Technology

India's telecom services touches Rs 1076 billion

NEW DELHI: India’s telecom services industry grew by 22 per cent to Rs 1076.81 billion during 2006-2007, helped by a 46 per cent increase in telecom subscriber base.













The total subscribers including cellular and fixed line grew to 206 million during the period, thus ensuring one in five Indians has access to a phone.



But the 12th Indian Telecom Services Business Voice&Data Report (Volume 2) says that despite this impressive growth, the rural teledensity is only 4-6 per cent vis-a-vis urban teledensity of 50 per cent. Most service providers will focus on this gap to grow in the coming years, the survey shows.


 

The annual survey is conducted by Voice&Data, Cyber Media’s flagship magazine for the telecom sector.



Cellular subscribers grew almost 73 per cent in 2006-2007 to touch 157 million mark but the fixed line phone subscribers declined 3.3 per cent, taking the total below 50 million. (48.9 million in 2006-2007 as against 50.6 million in 2005-06).



In the last financial year, India added more mobile lines per month than China. On an average, 5.5 million cellular lines were added every month, taking the mobile subscriber base to 157 million from 91 million in 2005-2006.



Commenting on the survey, Voice&Data Chief Editor Prasanto K Roy said, “This is a nation gone mobile. The money’s all in mobility. So is the growth, and it’s not just the 73 per cent jump in subscribers to 157 million that’s important. It’s the whopping 56 per cent revenue growth to $12.5 billion in revenues that spells a healthy, and competitive, mobile landscape.”



Cellular revenue is now double the $6.7 billion revenue from fixed phones, three times the $4.2 billion from long distance – the main income-earner until recently for telecom. Cellular pushed up the telecom services industry beyond Rs 1000 billion, to a whopping $24 billion level, says the Voice&Data survey.



Revenue from seven telecom services – cellular, fixed line, international long distance (ILD), national long distance (NLD), internet and broadband, VSAT and radio trunking – increased to Rs 1076.81 billion during 2006-07 from Rs 885.22 billion in 2005-2006.

 
Cellular services made up more than half of the total revenue at Rs 561.83 billion. Earnings from mobile services grew 56 per cent as compared to 2005-2006.

Fixed line services chipped in slightly less than a third to the overall services revenue at Rs 301.90 billion, with the remaining coming from NLD (Rs 71.86 billion), ILD (115.06 billion), Internet and broadband (Rs 20.40 billion), VSAT (Rs 540 million) and radio trunking (Rs 360 million).



However, fixed line services, NLD and radio trunking recorded a decline of 11.6 per cent, 20.3 per cent and 5.3 per cent respectively.



BSNL, Bharti, Reliance, Hutch, VSNL emerged as the best service providers, followed by TTSL, MTNL, Idea, Aircel, and TTML. According to the Survey, the top revenue earners across all services during 2006-2007 were BSNL and Bharti Airtel.



Despite a fall in the fixed line subscribers and a marginal decrease in revenue, BSNL maintained its lead this year as well. BSNL recorded revenue of Rs 401.35 billion during the year compared to Rs 401.77 billion in the previous year, way ahead of Bharti Airtel’s Rs 178.88 billion.



Reliance Communications and Hutchison Essar were at third and fourth slots with revenues of Rs 146.84 billion and Rs 105.65 billion respectively,



The other state-run telecom service provider MTNL was at number 7, down from fifth position last year, with a decline of 11.5 per cent to Rs 49.23 billion in 2006-07. Tata Tele Services Ltd (TTSL) climbed up to sixth position from eighth last year.













































































































Top Indian Mobile Operators (Based on Subscribers)



Subscribers (millions)


Growth

Share

SR.
NO


Company

Circles

2005-2006

2006-2007

%

%
1
Bharti Airtel

23

19.6

37.1

90

23.9
2
BSNL

21

18.5

27.9

51

17.8
3
Reliance Communications

23

17.3

27.9

61

17.7
4
Hutchison Essar

22

15.4

26.4

72

16.8
5
Idea Cellular

11

7.4

14.0

90

8.9
6
Tata Teleservices (Group)

