Mobile phones to exceed fixed phones by Dussehra

The verdict is clear; on Dussehra day, mobile phones would take over the fixed lines in terms of subscriber base. According to VOICE&DATA estimates, by the end of October, there are going to be over 45 million mobile phone subscribers in India as compared to nearly 44 million landline users. 

“This will be a historic day for Indian telecom. And the future will be even more exciting with about 110 million new subscribers coming in the next three years,” said VOICE&DATA editor Ibrahim Ahmad, in anticipation of the moment.

Ever since their introduction in 1994, mobile phones have never looked back. Growing at over 100% per year in 2003—04, VOICE&DATA estimated a growth rate of 134%, mobile phones achieved the milestone in just 10 years, while it took almost 50 years for fixed phones to get to the 40 million mark. 

Telecom Regulatory Authority of India is expecting 200 million subscribers by 2007 of which 150 million are expected to be using mobile phones. 

However, a closer look at the mobile industry shows that the initial five years were difficult for the cellular companies. The call rates were high, there was ambiguity in policies, and companies were still busy in finalizing their growth charts. With Tatas and Reliance stepping in, the real game began. It was well supported by the National Telecom Policy in 1999.

After NTP 99 became operational, the call charges dropped from Rs 16.40 per minute to less than Re 1 in 2004. India is one of the lowest cell phone tariff countries and this gels perfectly with the socio-economic conditions here and helped register the high growth rate. Not only the tariffs, the move from 'all party pays' to only 'calling party pays' attracted more users to mobile
phones. But competition was the main factor that drove the tariffs down. 

In 2001, BSNL and MTNL entered the mobile arena as the third operators. And with the entry of Reliance, riding over the CDMA network, the existing players-Bharti, BPL, Hutch-had to rethink their business plans. The smaller regional players took the exit route. Massive consolidation moves are being made today to increase the subscriber base.

While BSNL promoted an all India competition on the GSM networks, Reliance played the low tariff card to take the phones to masses. And it is no surprise that just a shade over a year, Reliance has 18% of the mobile market share and has been swelling its base by over 350% per year.

The Unified Access Regime, which came into effect from November 2003, is helping telecom operators to become integrated telecom players. TRAI and TDSAT have been trying hard to remove the friction points in the policies, to help create a smoother growth of the industry. Issues like access deficit charges and license fee, coupled with high bank guarantees are yet to be resolved. 

CYBERMEDIA NEWS

NEW DELHI