Indian mobile phones , now a 1 trillion rupee biz: Voice&Data

25th July 2011
Indian mobile phones , now  a 1 trillion rupee  biz: Voice&Data

The scam-tainted Indian telecom services industry grew at 14.9% and post revenues of Rs 1.66 trillion in 2010-11, up from previous year’s earnings of Rs. 1.446 trillion. The cellular services market, the largest among all the communication services offered in the country, grew at 16.6% to cross 1 trillion milestone (Rs 1.022 trillion )inFY2010-11 from Rs 876.8 billion a year before. The fixed lines and revenues, the only significant means of telecommunications until mid 1990s continued decline both in terms of number of connections and revenues (Rs 116 billion), Year-on-Year decline of 15.6%).
These are the latest numbers from telecom industry journal Voice&Data.
Active subscrfibers:
The active subscribers, represented by the figure in the VLR (visitor location database), reported by TRAI was at 574million. Using a very conservative estimate of multi-SIM usage at just under 15%(1.15 SIMs per user) Voice&Data estimated the actual active user base in India at 501 million, for March 2011. This growth indicates huge untapped market for the mobile operators.
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 34.71million.
Even though most top cities have statistically achieved near 100% mobile penetration Voice&Data estimates that nearly 20% of the mobile subscribers are inactive. In 2010-11 nearly three-fifths of the new additions came from rural areas. Voice&Data expects the new customers in future to come mostly from the rural markets. The International LongDistance (ILD) segment posted a 10.1% growth to touch revenue of Rs. 226. 07 billion in FY11 compared to Rs 205.3 bn in FY10. Tata Communications, was the largest ILD player, posted revenue of Rs 8,6.72 bn showing a growth of just 0.5%,smaller players like Verizon, Idea and Aircel grew at a very healthy rate, at 61.7%,59.3% and 43.9% respectively.
The two PSU players -- MTNL and BSNL, who have the first mover advantage in the 3G space -- seeded the market by adding 1.8 million subscribers.
Broadband, the fifth large segment of the telecom services space, posted revenues of Rs. 68.46 bn recording a growth of 22.4% over last year’s earnings of Rs 55.91 bn. While BSNL and MTNL saw 40% and 32.9% growth in FY2010-11 in their broadband revenues respectively, the other state-run telecom operator MTNL grew just 8% over the same period.
The industry failed to achieve the Indian Government’s target of 20 million broadband connections by 2010 even by end of March, 2011, ending with just 11.87 million subscribers. Here also, the top 30 cities contributed nearly 60% to all the broadband subscribers.
The popularity of Valueadded services (VAS), that include the basic SMS, ring-tone downloads, navigation aids and mobile payment features, picked up during 2010-11. The vast potential of the Indian market kept the VAS providers on their toes to build content and services focused on the Indian market. The VAS business, fast growing in terms of number of players, is highly competitive leading to wafer thin margins. And with 3G services proliferating, this space is likely to get even more competitive and exciting. July 25 2011