20

4.9

11.4

136

7.3
7
Aircel

23

2.6

5.5

111

3.5
8
MTNL

2

2.0

2.8

38

1.8
9
Spice

2

1.9

2.7

41

1.7
10
BPL Mobile (Mumbai)

1

1.3

1.1

(20)

0.7

Total
90.9 157.0 73 100

Source: CyberMedia’s flagship telecom industry journal Voice&Data’s V&D 100 July 2007




The year 2006-2007 was marked by drastic reduction in the cost of owning a cellular handset and a connection. Introduction of life time validity schemes, low cost of services, low roaming charges, low STD cost, and a slew of value added services led to a 72.7 per cent jump in subscribers, according to the survey.



More than three-fourth of the total mobile subscribers were on GSM-based technology whereas the six CDMA operators contributed around 23 per cent.



Bharti Airtel, with maximum subscribers, garnered 23.7 per cent of the cellular market share followed by BSNL and Reliance Communications with 17.8 ,per cent and 17.7 per cent share. Hutchison Essar was at number four with 16.8 per cent share followed by Idea Cellular with 8.9 per cent.



Each of the top five companies achieved more than 50 per cent growth in subscriber base during the year. The survey found that all cellular companies plan to roll-out more services this year. Idea Cellular went public to raise capital for the expansion. Spice Telecom too raised funds from the market last month.



In terms of revenue from cellular services, Bharti was the leader once again followed by Reliance Communications, Hutchison Essar, BSNL and Idea Cellular.



Bharti is present in all the 23 telecom circles with a turnover of Rs 134.31 billion generated from 37.14 million subscribers.



During 2006-2007, the revenue from the fixed line services, including fixed wireless phones, declined by 11.6 per cent to touch Rs 301.90 billion from Rs 341.61 billion in the previous year. The fixed line subscriber base fell 3.3 per cent to 48.91 million from 50.58 million.



BSNL led the market in terms of revenue with MTNL at number two followed by Bharti Airtel, TTSL and Tata Tele Services Maharashtra Ltd.



However, the fixed line revenues of BSNL, MTNL and Reliance Communications fell 16.6 per cent, 17.5 per cent, and 10.3 per cent, respectively during the period.



Bharti Airtel and TTSL beat the trend and posted a revenue growth of 28 per cent and 46.5 per cent respectively.



On the basis of subscribers the market leader was BSNL followed by TTSL at number two and MTNL, Reliance Communication and Bharti Airtel at third, fourth and fifth spots.



Reliance lost considerable market share as its fixed line subscriber base fell by nearly 50 per cent to 1.56 million. Bharti’s subscriber base also fell by 5.2 per cent to 1.27 million.



Though there is a decline in the number of subscribers and revenue, fixed telecom players are upping their ante, says the Voice&Data survey. This year fixed line service providers are expected to launch new services like IPTV and Metro Ethernet that will utilize the existing fixed line infrastructure in the country.



To expand their subscriber base fixed line service providers will look at promoting services like Wi-Fi and WiMax, besides fixed–mobile convergence.

The first volume of Voice&Data’s V&D100 for 2006-2007 had focused on the telecommunications equipment market, which grossed Rs 771.70 billion. Of the total, carrier equipment contributed Rs 427.63 billion, phones brought in Rs 234.52 billion and the enterprise equipment brought in Rs 109.55 billion.



The Top 10 equipment vendors in the country were Nokia (Rs 158.91 billion), Ericsson (Rs 50.04 billion), Motorola (Rs 40.90 billion), Cisco (Rs 40.37 billion), Alcatel-Lucent (Rs 35 billion), Wipro (Rs 34.71 billion), LG Electronics (Rs 31.40 billion), TCS (Rs 30.06 billion), Infosys (Rs 26.81 billion) and ZTE (Rs 25.96 billion).

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