Indian Telecom Services Grow 21%

The Indian telecom services industry revenues grew by 21.3 percent to

touch Rs 130,561 crore in 2007-08 as it its subscriber base grew by 66 percent

to add 100 million new subscribers, according to CyberMedia's Voice&Data annual

survey of the telecom industry

The revenues of cellular, fixed line, national long distance (NLD),

international long distance (ILD), broadband, VSAT and radio trunking were added

to calculate the size of the Indian telecom services industry.

Cellular revenue contributed a major chunk of telecom services revenue

followed by fixed line and ILD. According to the 13th annual V&D100 survey,

around 59 percent of the telecom services revenue came from cellular business

that touched Rs 76,608 crore in FY 2007-08. This represents a growth of over

36.4 percent over Rs 56,183 crore earned in the previous year.

Significantly, the majority of new subscribers are now coming from towns and

villages with populations of less than 20,000. The mobile network now covers

over half of the nearly six lakh towns and villages. The mobile services can now

be bought from nearly a million outlets-a number that far exceeds the number of

FMCG or even the postal outlets. Expansion into rural areas, lowering entry

price of owning a handset through attractive offers and customer retention

efforts helped ramp up subscriber-base and revenues.

Expansion into rural areas, lowering entry price ofowning a handset through attractive offers and customer retention efforts helps ramp up subscriber-base and revenues

The second biggest contri­butor to the telecom services business was the

fixed line contributing 20.4 percent to the entire services business. The fixed

line business, however, recorded a de growth of 11.6 percent to reach Rs 26,692

crore in FY 2007-08 from Rs 30,190 crore in FY 2006-07.

ILD, on the other hand, contri­­buted around 8.8 percent of the telecom

services to touch revenues of Rs 11,532 crore in the last FY, up from Rs 11,506

crore in FY 2006-07. NLD segment grew at 35.4 percent to contribute about 7.5

percent to the telecom services business with revenue of Rs 9,732 crore in FY

2007-08 up from Rs 7,186 crore in FY 2006-07.

Broadband showed a pheno­menal growth of 162.7 percent to touch the revenue

of Rs 5,359 crore in FY 2007-08 from Rs 2,040 crore in FY 2006-07. Though the

revenue from broadband saw a robust growth, this is not true for the subscriber

base. The subscriber base grew from 2.5 million in FY 2006-07 to 3.9 million in

FY 2007-08. VSAT and radio trunking together contributed 0.5 percent to the

telecom services revenue.

A booming economy, easing of entry barriers to mobile access and lowering of

tariffs fuelled the growth in a year when the country added over 104 million new

subscribers making India the second fastest growing telecom market in the world.

Recent government policies aimed at creating affordable connectivity for common

man across the country also served as a catalyst.

Commenting on the telecom revolution in the country, Prasanto K Roy, Chief

Editor of CyberMedia's business publications said, “With India's telecom tariffs

still the lowest in the world, there's enormous and sustained growth beyond the

metros. So telcos see huge opportunity in the two-thirds of Indians still

untouched by the mobile phone revolution. They need to keep leveraging SMS,

data, and other value added services, and finding other innovative ways of

remaining profitable despite the low and falling ARPU (average revenue per

user).”

“The year ahead needs to see some pending issues settled for telecom: such as

the introduc­tion of 3G and number portability in the mobile arena, and the

abysmally low broadband penetration, in the fixed-line space,” added Roy.






The top 10 by revenue

The top five players in FY 2006-07 retained their positions in the year under

review. Even with a 12.1percent decline in revenues, BSNL hung on to its number

one position with revenue of Rs 35,296 crore. Bharti Airtel with revenue of Rs

26,436 crore is at the second spot. Reliance Communications and Vodafone with

revenue of Rs 18,638 crore and Rs 15,477 crore are at nuber three and four

respectively.

Idea Cellular moved to number six in FY 2007-08 from number eight in FY

2006-07 with revenue of Rs 6,720 crore. Tata Teleservices has come down to

number seven and MTNL slipped seventh position in 2006-07 to number eight.

The top five players based on cellular subscriber base were Bharti (62

million), Reliance (46 million), Vodafone (44 million), BSNL (41 million) and

Idea cellular (24 million).

DQC News Bureau