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India's top telecom providers -- but where's the money?
 
 
Indian telecom dilemma: massive user base; miniscule revenue growth

The number of phone users in India  grows at a dizzying pace -- 16 million a month this year -- but  the service providers  are seeing  extremely small revenue growth -- the  latest Voice and Data  industry study  is an amber sign. How long is this sustainable?

Despite a near 50% subscriber growth, the mobile services revenue grew a meagre 3.6% to Rs. 968.60 billion ( Rs 96860 crores) from Rs. 935.22 billion ( Rs 93,522 crores), a survey by the leading Telecom industry journal shows. The tariff cuts and introduction of one paisa per second calling introduced by the new players forced the leading players also to cut tariff. The Indian telecom services industry as a whole ( mobile plus land line ) that grow at 20%, in 2008-09 bowed to internal competitive forces in fiscal 2009-10, slowing to 2.5%, and posted revenues of Rs.1595.1 billion against previous year’s earnings of Rs. 1556.83 billion . Three mobile operators—Bharti, Reliance and Vodafone--now boast of a subscriber base of over 100 million each. The subscriber base for fixed line in the country is languishing at under 37 million.
“This is the worst telecom services revenue growth in the last five years. There is likely to be consolidation ahead which should arrest more tariff wars and revenue attrition. The 3G rollout and rising broadband penetration, including wireless broadband, will also help improve service revenue—but the impact of these will be felt more in fiscal 2011-12 than this year,” Prasanto K Roy, Chief Editor, CyberMedia India, says
Even though most top cities have statistically achieved near 100% mobile penetration, Voice&Data estimates that nearly 20% of the mobile subscribers are inactive. The study reveals that in 2009-10 nearly three-fifths of the new additions came from rural areas.
The popularity of Value added services (VAS), that include the basic SMS, ring-tone downloads, navigation aids and mobile payment features, picked up during 2009-10. However the VAS business is highly competitive, leading to wafer thin margins. And with 3G coming in, this space is likely to get even more competitive and exciting.
The two government players—MTNL and BSNL, who had the first mover advantage in the 3G space , seeded the market by adding just 1.8 million subscribers. However the Indian Government’s target of 20 million broadband connections by 2010 is likely to fall short with the year ending with just 8.75 million subscribers.

Voice&Data Top 10 Service Providers (FY 2009-10) (Rank- Company- Revenue in Rs. croreFY ’08-09 - Revenue growth in Rs FY ’09-10 -  Growth % - Rank in 08-09 )
( 1 crore equal  10 million)
1 Bharti Airtel 36,962 38,800 5.0 1
2 BSNL 35,167 30,240 -14.0 2
3 Vodafone 20,400 23,200 13.7 4
4 Reliance Communications 22,941 22,130 -3.5 3
5 Idea Cellular 10,125 11,390 12.5 5
6 Tata Communications 9,963 11,000 10.4 6
7 Tata Teleservices 6,739 6,900 2.4 7
8 Aircel 3,425 4,700 37.2 9
9 MTNL 4,487 3,650 -18.7 8
10 TTML 1,929 2,300 19.2 10

July 12 2010




    


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Indian telecom dilemma: massive user base; miniscule revenue growth
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