Mobile Subcriber Base In India At 82.21 Million By February End

[Arun 795]

India adds 1.11 mn CDMA mobile users in February

Reuters

New Delhi, March 5, 2006

India's CDMA carriers, led by Reliance Infocomm Ltd, added 1.11 million new wireless users in February in the the world's fastest growing mobile market, an industry body said.

Last month's addition takes the overall CDMA mobile user base to 19 million, the Association of Unified Telecom Services Providers, representing four carriers, said in a statement.

That takes the total mobile user base in Asia's third largest economy to 82.21 million - more than the entire population of Germany. The remaining customers use services based on the more common GSM technology.

Nine GSM carriers are yet to report for February.

The CDMA association said top-ranked operator Reliance Infocomm added almost 804,000 mobile users, boosting its customer base to 14.6 million.

Reliance Infocomm's parent firm, Reliance Communications Ventures Ltd., is due to be listed on stock exchanges on Monday.

Second-ranked Tata Teleservices Ltd added 313,192 mobile customers, raising its user base to 4.4 million.

Local mobile call tariffs as low as 2 US cents a minute are driving increased cellular usage as intense competition and expansion of networks in untapped rural areas fuel demand.

Less than 8 percent of the billion-plus population use wireless facilities.

Both Reliance and Tata compete mainly with GSM carriers Bharti Tele-Ventures Ltd, state-run Bharat Sanchar Nigam Ltd. and Hutchison Essar Telecom Ltd, the Indian wireless operation of Hong Kong's Hutchison Telecommunications International Ltd.

and the battle continues as the Indian operators are on a roll...

India Calling

TIMES NEWS NETWORK [WEDNESDAY, FEBRUARY 15, 2006 12:59:41 AM]

The sunrise sector of mobile telephony has always been seen as being one that would fulfill its potential in India rapidly.

And if the speed with which mobile phone penetration has spread in India over the last couple of years wasn’t evidence enough, the results of the survey conclusively demonstrate the level of importance consumers attach to mobile telephony — and to mobile services, in particular.

At a time when mobile penetration, which stands at 85 million, is gearing to compete with TV penetration (110 million), and concepts like the sub-Rs 1,500 handset and ‘unlimited lifetime validity’ for pre-paid mobile connections, every single player from BSNL to Airtel to Reliance Indiamobile to Tata Indicom to Idea Cellular has climbed in the overall rankings.

Expectedly, BSNL, with its largest footprint, has maintained its lead in mobile services. This time, it has shot up to No 72 in the overall rankings, up from No 90. The rest of the operators, however, haven’t been left behind — some, in fact, have literally pole-vaulted their way up. Reliance Indiamobile and Idea, for instance, have jumped 20 ranks, while Airtel has scaled 41 places. Tata Indicom has been the most impressive though, jumping 52 spots. The important thing to note is that while there was just one mobile service brand (BSNL) in the Top 100 in the last survey, this survey has four such brands in the Top 100.

While all players have climbed this year, Airtel, however, has out-maneuvered Reliance Indiamobile to take the second position in the list of most trusted mobile service providers. “We have played a relationship strategy rather than a price strategy last year.

Whether it was our customer in Trichy, in Mumbai or in the rural heartland, we have invested in building long-term relationships with them,” says Hemant Sachdev, CMO, Bharti Televentures, and director – mobility.

However, there’s a defense that’s been prepared for this swap in the No 2 and No 3 spots — there are over 250 handset model choices available in GSM, as opposed to around 30 in CDMA.

“In this space, consumers talk about what’s going to be their next handset, and not their next service provider, as the overriding emphasis is on upgradation of handsets.

As currently there’s greater choice in GSM, it’s natural that GSM operators gain,” explains Sanjay Behl, head – branding, Reliance Infocomm, a brand that has maintained a price leadership throughout, and emerges as the most trusted mobile services brand in the less than Rs 2,500 monthly household income segment.

The northward trend in mobile mania shows up even more sharply when one views the list of Top 50 service brands; as many as six cellular service brands are in the Top 20 — of which four (BSNL at No 3, Airtel at No 4, Reliance Indiamobile at No 6 and Tata Indicom at No 7) are in the Top 10.

While BSNL emerges as the most trusted mobile service brand in the south, the east and the west, in the north, Airtel is the first name among cellular operators.

Mobile tariff war: How far can operators take it?

The Financial Express

Saturday, March 04, 2006 at 0000 hours IST

It’s a war in the telecom marketplace as private operators rustle up their answer to BSNL-MTNL’s OneIndia plan in a bid to ward off subscriber migration and shore up their volumes in the new access deficit charge (ADC) regime. As soon as the Telecom Regulatory Authority of India (Trai) announced moving ADC to a revenue share of 1.5% (1.5 paise per Re 1 call per minute), that argument was also dashed and players have had to offer alternative tariff plans.

