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Tariff cut led to a doubling of 3G data usage in 1 month in India: Nokia Siemens Networks

The recent slashing of 3G tariffs by leading operators such as Bharti Airtel, Vodafone and Idea led to a doubling of data usage in just one month, Nokia Siemens Networks, which runs nearly 30% of India’s mobile networks, said.

About two months ago, Indian operators had cut the price of 1 GB of 3G data to about Rs 200 per month from about Rs 350 per month. Similarly, the rates of higher usage packs were also cut, especially by Vodafone. Idea users, however, saw the prices of high-usage plans go up during the period.

However, according to Nokia Siemens, which has contracts with various vendors to run their networks for them, the increase in usage was immediately visible after the tariffs were cut.

“The recent tariff reductions in 3G services have resulted in doubling 3G data traffic month on month .. affordable, high-speed broadband availability encourages heavy data consumption,” it said in a report on India mobile data usage.

However, the report also pointed out that 2G networks (GPRS and EDGE) contributed over 75% of the total data traffic generated on mobile networks in the first six months of 2012.

However that is likely to change as 3G data traffic is growing faster than that generated by 2G. According to the company, a first-time 3G user consumes close to 400 MB (megabytes) of data every month compared to about 100 MB consumption over 2G.

Traffic generated by 3G services has increased by 78% in the first half of the year compared to the second of 2011, while that of 2G services has increased by 47%.

Nokia Siemens Networks’ MBit Index also found that 3G data use is rising in metro telecom circles while 2G use is stabilizing in the region.

As expected, the fastest growth in 3G came from Category B circles — which include semi-urban states Madhya Pradesh, Haryana etc. 3G was always seen as having better chances in semi-urban areas as these places have poor landline or DSL Internet facilities.

3G data consumption grew at more than 87% between December 2011 and June 2012 in these circles.

“Category A and B telecom circles together contribute 72% of mobile data traffic, thanks to improved internet speed on 2G networks, and the availability of 2G and 3G dongles at affordable prices,” the report said.

Across India, mobile data usage saw a 54% increase between December 2011 and June 2012.

The report also analysed mobile data usage on 2G networks. Web browsing contributed 81% of 2G data traffic while downloading videos constitutes 17%.

Multimedia content traffic over 2G networks across the country increased by 4% from December 2011 to June 2012.

“Nokia Siemens Networks’ MBit Index indicates that despite low 3G device penetration, by the end of June 2012 3G has outpaced 2G in terms of data traffic growth .. with 3G data now generating 25% of the country’s total mobile data traffic, 3G is likely to be the driver for continued high data growth in the country,” the report said.

“Our report highlights India’s enormous appetite for consuming data services on the go and hence the need to provide high quality mobile broadband services to satisfy users,” said Sandeep Girotra, head of India region at Nokia Siemens Networks. “2G has been relatively successful in driving mobile broadband use in India, but we are now witnessing 3G pushing the mobile broadband use to unprecedented levels.”

“3G network coverage, especially in residential areas, needs to be enhanced. In addition, further improving the quality of data services and fulfilling expectations of various user segments are vital to acquiring, satisfying and retaining mobile broadband customers,” said Girotra.

The MBit Index report is based on data across all the 2G (GSM and EDGE) and 3G networks managed by Nokia Siemens Networks for operators in India. The company currently provides 30% of the total 2G and 3G networks in India which provide services to about 300 million subscribers.

Read the full report here

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