Cant help it!! As you would be more aware than me on this - Our market always grows rapidly in these kinds of areas.....actually, the population is so large, that the High Fixed costs are recovered almost instantaneously over here, as compared to other nations.
Well... high is relative. Obviously to support so many million customers and a large coverage area, they have to put in sufficient nodes. It's not like they can magically cover 10x as many people with the same number of towers we would use for the same coverage area. Auckland and Mumbai are similarly sized in Square Kilometers (ok it's about 500 compared to 650, but similar enough), but I would say there are only 1/20 as many towers in Auckland to cover that amount of area simply because there is 1/20th of the population.
And pls dont take it as an offence - but once while watching cricket, i think Danny Morrison - the NZ cricketer himself had said - There are more sheep in NZ, then Humans!!
So, i mean to say is, that the costs recovery would take time.....
There are about 47 million sheep in NZ, and around 4 million people, but NZ has had 3G services since 2004 or 2005. The average time to recover the cost on a tower (not a base station, a full-fledged tower) is between 12 and 18 months depending on the population density of the area where that tower physically is - I worked out that based on an average tower cost of US$300k, recovery costs (not including termination rates which are wildly expensive here, or land leases and things of that nature) would be something like 6,600 minutes.
I would say that the towers/base stations cost about the same in India as they do in NZ, since the networks are both built by outside companies (Alcatel Lucent or
Nokia Siemens or whoever), but since minutes are cheaper in India, it's probably going to take a lot more minutes for them to recover the costs. Fortunately, I would say Indians spend way longer on the phone than Kiwis so this shouldn't be too much of a problem.
Of course, Vodafone told me on Twitter that my numbers are wildly wrong but then I went and had a look at Vodafone NZ's accounts (publicly available) to find that I wasn't as far off the bat as they would have me believe: they also claimed to have spent $3bn on the network when their accounts show a total value of about $1.1bn with very high amortization rates, but even with $3bn spent I could only justify the cost-per-customer of about NZ$200 per year - with the (almost minimum) ARPU of NZ$40 (Rs1320) with a grand total of 60 free minutes, this means that if everyone only spends this much, then they are still making 120% profit assuming that NO calls are made between users on their own network.
As for spectrum, Vodafone paid a whopping $27.8 million NZ dollars (about 92 crores) with a lifespan of 30 years, which comes out to less than NZ$1 million per year, and if we assume that Vodafone has 1 million customers (it claims to have 2.5 million, but I suspect this is also landline and broadband customers), so that spectrum works out to under $1 per customer per year, whereas Vodafone India paid about US$2.5billion for a customer base of about 80 million and a lifespan of about 20 years (I think), which works out to about US$1.55 per customer per year.
Anyway, back to what I was saying, recovery will take some time, but not that much. RoI in the Telecoms industry doesn't typically expect to be longer than 5 years.
