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Telecom subscribers are rising.. are revenues too??

India is one of the world’s fastest growing telecom markets. A sharp reduction in tariffs enabled the telecom companies add a record 20 million subscribers in the wireless segment during the month of March 2010. The addition has resulted in a wireless tele-density of 49.6%, which means nearly every second person in India has a mobile/wireless phone.

Telecom Subscribers in India 

  Telecom Provider Additions during March 2010 Outstanding Subscribers as on31 March 2010
1. Bharti Airtel

              3,000,109

     127,619,314

2. Reliance Communication

              3,008,672

102,422,145

3. Vodafone Essar

              3,628,484

100,858,358

4. Bharat Sanchar Nigam

              2,692,968

69,450,012

5. Tata Teleservices

              2,786,361

65,942,255

6. Idea Cellular

              1,681,059

63,824,688

7. Aircel

              2,000,181

36,861,174

8. MTNL

                   95,207

5,094,016

9. Unitech Wireless

                 708,556

4,264,036

10. Sistema Shyam Teleservices

                 312,780

3,775,144

11. Loop Telecom

                   68,349

2,844,583

12. STel

                 289,728

1,006,827

13. HFCL Infotel

                       526

328,318

  New Launches:    
14. Videocon

32,178

32,178

15. Etisalat

354

354

  Total

20,305,512

584,323,402

Source: TRAI

While two new operators -– Videocon and Etisalat — rolled out their services in March, most of the new subscribers came from the larger, established operators like Vodafone (which accounted for 17.9% of the total increase), followed by Reliance (14.82%) and Bharti (14.77%). The total number of telecom providers in India has risen to 15, however, the top 8 companies account for 98% of the total outstanding subscriber base.

The increase in subscribers does not necessarily mean increase in usage, as a number of connections may have come from existing subscribers on account of introduction of dual-simcard phones as well to try out lower tariffs packages offered due to competition.

Wireline subscriber base at the end of March 2010 remains at 36.96 Million, same as in February-2010. BSNL/MTNL, two PSU operators hold 84.8% of the wireline market share. Overall wireline teledensity is a meager 3.14. Including fixed-line phones, India had 621.28 million phones at the end of March resulting in a total tele-density of 52.74.

While number of subscribers is rising, revenues are expected to fall in the March 2010 quarter. This is because lower tariffs will result in a fall in average revenue per user (ARPU) as minutes of usage are not rising proportionately.

The telecom companies are now relying on 3G services to increase their revenues as demand for 3G is on a rise. Bid amounts at the 3G auction are far above government’s expectations. A bid for pan-India 3G spectrum licence jumped by 139.4 percent above the base price to Rs 83.8 billion. While companies will reap the benefits of providing 3G services to customers in the medium-long term, their working capital management is likely to get stretched in the near term.

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Categories: Telecom
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  1. May 3, 2010 at 11:47 am

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