Post NTP-12 policy approval,
there are round of assessments regarding the impact of One License-One
Geography on the potential revenue stream of mobile operators and its spill
overs on the ecosystem players. Regulators are pushing to the limit to make
sure that the intended policy comes into force by March 2013 which seems little
difficult. The GSM association is raising concerns about the impact on revenue
and job losses. One of the CDMA operator welcome the move and sees
opportunities around it.
I see huge benefits for Telecom
industry ecosystem players’ barring the OEM’s involved in roaming related
product or service offerings.
According to TRAI documents, the
GSM and CDMA operators are generating 8.5% and 3.9% roaming revenue out of
total mobility revenue and it is decreasing every quarter. On a consolidated
basis, roaming revenue contribute around 7% of the total mobility revenue which
translate to $2.25Bn. At high level, it looks like that it would have major
impact on mobile operator revenue stream, EBITA and EBIT level. It is true that
it would impact OEM’s offering roaming product or services to mobile operators
on network utilization and revenue share model.
According to reports, around 10%
of the total mobile subscriber base contributes to roaming revenue. It is also
noteworthy that there are around 71 Mn subscribers carry more than one SIM’s.
The voice usage pattern of frequent travellers in India is to use local SIM to
bypass high roaming charges.
In the recent quarter, mobile
operators raised tariff by 20% in some circles. They also indicated that the
cost structures of offered triple play services are still very high and would
be forced to increase tariff in coming quarters to be able to sustain.
In case of free national roaming
under one license, one geography regime, it is widely expected that mobile
operators is going to increase the tariff again. The recent tariff front
initiatives by mobile operators would be beneficiary to wireless ecosystem
players
The tariff would be raised for on
the pretext of roaming charging abolishment and would be applicable to all user
bases. The tariff uniformity across service geography is going to be positive
for mobile operators as against current scenario of different price point for
different circle based on the user paying capacity.
In my point of view, Metro
applicable voice price point would be enforced across the service geography. It
is going to increase voice realised revenue per minute for most of the mobile
operators. The network MoU per subscriber is going to witness healthy growth as
it is going to remove the user mental block of different tariff points.
The price points for data and
MVAS would be kept same across service geography. It would have direct positive
impact on MVAS ARPU. The MVAS APRU is going to increase from current $1.98 per
active subscribers. The negative growth factor inflicted due to MVAS regulation
might see a reversal with rise in MVAS price points even with reduced level of
active MVAS userbase. It is also expected that carriage charges go down
drastically as the carriage cost would be based on bandwidth centric rather
than content centric as per the NTP-12. It will have direct positive impact on
content price points and subsequently usage.
On higher realisation of revenue the revenue realization of MVAS
provider is going to be higher. It would enable higher data, MVAS user
adoption, usage.
On the data adoption level, it is widely
expected that license service area would carry same tariff points and would
trigger huge growth in data segment, revenue realization and higher share of
data revenue out of total mobility revenue.
The most probable above mentioned
dynamics is going to trigger higher revenue realization potential across
userbase and technology upgrade from segregated service delivery to centralized
service delivery mechanism. It would create millions of $ opportunity for
technology enabler for network upgrade.
In my point of view, the upcoming
revenue opportunity through one license-one geography across services would be
much higher than the lost revenue from abolishment of roaming revenue. The
government is going to get the higher revenue realization through multiple
charges and tax which accounts for 35% of Gross revenue.
The struggling MVS ecosystem players are going
to experience growth moving forward.
In conclusion, it is very good
opportunity for mobile operators to mitigate any tariff wars and increase
revenue across triple play service and products. The clarity on Unified
licensing regime is going to define and refine wireless ecosystem segment. It is
going to be positive EBITA contributory for wireless sector. It would be
interesting to see how Tier2/tier3 mobile operators position themselves given
the attached legal, financial issues with them. The challenging regulatory
directives can be easily played out to create business opposition. We just need
an eye to catch it.
