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