'Perception that ‘3G is expensive’ needs to change'

BANGALORE, INDIA: Telecommunication service provider Aircel, whose total subscriber base in the country stands at 65.32 million as of November 2012, says its 3G subscriber base has become four times in the last year.

"While our 3G revenue has grown three times in 2012, our 3G subscriber base is growing at more than the industry average of 12-13 per cent," says Anupam Vasudev, chief marketing officer, Aircel, in an e-mail interaction, with CIOL's Deepa Damodaran. Excerpts:.

CIOL: What is the current status with regards to data revenue from 3G and that of 3G ARPU? Why?

Anupam Vasudev: Aircel believes that data is the future and has a huge potential in India. In such a scenario where our 3G user base is increasing rapidly, our 3G ARPU is expected to fall eventually. However, for the next two quarters, it is likely to remain flat.

CIOL: What are the issues that are preventing 3G data usage uptake?

Anupam Vasudev: Real uptake in 3G data will happen when video demand by the users increases. E-mails and social networking does not require much data. Also, 3G device penetration in India is just six per cent, thus, with smartphone share expected to double between 2013-14 we will see the demand for 3G data to rise.

Moreover, even though Aircel has almost brought 3G to the price of that of 2G, the perception that ‘3G is expensive' needs to be changed which will only happen by generating awareness. We are optimistic that 3G data usage will increase. There have been some positive indicators such as in data traffic, 2G has been outperformed by 3G with 70 per cent growth and that users are willing to spend 40 per cent of their monthly phone bill on internet services.

CIOL: Is there a difference in terms of speed, as against the promised, when it comes to 3G in India? Why?

Anupam Vasudev: There are various bottlenecks the telecom operators in India are trying to resolve with regards to this issue. In India, the telecom operators have just 5 MHz spectrum for 3G, whereas other parts of the world have spectrum ranging between 10-20 MHz which ensures better speed. The internet infrastructure, in general, is still evolving because of which the experience/realized speed by a user is limited. All operators are constantly working towards removing such problems.

CIOL: With voice ARPU very less, what could be new revenue model that Aircel is looking forward to?

Anupam Vasudev: It is not a hidden fact that voice has hit a saturation level and is growing at a slower pace. Aircel is, therefore, looking at a profitable growth model to deal with high operational costs and to increase profit margins. Data is the future market and Aircel, as a brand, has taken a position to play the data game. We intend to increase our share of non-voice revenues and data, and VAS will lead this segment from the front. We are also looking at tapping the rural potential in our country.