Key data:

• Mobile subscribers: 391.76million
• Landline subscribers: 40million
• % Growth during quarter ended on Mar’09: 12.93%
• Annual net adds (mobile): 113.26mn
• Monthly avg. Mobile subscribers: 15.41mn
• GSM Subscribers: 297.26mn (75.88%)
• CDMA Subscribers: 94.50mn (24.12%)
• Penetration: 37%
• Projected cellular penetration: 500mn by 2010 (40%)
• Broadband connection: 6.22mn
• Total Internet Subscribers: 13.54mn

The telecom market in India is divided into 22 service areas known as “circles”. The circles roughly divided in line with the country’s states and divided into four categories – Metro, A, B , C and D. And service provider needs a separate license for each circle.

Current wireless operators and categories:

1. State-owned operators: BSNL, which covers all India except Mumbai and New Delhi, MTNL offers mobile services in Mumbai and New Delhi.
2. Original service providers with national presence are Bharti Airtel and Vodafone Essar.
3. Operators who took fourth-round liceses to create a national presence are: Reliance Communications, Tata Teleservices, IDEA Cellular, Shyam Telelink Ltd and Aircel Ltd.
4. Greefield operators issues new licenses in Jan 2008: Datacom Solutions, Loop telecom, S Tel, Swan Telecom and Unitech.

The GSM subscriber base has reached 297.26 million in the quarter ending March 31, 2009 as against 258.23 million at the end of the previous quarter. The growth rate for this quarter is 15.11%. Bharti Airtel is by far the biggest mobile operator in India, with more than 93million subscribers. Followed by Vodafone, BSNL, Idea Cellular, Reliance Communications and others.

The Wireless Operators on the basis of Market Share (as on March’09)

The big issue before the telecom operators is how to build significant subscriber bases in order to generate meaningful revenues and enjoy economies of scale.

One way is through consolidation: For instance, in 2008 Spice Telecom merged with IDEA Cellular, another way is to secure the experience and financial support of an overseas investor.

3G market

The Indian mobile market has recorded impressive growth over the last few years on the back of easy availability of low cost devices, better network coverage and affordable services. The uptrend in growth is expected to continue in near future owing to the lower teledensity, which currently hovers at around 30-35% according to analysts. Moreover, there is a wide gap between urban and rural mobile penetration. The mobile penetration in the urban area stood at around 72% with subscriber base of 282mn, while, in rural areas, it was pegged at 28% with subscriber base of 109mn. Subscriber base includes both GSM and CDMA users. This wide gap indicates immense scope of future growth in mobile segment.

Nation-wide deployment of 3G services are expected to bridge the gap between rural and urban mobile penetration. The target is highly depends upon the government’s policy on 3G frequencies auction. At present, State-owned BSNL and MTNL have been allowed to rollout 3G services, while rest of the operators will be issued 3G spectrum via auction.

Indian 3G subscriber base is forecasted to reach over 50mn by 2012. The total number of mobile subscribers crossed the 340mn mark in 2008 and is projected to grow at a CAGR of over 14% till 2012 to reach 650-660mn subscribers. 3G will account for around 7-10% of the total mobile subscriber base.

Profile of market players

Operator	Ownership	Technology	Subscribers (in million)	License
Reliance Communications	66.67% of the company owned by Anil Ambani	GSM, CDMA-1	74	In all circles
Vodafone – Essar	Vodafone 52%, Essar group 33%, Indian nationals 15%	GSM, Edge	69	In all circles
Idea-Cellular	Birla group holds 49.1%	GSM, GPRS, Edge	44	19 circles
Loop Mobile (formerly BPL)	--	GSM, GPRS	2	In all circles
Tata-Teleservices	Tata group own 80%, C. Shivsankaran holds 8%	GSM, CDMA-1	37	In all circles
Bharti Airtel	Fully owned by Bharti group	GSM, Edge	97	In all circles
BSNL	GOI	GSM, GPRS, Edge, HSDPA	47	All circles except Mumbai and New Delhi

Indiabiznews, July 29, 2009