The last two days have seen some of the most aggressive telecom plans India has ever seen. The mad Re 1 blitzkrieg that began with Reliance Infocomm’s pre-emptive offer on new year’s eve shows no sign of slowing down. Service providers like Airtel and Idea have pitched Rs 1 STD rates to pre-paid users (which form 76% of the 81 million mobile users in India) at a recharge value of Rs 899 valid for one month. Both these coupons carry a talk value of Rs 550 (effectively 550 minutes of calls at Re 1/min). BSNL/MTNL are offering Rs 550 talk value at Rs 799 which effectively means BSNL/MTNL users get the same talk value for Rs 100 less. Tata Tele prepaid users have to recharge at Rs 400 and get a Rs 150 talk time.

Hutch has the most aggressive pre-paid plan with an offer of Re 1 rates to pre-paid customers at a deduction of Rs 250 from the balance talktime (Against Airtel and Idea’s Rs 440 deduction and BSNL/MTNL’s Rs 340 deduction towards service charge/rental).

In contrast with prepaid segment, the Re 1 rates can be quite a hit in the post-paid segment. Airtel, MTNL, BSNL and Idea are offering Re 1 flat rate on STD calls to anywhere in India at a monthly rental of Rs 299. Reliance post-paid subscribers have to pay Rs 499 to avail of India One rates. Hutch’s post paid plan offers customers Re 1 rates at a monthly fee of Rs 250 over and above the existing monthly rental. Tata Teleservices post-paid users have to pay a monthly rental of Rs 299 for the Re 1 plan.

The disruptive factor

OneIndia threatens to completely restructure operators revenue patterns over a period of time. The plan will lower the percentage of roaming revenue to total revenue. For instance, Airtel’s India Roam plan offers Rs 1 rate while roaming too by a monthly rental of Rs 499. Roaming revenues currently account for 11% of total revenues of GSM players.

Average revenues per user (ARPUs) which are already falling are projected to decline further though experts argue that rise in volumes will make up for the loss in overall revenues to the operators. India added more than 5 million subscribers in January.

The OneIndia plans will, however, increase share of rental revenue which account for 31.6% of total revenue of GSM players. Subsequently, the plans will reduce revenue from call charges which formed the largest portion at 42% of operators’ revenues.

Yet another equation that will change is that postpaid ARPUs of Rs. 646 per month were about 2.3 times that of prepaid ARPU of Rs. 284 per month. Prepaid ARPUs are expected to narrow the gap.

Said Alok Shende, Director ICT practice Frost & Sullivan: : “ARPUs will come down in short term but climb back. Now, VAS (value added services) like mobile commerce, internet, ringtones, games, movies, etc will drive revenue generation. Tariffs can come down lower than this with complete abolition of ADC.” All India ARPU for the quarter ending September, 2005 was Rs 374, a decline of 2.6% compared to Rs 381 in June, 2005. Since September, 2004, all-India ARPUs fell 7.4%.

More tariff cuts?

Tariffs seem to have really hit rock bottom. After the new Trai regulation, a STD call charge can be broken up into three components - access deficit charge (now 1.5 paise), mobile termination charge (30 paise), career charge (65 paise). All this adds upto about 97 paise. So, in effect 3 paise is what remains as an operator’s profit in a Re 1 per minute call.

Can call charges drop lower than Rs 1?. Larger operators like Airtel, Reliance and BSNL who carry calls on own network, bypassing any carriage charge, can still afford to cut tariffs. But smaller operators with lower volumes and less infrastructure may feel the heat.

The next stage, of course, will be when over a period of time the market moves in the direction of more mature markets where unlimited calls come for a fixed rate per month like SBC’s $18 per month in the US. Most such offers, though, come in markets where the growth begins to stagnate. India’s still far from that.

[theking 35]

$18 per month for unlimited calls !!!...thats called compitition....

But can understand that if the arpu is Rs.646 for postpaid, it is expected to decline with the life time incoming spread..

Further, the 14.6 m wireless subs base with RIC would include RIM, FWP/T, PCO and VPT right?

[SexyGurl 0]

No, it's 14.6 m subscribers for mobile only.

Total subscribers including FWP etc. for Reliance at end of January:

16,593,389

(see url: http://www.auspi.in/search-subscriber.asp )

News says they added 1 million in February ... so total subscriber base is about 17.6 million

[theking 35]

But whats the net after churn?...i guess the churn's too high for reliance as tata has now started a bit of the reliance's market...

Edited March 6, 2006 by theking