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'Telcos' data revenues will double in two years to $11 bn'

Predicting data revenues for telecom operators to double to $11 billion by 2017-18, a top brokerage says the much-waited commercial entry of Reliance Jio would drive the market further and be best placed with Bharti Airtel to gain from the upcoming boom.

In its latest report, CLSA also says even as existing operators have begun to focus on content, the key differentiator will be network delivery, or the quality and download speed — areas that have intensified ahead of Reliance Jio’s entry.

“Given that each operator’s content is not exclusive and the service differentiation will be led by network experience, operators are rolling out 3G/4G at an accelerated pace,” the brokerage’s study says.

“Also given that content with each operator is not exclusive and can be replicated, we believe content is not going to be the key differentiator among operators,” it says, more specifically.

“Over fiscal years 2015-16 to 2017-18, we expect data revenues to double and Bharti Airtel and Reliance Jio are best-placed to gain, given their lead in spectrum as well as higher fibre and sites on network.”

Qualifying this, the study says the data revenues wil more than double to $11 billion and drive a 9 per cent compounded annual growth rate in the industry revenues to $34 billion, despite the low penetration of data on mobile.

“While the 3G/4G adoption has picked up with subscribers tripling over the past two years to 133 million, penetration is still low at mere 13 percent,” it says.

“Even with total mobile data subscribers at 312 million, mobile data penetration remains low at 31 percent, implying a large growth potential. Reliance Jio’s much awaited 4G service launch this year should help to accelerate this data adoption and expand the market further.”

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