 "Telcos to see more cash from voice")
In the past couple of months, there have been some rounds of cuts in data services rates across the board, primarily to boost revenue from this segment.
According to a recent analysis by the global equity research unit of UBS, telcos are expected to report at least a one per cent rise in voice realisation per minute during the April-June quarter. Some analysts have said it could improve by 1.5 per cent. Voice realisation per minute has been stable for the past five quarters. As telcos have reduced freebies, the growth in voice realisation per minute is expected to sustain for a longer period. This is also because the competition has become more rational, it noted. The average voice revenue per minute is 35p and expected to improve.
According to a report by rating agency Fitch, telcos have regained pricing power by gradually raising rates over recent months. The gradual increase in voice rates is considered positive for the industry, as there had been a prolonged period of price-led competition between 2008 and 2012 that had eroded profitability.
Fitch also said the monthly churn rates are likely to decline by three to four per cent from the eight to nine per cent in 2012. There have been about 65 billion minutes freed annually after small operators had to close operations in India or in most of the circles following the Supreme Court order cancelling 122 licences for alleged irregularities in spectrum allocation in 2008.
This would benefit earlier operators such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications. As estimated by UBS, these incumbents are expected to add about 24,500 voice minutes in 2013-14, an addition of 27 per cent. Vodafone, second largest telecom operator by subscriber base, has reported a 4.5 per cent sequential increase in its voice revenue per minute and a three per cent increase in volume.
Most analysts have estimated a 1-1.5 per cent rise in voice revenue per minute for the Indian operations of the country's largest telco by subscriber base, Bharti Airtel, and the third largest, Idea Cellular, during the April-June quarter. The increase in realisations would result in a jump in profit margin. Kotak Institutional Equities has estimated a 70-90 basis points increase in profit margin for Bharti Airtel and Idea Cellular, on the back of a 1.3 per cent rise in revenue per minute.
According to a recent analysis by the global equity research unit of UBS, telcos are expected to report at least a one per cent rise in voice realisation per minute during the April-June quarter. Some analysts have said it could improve by 1.5 per cent. Voice realisation per minute has been stable for the past five quarters. As telcos have reduced freebies, the growth in voice realisation per minute is expected to sustain for a longer period. This is also because the competition has become more rational, it noted. The average voice revenue per minute is 35p and expected to improve.
According to a report by rating agency Fitch, telcos have regained pricing power by gradually raising rates over recent months. The gradual increase in voice rates is considered positive for the industry, as there had been a prolonged period of price-led competition between 2008 and 2012 that had eroded profitability.
Fitch also said the monthly churn rates are likely to decline by three to four per cent from the eight to nine per cent in 2012. There have been about 65 billion minutes freed annually after small operators had to close operations in India or in most of the circles following the Supreme Court order cancelling 122 licences for alleged irregularities in spectrum allocation in 2008.
This would benefit earlier operators such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications. As estimated by UBS, these incumbents are expected to add about 24,500 voice minutes in 2013-14, an addition of 27 per cent. Vodafone, second largest telecom operator by subscriber base, has reported a 4.5 per cent sequential increase in its voice revenue per minute and a three per cent increase in volume.
Most analysts have estimated a 1-1.5 per cent rise in voice revenue per minute for the Indian operations of the country's largest telco by subscriber base, Bharti Airtel, and the third largest, Idea Cellular, during the April-June quarter. The increase in realisations would result in a jump in profit margin. Kotak Institutional Equities has estimated a 70-90 basis points increase in profit margin for Bharti Airtel and Idea Cellular, on the back of a 1.3 per cent rise in revenue per minute.