Airtel, Vodafone & Idea up focus on secondary businesses to up revenues: Report

By December 16th, 2016 AT 9:09 AM

Bharti Airtel, Vodafone India and Idea Cellular, India’s top telecom operators have increased focus on their secondary businesses to offset revenue related challenges in their mobile operations, according to an Economic Times report.

These telcos’ respective revenues from the mobility business are set to go down following Reliance Jio’s free offer, coupled with the government’s move to demonetize Rs 500 and Rs 1000 notes. These developments could reduce their Ebitda margins by over 200 basis points (bps) over the next six-to-12 months, and also depress data revenue growth, the report said.

The report said that these telcos have increased focused on businesses like enterprise, home broadband, direct-to-home (DTH) digital TV services, mobile wallets and wholesale global voice and data services.

Airtel, for instance, has increased efforts on the payments bank front, and is rapidly expanding pilots across the country.


An ET source said that Airtel is counting on rapid expansion of its fledgling payments bank business to open new revenue streams, increase customer stickiness and reduce churn over the next three-to-four quarters, amid rising competitive intensity.

Vodafone India’s head for M-Pesa wallets services business, Suresh said there’s a push in the other businesses besides retail. He however added that there has been no change in our (revenue growth) targets for the next few quarters.

Vodafone, which recently acquired YOU Broadband, a leading internet service provider, is set to benefit from this new business area. The telcos is awaiting Foreign Investment Promotion Board (FIPB) approval for buying YOU Broadband.

YOU Broadband’s integration into Vodafone India would enable the telco to counter Reliance Jio more effectively in the broadband space, the report said.

Idea Cellular is also focusing equally on core mobile operations — accounting over 90% of revenues — and other businesses like long-distance & internet services and M-wallet services to address macro negatives posed by Jio’s free services and demonetization, the report added.

“Airtel, by virtue of its comparatively stronger fixed-line network presence and its own international undersea cable system, is better equipped than either Vodafone or Idea to boost enterprise business revenues in the coming quarters,” Jaideep Ghosh, Partner (Management Consulting) at KPMG in India, was quoted as saying.

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Secondary business to further loot the subscribers?.



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