Print this article

Comment This

Email this article

Despite a superb growth in the Indian economy, the growth of wireline services has plummeted during the last fiscal. This of course is because of the availability of alternatives like cellular services.

The wireline revenue growth has stagnated for the last two financial years. During FY 2007-08, it fell 11.6% to touch Rs 26,692 crore from Rs 30,190 crore in the previous fiscal.

Another fact is that none of the operators have improved their revenues. BSNL garnered Rs 21,020 crore in FY 2006-07, which declined to Rs 20,500 crore during the last fiscal. However, BSNL is the market leader in the sector, while MTNL is in the second position with revenue of Rs 3,555 crore.

There are several reasons that can be attributed to the negative growth. Private operators continue to focus on their wireless business as customers in India have shifted their focus to fancy cellular handsets and services. Ease of use, mobility features, value-added services, and removal of entry barriers that come with cellular handsets and services have put a spanner in the growth of the wireline segment.

In the wireline segment, the subscriber base has fallen to 39.41 mn in FY 2007-08 compared to 48.91 mn in the previous fiscal, decreasing 19.4%. Based on the subscriber-base too, BSNL stands at the top, despite a 14% slump.

Bharti Airtel is the only operator that grew in this segment on the basis of subscribers. Bharti's wireline subscriber base grew from 1.27 mn to 2.28 mn during the period. BSNL's subscriber base nosedived to 31.55 mn from 36.70 mn, while MTNL's user-base stood at 3.68 mn, registering a 3.2% decline.

Tariff Failure
There was a drastic fall in wireline tariff during the last fiscal, while operators have opted to run several schemes.

Reliance Communications has made local calls rural-friendly at 80 paise/3 minutes for fixedline, WLL, and Reliance phones. Intra-circle calls attracted 80 paise/minute on wireline, WLL, and mobile phones, while they were charged at 80 paise/3 minutes on Reliance phones. However, inter-circle calls had a flat rate of 80 paise/30 seconds for all categories, such as fixedline, WLL, mobile phones, and Reliance phones.

BSNL has extended its 'One India' tariff plan for all basic telephone connections in urban areas with an exchange system capacity of 30,000 lines and above. Under this plan, fixed monthly charges were reduced to Rs 180 from Rs 250. 50 free calls were also allowed. Further, call charges were drastically reduced. With a view to offer value addition to its customers, BSNL has brought out a lot of innovations in its schemes.

BSNL has also extended its STD facility to all its 'One India' tariff customers without any additional security deposit required. This facility was automatically extended to its customers' telephone.

The company has decided to offer 25% discount on fixed monthly charges for a period of one year from the date of providing connection for any new fixed or WLL connection booked in the name of a woman. This scheme was launched as a mark of BSNL's commitment to society and especially to women on the occasion of woman's day.

Winning Strategies
Last fiscal saw Bharti Airtel changing its strategic focus to converged media solutions and the renaming of Airtel Broadband & Telephone Services to Airtel Telemedia Services. The strategic name change was in line with Bharti Airtel's growing focus on new media solutions and its foray into IPTV and DTH businesses.

In the last few years, Bharti Airtel has expanded its broadband and telephone network to cover 94 cities across India.

Bharti Airtel also allowed its customers to 'do more' with the same telephone connection. With the availability of a large number of services online and the ability to download content like music and movies, there has been an increase in demand for bandwidth so that customers are now able to avail these services better and faster.

The company is looking to get more out of fixed line investments and seeking to do this by increasing the penetration and growth of broadband, riding on fixed lines. Also, their IPTV service, which has been undergoing trials, will soon be launched before the end of this fiscal.

MTNL and BSNL
MTNL has introduced a new m-commerce service for its landline subscribers under which users would be able to pay their bills through SMS. This is considered as the right step forward in ensuring the fastest, most convenient, and hassle-free way to make bill payments for all its customers. For this purpose, MTNL has tied up with mobile transactions company, Suvidha to enable its m-commerce service.

BSNL has offered a free trial of 15 days for new broadband customers registering their demand for broadband under any plan up to March 31, 2008. BSNL has also revised the security deposit for new telephone connections with effect from May 2007.

Tata Teleservices Maharashtra (TTM) has strengthened its focus on wireline business in Mumbai and Mahrashtra. The company's key priority will be to upgrade its fiber network in Mumbai, which currently supports some 2.5 lakh large corporates and SMEs. It is also looking at expanding fiber networks in major parts of Maharashtra.

Bharti Airtel has continued its focus in states such as Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu(included Chennai circle), UP-east, UP-west (including Uttaranchal), and West Bengal.

Tata Teleservices' operations continued in states like Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Kolkata, Madhya Pradesh, Orissa, Punjab, Rajasthan, Tamil Nadu, UP-east, UP-west (including Uttaranchal), and West Bengal.

Reliance Communications focused on Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Kolkata Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamil Nadu, UP-east, UP-west, and West Bengal.

For meeting USO Fund obligations, many operators tried out fixed wireless phones. For instance, Reliance Communications had rolled out its rural direct exchange lines (RDEL) project, offering telephone (FWP) connections over 7.37 lakh new subscribers 203 SDCAs covering over 40,000 villages till March, 2007 under the Universal Service Obligation Fund.

This kind of initiative may reduce the rural-urban divide as people in over 40,000 villages in India could communicate seamlessly with the rest of the world at a highly economical rate at par with their urban counterparts. However, the wireline segment may continue with its dwindling revenues for some more time. The only silver lining is the spread of broadband and IPTV services using wireline connections.

Considering the fall in the number of subscribers and focus areas of private operators during the last fiscal, both the number of subscribers and revenue may fall substantially during the current fiscal.

Baburajan K
baburajank@cybermedia.co.in