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The fixed phone market recorded a decline in market size from Rs 400 crore in FY 2007-08 to Rs 360 crore in FY 2008-09. In value terms, the market size was close to 6 mn units, which included the grey market.

Bharti Teletech and National Panasonic continued to dominate the market. Bharti Teletech had around 50% market share and National Panasonic commanded 20% market share, while the rest of the market was dominated by smaller players like Orpat.

In the present scenario, the Indian fixed phone market is primarily driven by Caller Line Identification (CLI) and cordless phone segments. As expected, this market has witnessed a downturn in the last financial year. The market for fixed line phones in India is stagnant. The CLI and cordless segments are showing marginal growth, and are set to spearhead the growth in the fixed line phone market.

Today, fixed line phones are coming with innovative features like backlit display, battery backup, and polyphonic ringtones. Also, FM radio is becoming increasingly popular as customers are looking for additional features on their fixed line phones. On the other hand, in the cordless phone segment, the thrust is on sleek and slim models with features like phone book, 3-way conference calls and 2.4 Ghz digital technology.

In the CLI segment, Beetel introduced two key models-DB6900 a two-line phone and the DB7401 with temperature record and display facility. In the cordless segment, India's slimmest cordless phone CB67000 was launched, along with CB69000, a cordless phone with an answering machine. The other cordless phone that was introduced was the CB99000, the first bedroom series phone.

The company received two major orders: an order from BSNL for 11 lakh units of CLI phones, and an export order of CB67000 model for Telefonica Peru worth Rs 10.6 crore.

There are many concern areas for companies operating in this arena. With the strengthening of the US dollar, pricing and profitability pressures have definitely gone up. The global economic scenario along with weak domestic demand and the slowdown in growth rate to about 6.5% to 7% are posing a challenge to the profitability and pricing. Apart from that, the main concerns are stagnant fixed line market, slow adoption/penetration of cordless phones, need for new relevant features and a weak global economic scenario.

The players believe that this sector will grow at a fast pace somewhere around the year 2011. Till that time we will witness a good annual growth but not at the same level as that of mobile telephone. It is only post 2011, that we are expecting an exponential growth in the fixed wireless phone sector.

Apart from that, affordable tariff in the country and pan-India presence of most of the operators is likely to fuel the market.

The main concern of the players is that of low margin of profit and a high cost of maintenance because of the remotely installed fixed wireless phone. Also, large pools of spare stock need to be maintained in order to cover the transportation delay from remote ends.

Fixed Wireless Phone
The market size came down from Rs 800 crore in FY 2007-08 to around Rs 400 crore in FY 2008-09, showing a negative growth of 50%. LG and ITI remained prominent players in the market, followed by Axesstel and ZTE. Huawei which was at #4 position in 2007-08 is no longer present in fixed wireless phone segment.

LG was dominating the fixed wireless phones (FWP) category in FY 2007-08 with around 25% market share, and in 2008-09 its share remained the same, though the market pie itself came down.

Till a few years back, all the mobile GSM operators were largely promoting the mobile terminals/handsets. However, on the other hand, CDMA operators like BSNL, Tata Teleservices and Reliance Communications were also operating in the fixed wireless phone sector in addition to the mobile segment. Among the CDMA operators, it was BSNL which was mainly providing the fixed wireless phones to all CDMA subscribers. In the last five years, BSNL has expanded its CDMA network to more than 5 mn subscribers and a large number of these subscribers are using the fixed wireless phones (FWP). However, since late 2007, most of the GSM operators have also entered the fixed wireless phone segment using GSM FWP.

Broadband services and introduction of WiMax for broadband might help in the revival of the fixed wireless market this year. Growth of fixed wireless is affected by the dramatic fall in tariffs for cellular phones and the shift of the subscribers to cellular phones.

Though the market size has come down, the industry players believe that this segment will grow at a fast pace somewhere around the year 2011.

It is expected that this segment will further expand in the coming years, as it meets many of the objectives of National Telecom policy of providing a phone to more than 6,25,000 villages in India.

Gagandeep Kaur
gagandeepk@cybermedia.co.in