Ringing Alarm Bells: Mtnl Base Down 1.37 Lac In Q2

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REENA CHOUDHARY

MTNL, one of the two leading providers of fixed telephony services in the country, is witnessing a rapid erosion in its subscriber base. The company has lost 1,37,000 fixed line subscribers in the quarter ended June ’04, the highest ever loss in a quarter.

Increasing affordability of mobile services and aggressive strategies of private players are regarded as the main reasons for this.

In March ’03, the company had a subscriber base of 4.63m in the fixed services space. Since then, the company has lost about four lakh subscribers.

In the quarter ended June ’03, MTNL’s subscriber base came down by more than a lakh.

The subscriber base of the company was down 97,000 in the quarter ended September ’03, and another 93,000 left the company in the quarter ended March ’04.

The quarter ended December ’03 had seen MTNL making a slight comeback, with its fixed line subscriber base increasing by 2400.

In the fixed telephony sector, the company had a market share of 10.2% at the ended of March ’04, compared with 11.2% at the end of March ’03. BSNL has a market share of 84% in the fixed line business. BSNL operates all over India, while MTNL operates only in Mumbai and Delhi.

During the year to March ’04, MTNL lost around 2,50,000 subscribers in the fixed services space, while BSNL added 2,10,000 subscribers. Tata/Hughes was the best of the lot during the year adding 5,50,000 subscribers, followed by Reliance, which roped in 5,00,000 subscribers. Bharti gained a significant 2,70,000 subscribers, whereas HFCL and Shyam both gained 40,000 subscribers each.

Thus the 3% growth in fixed line subscribers in the previous fiscal was distributed between Bharti, Tata/Hughes, Reliance, HFCL and Shyam.

On the other hand, while 1.36m subscribers were added to the fixed line subscriber base, mobile space added about 20m subscribers in FY04 — 13m in the GSM cellular space and 7m in the CDMA (WLL) segment.