The month of October saw major announcements by two leading telecom operators that reflect why foreign investors are queuing in India with their investments, and non-telecom companies eyeing spectrum. Bharti Airtel achieved 50 mn subscribers while the user-base of Tata Teleservices, relatively a new entrant, touched 20 mn. Reaching this milestone had never been easy for the two operators, considering the outlook of the Indian cellular market three years ago and the regulatory environment.

Both the companies have also embarked upon expansion plans to achieve new milestones. The government's inaction in releasing additional spectrum in line with the expectation of operators may put a spanner on the growth of telecom players. The telecom minister has been dillydallying on the issue for some time, and the entire industry is up in arms. However, the 8-9% GDP growth may be a boon for telecom operators to show further growth in subscribers and increase ARPU from the present $8-9.

Bharti Airtel
Bharti Airtel, which entered into the league of the world's top five telecom companies, has become the fastest private telecom operator in the world to achieve this milestone. In the initial period of telecom business, operators did not even expect to achieve these goals because of high handset costs and unaffordable tariffs. Bharti Airtel has achieved this distinction within twelve years of the start of operations.

Manoj Kohli, president & CEO, Bharti Airtel, says, "We believe this growth momentum will remain intact, and we are gearing towards the 100 mn customers mark."

It crossed the 10 mn-customer mark in November 2004. In July 2006, its customer-base touched 25 mn. The company added the next 25 mn customers in fourteen months. Adding 25 mn in fourteen months cannot be considered a major achievement, as India has started adding 6-7 mn subscribers per month, surpassing the growth of China which adds 5-6 mn a month.

According to Kohli, spectrum is a major concern that the government should address urgently. However, he declined to comment whether a delay in the release of additional spectrum would affect the performance of telecom players.

It plans to chip in funds for network expansion to establish a presence in all census towns and over 500,000 villages across the country by 2010. Its plan to cover 95% of the country's total population will be a major boost to India's rural and semi-urban population through its match-box stratgy

The company's strategic focus will be on strengthening the Airtel brand through better customer service, backed by a nationwide distribution. This is a significant step in the right direction in the wake of Vodafone spreading its wings in India.

Bharti Airtel will also invest substantially in the long distance business in the next 2-3 years. The company is also planning to strengthen its corporate business.

Tata Teleservices
The 20 mn subscriber mark was achieved in four years, making Tata Teleservices, which continues to register the highest compounded annual growth rate (CAGR), the only service provider to achieve this record in the shortest period of time.

Ashok Sud, president, Corporate Affairs, Tata Teleservices, says despite many initial constraints, Tata Indicom continues to surpass the industry growth rates, and has consistently introduced path-breaking offerings to its customers.

One of the many unique initiatives taken by Tata Teleservices was to redefine the prepaid mobile market in India with the 'Non-Stop Mobile' and 'Don't Stop' mobile schemes. The company was the first to introduce its own range of branded handsets, and today, offers the widest range of high-end and full-value handsets in the country.

The company, which has increased its market share to 9.7% in March 2007 from 3.5% in March 2004, also has to its credit the introduction of several attractive bundled offers and innovative tariff plans.

Tata Teleservices operates in 4,300 towns across twenty circles and the expansion drive is on. The company's new initiatives have paid off well, but considering the current market scenario, where rival operators are investing heavily in rural and semi-urban areas for network expansion, the future increase in subscriber-base will depend on the company's financial muscle and customer focus.

Baburajan K
baburajank@cybermedia.co.in

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