New Delhi July 24, 2011:: The Indian telecom services industry that faced grave accusations of scams last fiscal, put up a brave fight to grow at 14.9% and post revenues of Rs 166,168 crore in FY1010-11, up from previous year’s earnings of Rs. 1,44,600 crore.

This has been revealed in Voice&Data 100, the second volume of the survey by the leading Telecom industry journal Voice&Data. Telecom services revenue include revenue from cellular, fixed line, National Long Distance (NLD), International Long Distance (ILD), broadband, VSAT services.

The cellular services market, the largest among all the communication services offered in the country, grew at 16.6% to cross the Rs 100,000 crore revenue milestone (Rs 102,230 crore) in FY2010-11 from Rs 87,680 crore 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 11602 crore, YoY decline of 15.6%).

Commenting on the way ahead for the telecom industry as it struggles to deliver in an ever evolving policy roll out Mr. Ibrahim Ahmad, Group Editor of Voice&Data said, “The recent tariff hike will help the industry invest in telecom infrastructure that delivers better customer experience through improved quality of service.”

Active subscribers cross 501 Mn as SIM cards swell to 812 Mn
Even though the telecom regulator reported India's mobile subscription base at 812 million at the end of March 2011, that number includes a large base of inactive subscriptions. This includes those who are in the 'grace period' after their SIM validity has lapsed, with them having not charged their SIM cards for months or even years.

The active subscribers, represented by the figure in the VLR (visitor location database), reported by TRAI was at 574 million. 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 34.71 million.

. 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 journal from CyberMedia, the largest specialty publishers in south Asia, reveals that 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.

Fixed Line Posts Negative growth
Cellular, Broadband and ILD grow at Healthy rate
While the top three fixed line players—BSNL, MTNL and Bharti Airtel—reported a revenue decline, others like Reliance Communications, TTSL and TTML posted growth in revenues.

The International Long Distance (ILD) segment posted a 10.1% growth to touch revenue of Rs. 22,607 crore in FY11 compared to Rs 20,530 in FY10. While Tata Communications, the largest ILD player, posted revenue of Rs 8,672 crore 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 ILD segment grew as Indian telecom operators increased their presence in foreign markets. This brought additional ILD revenue for domestic operators. With falling rates there has been a substantial growth of inbound voice traffic into India.

According to Voice&Data estimates, 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. 6,846 crore recording a growth of 22.4% over last year’s earnings of Rs 5,591 crore. 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.

Broadband growth still lagging targeted 20 Mn connections by 2010
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 Value added 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.

The Top 10 Service Providers
Bharti Airtel, retained its position for the second consecutive year, by posting a growth of 42.1%, to end the fiscal with revenues of Rs. 59,467 crore. Vodafone Essar posted revenue of Rs 27,348 crore in FY11 from Rs 23,559 showing a healthy growth of 16.1% and emerged as the third largest player. Reporting a marginal growth of just 4.4% Reliance Communications was at No. 4 with revenues of Rs. 23,108 crore.

The leading public sector giant BSNL saw a drop in its revenues for the third consecutive year to end the year with Rs. 28,877 crore, a drop of 10% from its last year’s earnings of Rs 32,072 crore. Idea Cellular, Tata Communications and Tata Teleservices retained their slots at No. 5, 6 and 7 with revenues of Rs. 15,503 crore, Rs. 11,932 crore and Rs. 8,280 crore, respectively.

Aircel retained its No. 8 slot--by recording the highest growth of 44.1%--among the Top 10 players, to post revenue of Rs. 5,392 crore. MTNL’s revenue dropped nearly 22%—the biggest drop among the top 10 players--to post revenue of Rs. 3,951 crore at No 9.

Telecom Equipment market plunges 2.52%
Voice & Data had in June 2011 reported that the revenues of the Indian telecom equipment industry plunged 2.52% to touch Rs 1,17.039 crore in 2010-11, from Rs 1,20,069 crore in FY2009-10.

This together takes the size of the Telecom (equipment and services) industry size to Rs 283207 crore in 2010-11, up 7% from Rs 264669 crore reported in 2009-10.

The survey 'V&D 100' volume 1 covered over 500 telecom companies in India spanning carrier equipment, enterprise communication equipment, and user device manufacturers.

According to the annual telecom industry survey, the 16th from the specialty publishers CyberMedia, close to half of the telecom equipment revenue came from carrier equipment manufacturers, which saw a dip of 12.12% to touch Rs 58,294 crore during the year. In FY2009-10, the segment registered revenue of Rs 66,332 crore.

The enterprise equipment vertical grew at 0.87% to report revenues of Rs 24,023 crore for the same period from Rs 23,815 crore in FY2009-10. The user device segment that includes mobile handsets, fixed phones, data cards and tablets, contributed more than one-third to the total telecom equipment industry, at Rs 34,722 crore recording a growth of 16.04%.

About V&D100
V&D100 is the most comprehensive annual survey of the Indian equipment industries and telecom services. It is the most trusted and widely used survey for those seeking authentic information on Indian communications. It is also the most comprehensive, as it covers a wide range of segments and is the only 'single source' of such diverse information. Or www.voicendata.com

About CyberMedia
CyberMedia is the largest specialty media house in South Asia and amongst India's top five magazine publishers. With 15 publications, 12 websites, over 100 events and two weekly TV programs, it reaches out to a community of over 1.5 million people. Its brands have consistently been leading in their respective domains. They cover infotech (Dataquest, PCQuest, ciol.com), technology (MIT’s Technology Review), telecom (Voice&Data), biotech (BioSpectrum), entrepreneurship (Dare), outsourcing (Global Services), and consumer electronics (Living Digital, ld2.in).

Its Media Services include market research firm CyberMedia Research; and Content Matrix LLC which provides through its subsidiaries, custom publishing (TDA Group LLC) and content management services (Publication Services Inc. and CyberMedia Services).

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