Telecom service providers record $20 bn revenue

Bangalore, Jul 11: Telecom service providers in the country posted revenues of about Rs 87,962 crore in 2005-06, up by 30 per cent over the previous year's earnings of Rs 67,523 crore.

The private players had contributed to 85 per cent of the growth (an increase of Rs 20,169 crore over FY 2004-05), according to the 11th annual survey of the Indian Communication Industry, carried out by Voice and Data magazine.

A release from the magazine said the private players narrowly missed overtaking the public players, who had contributed a total revenue of Rs 44,371 crore as against Rs 43,591 crore earned by the private operators.

With a growth rate of nine per cent and revenues of Rs 39,500 crore, BSNL remained the top service provider. Its closest competitor Bharti Airtel brought in Rs 11,663 crore, growing at 46 per cent. Reliance grew at 109 per cent to clock revenues of Rs 11,288 crore and become India's third biggest telecom service provider, the survey revealed.

Voice and Data 100 (Vol II) for FY 2005-06 was based on a survey of all licensed telecom service providers in the country. ''The fast-growing market share and revenues of private players, despite steep tariff drops, are proof that telecom liberalisation was a step in the right direction,'' Magazine Editor Ibrahim Ahmad said.

The survey brought out a range of important information regarding the various segments of the Indian telecom industry. Growth in the services industry was led by cellular services, which grew 57 per cent to post revenues of Rs 35,879 crore. Although this was less than the 63 per cent growth in 2004-05, it was enough to take the mobile services revenue beyond that of fixed services, the survey said. The other highpoints of the mobile industry were expansion of networks in new areas, consolidations and the operators offering virtually every customer segment a personalised tariff structure. Overall, the industry added 38.5 million users in 2005-06. Bharti Airtel was the top cellular service provider, with revenues of Rs 7,928 crore. Tata Teleservices and MTNL were star performers with 345 per cent and 105 per cent growth respectively.

The survey said the fixed services industry overcame the decline in revenues suffered in 2004-05 and grew at three per cent to cross the 50 million subscriber mark in 2005-06. The segment added subscribers at the rate of above 12 per cent. This growth was impressive when juxtaposed with the din from fixed-line doomsayers, the mobile onslaught and widespread surrender of wired phones. IPTV and broadband were expected to drive usage and revenues in the future. BSNL was the top fixed service provider with a 75 per cent share of the market and revenues of Rs 25,195 crore.

The survey said growth rate of National Long Distance (NLD) services revenue doubled from 22 per cent in 2004-05 to 45 per cent in 2005-06, taking the segment's revenues to Rs 9,017 crore. The predominant position of BSNL in NLD services remained unchallenged, with its above 75 per cent market share growing at 35 per cent to gross Rs 6,792 crore. However, exciting times await this sector with most of the other players growing at much above the market average and many new players expected to enter the fray.

For International Long Distance (ILD) services, it was a turnaround year, recording almost 90 per cent growth as against 12 per cent witnessed in the previous year. For the first time, VSNL's share of this market segment fell below 50 per cent, despite the company growing at 72 per cent. The tables were tilted by Reliance, which grew its ILD business at 314 per cent to post revenues of Rs 2,714 crore. The Indian players' quest for more international acquisitions paid them dividends and they were now likely to fight their ILD battles on a global scale.

The internet access business had a quiet year, with an almost flat growth rate of two per cent and revenues of Rs 1,619 crore in 2005-06. However, this growth was double the one per cent growth rate of 2004-05. Broadband subscribers stood at around 1.4 million, not even halfway of the target of three million. Broadband subscribers were thus 18.4 per cent of the 7.1 million internet subscribers and dial-up connections still remained the predominant option at 63.3 per cent, compared to the 84 per cent in FY 2004-05.

The survey said BSNL was again the top ISP of the country, growing at 3.9 per cent to post revenues of Rs 439 crore. Both Sify and VSNL declined by 25 per cent and 34 per cent respectively in revenue terms. VSNL's subscriber base also declined by 21 per cent.

With this performance, the target of nine million subscribers by the end of 2007 seemed a distant goal.

UNI