The year was truly eventful for the Indian cellular industry. While the industry, in terms of regulatory issues, had to be content with a hide-and-seek of hope and despair, the subscribers had a field day, with tariffs dropping by about 30 percent or so, and more importantly the mobile-to-mobile STD rates getting really affordable. To sum up, it was a year of higher subscriber numbers, higher revenues, almost static billed ARPU, much lower net ARPU, and continued pressure on margins.

Subscriber Base
The total subscriber base as on 31 March 2003 stood at 12.69 million, almost doubling (97.3 percent growth) from a figure of 6.43 million on 31 March 2002. Significantly, the growth rate exceeded the previous year’s growth rate of 79.8 percent by almost 10 percentage points, though part of it could be attributed to the entry of BSNL and new operators.

With the entry of BSNL and other new players, circles grew by a whopping 113.5 percent while metros grew by an impressive 72.8 percent. Expectedly, the share of subscriber base in metros dropped from 40 percent in the previous year to about 34.9 percent as on 31 March 2003. Delhi continues to lead the cellular table with about 1.8 million subscribers, while Mumbai has 1.68 million subscribers. Together, these two metros accounted for almost one-fifth (19.5 percent to be precise) of the total mobile market. Among the states, Gujarat was the only state to breach the 1 million mark, with about 1.04 million subscribers as on 31 March 2003.

Bharti continued to be Operator No. 1, with 3.07 million subscribers, or about 24.2 percent of total subscribers. Its base grew about 127 percent, significantly higher than the industry average. However, BSNL, with 2.25 million additions, accounted for the lion’s share of the net additions—about 36 percent. The behemoth grew by 15,000 percent in terms of subscribers.

Top Companies - Revenue
Rank	Company	Revenue (Rs crore)	Market Share
1	Bharti Cellular Ltd	2,084.36
2	Hutchison Group	1,735.00
3	Idea Cellular	1,080.00
4	BPL Group	963
5	Spice Communications	550
6	BSNL	430
7	Reliance	367
8	Escotel	322
9	Aircel	230
10	RPG Cellular	166
	Others	376
V&D estimates CyberMedia Research

Revenues
The mobile services market in India was Rs 8,303 crore in FY 2002–03. That was 50.5 percent up over last year’s figure of Rs 5,515.9 crore. Though the growth rate seems more impressive than that of the last year despite falling prices, this has come largely because of new operators in general and BSNL in particular.

Bharti Cellular, with a sales turnover of Rs 2,084.36 crore, was the No. 1 mobile company in India, followed by Hutchison Group with revenues of Rs 1,735 crore. Idea was at the third place with revenues of Rs 1,080 crore. These three account for a staggering 59 percent of the industry’s total revenue.

The average revenue per user (ARPU) continued to fall with more subscribers being added at the low end. The ARPU for India was about Rs 597 per month, down from Rs 780 per month in 2001–02. This figure indicates the net ARPU. The billed ARPU was about Rs 764 per month, which is due to the comparatively higher usage of STD from mobile.

For the first year, SMS accounted for a significant percentage of mobile operators revenue at around 3.7 percent. This, incidentally, was higher in some of the class-B circles. The percentage contribution of SMS is both due to the growth in usage as well as due to the fact that SMS prices did not drop, whereas voice tariffs saw a major decline. Also, ringtone downloads and other content-based services contributed to higher per SMS revenues.

Interestingly, the falling ARPU does not tell the story of growth in usage. The usage grew considerably to reach on an average 290 minutes per month, compared to about 200 minutes per month last year.

Industry
The regulatory changes kept the industry busy. The fear of CDMA and Reliance brought the industry together to challenge the fixed service operators. However, the fear, as it turned out to be, was short lived, as Reliance failed to make a major dent in the cellcos’ subscriber base due to a faulty start. Starting with a different way, it could provide a major competition this year.

The industry also saw incoming calls becoming free. However, with calling-party-pays regime and higher IUC charges, the industry did find some solace.

The losses, however, are mounting and if data services and other value-added services do not take off, the industry may well head for more difficult times.

Shyamanuja Das