireless data growth drivers identified as premier network (only US carrier with broad 3G HSPA deployment), premier devices (exclusive deals for high-end devices such as iPhone 3G, Blackberry Bold; quick messaging devices), rich apps and content (mobile TV, video sharing, largest mobile music catalog).
- Postpaid subscriber ARPU at $60 with a wireless data ARPU of $16.3
I looked at the Dec 2008 quarter results for Airtel at http://www.bhartiairtel.in/index.php?id=results to check on how the results compare:
- Revenues in the Dec 2008 Quarter were Rs. 79.4b and 56.1b in Dec 2007 Quarter (a year-on-year growth of 42%).
- Airtel has 86m subscribers, with 8.1m net additions in the quarter.
- 93.5% of the customer base (and 99.6% of the additions) are pre-paid
- ARPU is Rs. 324 ($6.7)
The only statistic that looks similar is the %age of non-voice revenues, 9.5% (with 4.1% as SMS) in the Dec 2008 quarter (10.0% and 4.5% in Sept quarter; 9.3% and 4.4% in the Dec 2007 quarter). This translates to 7.5b in Dec 2008 and 5.2b in the Dec 2007 quarter, a y on y growth of 44%.
Airtel data revenues are growing at the same rate as the overall revenues. Given the growth rate of their overall revenues, specifically growing data revenues may not be a priority at this time. Two of the factors that AT&T mentioned as driving wireless data revenue growth (faster network, better devices) don’t apply in Airtel’s case. I would think that services such as ring-tones and caller-tunes (which do not require superior devices or high speed networks) make up the bulk of the 5.4% of their non-voice, non-SMS revenues.
Indian operators are also likely to increase their focus on non-voice revenues in the future. Will this lead to more instances of operators working with vendors to have devices available exclusively on their network (like the iPhone 3G on AT&T in the US)? Will they subsidize high-end devices as part of service contracts? The alternate path would be for operators to focus on building services that work on any handset the subscriber may choose to buy; in other words, the India handset market will continue to be predominantly retail driven.
