Landlines making a comeback
Siddharth Tak/Zee Research Group
Is the landline telephone now history in India? Right? Wrong? Private operators are actually registering a healthy growth fueling the return of the landline in urban India, with Bharti Airtel alone gaining about 2,80,301 subscribers - almost a double digit growth - during the last 15 months (January 31, 2010 to March 31, 2011). This has happened even as the overall landline subscriber base during this period declined by about 5.52 per cent with the fall being the steepest in rural India.
A study of the Telecom Regulatory Authority of India (TRAI) revealed that the total number of landline subscribers in the country fell to 34.73 million in March 2011 as compared to 36.76 million subscribers in January 2010. Overall the landline tele-density stood at 3.13 in January 2010 as against 2.91 March 2011.
The negative growth in the overall landline segment, not long ago hailed as the lifeline of India, has resulted in BSNL being the biggest loser. The state owned telecom operator lost 27,53,451 subscribers, almost a ten per cent fall. BSNL though still holds 72.63 per cent of the landline market share as of March 2011 compared to 76.12 per cent January 2010.
The urban landline growth story observed over the last 15 months shows handsome gains not only for the top private telecom operators like Bharti but also state owned MTNL. It gained 2,12,033 new landline subscribers during January 2010 until March this year in Delhi and Mumbai where it operates.
Tata Teleservices too gained handsomely during the 15 months recording 1,61,739 new subscribers during (January 31, 2010 to March 31, 2011). Reliance Communications gained 65, 320 new landline subscribers from January 2010 to March 2011. Bharti, which gained the most in last 15 months, refused to comment on the development as an e-mail sent to the company remained unanswered.
Outlining the landline market future, Shobhit Agarwal, managing director at Protiviti Consulting, a global consulting firm, said, “Further growth in landline can be possible. Operators have to couple it with other incentives schemes and this would restart aggressive expansion of landline. Bundled product (triple play) with entry pricing will help expand internet subscriber base.”
Considered on a month on month basis, the overall landline density in India declined March this year to 2.91 from 2.92 February 2011. But here also the urban landline growth story continued unabated. The share of urban landline subscriber base marginally increased from 74.87 per cent in February to 74.97 per cent in March 2011. As against this the share of rural landline subscribers declined to 25.03 per cent in March from 25.13 per cent in February 2011.
The decline, however, was not hard to explain. Mahesh Uppal, promoter and director at Com First (India) said, “Landline costs much more than mobile and it would be pursued only if it fits with the larger broadband strategy which is yet not clearly stated.” This reinforces the point made earlier by Agarwal of Protiviti, who further identified lack of civil infrastructure as a big bottleneck to landline growth.
He argued, “One of the significant issues faced by operators trying to expand landline network has been the time and cost of getting approvals for right of way (ROW) by local/municipal corporations.” Uppal, however, was not too optimistic about any big jump in landline subscribers arguing that the market leader BSNL continued to lose customers on a regular basis.
BSNL subscription base heavily declined in state of Bihar, Rajasthan, Madhya Pradesh, Haryana, Maharashtra and Gujarat, with highest being reported in Bihar, with 25,944 landline connections surrendered in the month of March 2011.
MTNL, however, has shown slight increases in landline subscription in Delhi and Mumbai, with highest growth being reported in Mumbai, which added 3669 new landline subscribers whereas Delhi added 1901 subscribers till March 2011.
However, private telecom operators providing landline services like Bharti Airtel and Reliance Communication continued to do well across urban India in March, with the exception of Tata Teleservices which recorded a fall of about 6742 landline customers in March 2011.
Bharti Airtel, the third largest wire line operator, showed growth across all circles with the highest growth being reported in Delhi, where it added 9204 new landline subscribers in the month of March 2011.
At the end of the financial year, despite the huge fall BSNL remained the market leader with a market share of 72.63 per cent, followed by MTNL with 9.97 per cent, Bharti Airtel with 9.49 per cent, Tata with 3.69 per cent and Reliance with 3.55 per cent.