TRAI’s report dated 20th February 2009 has the following updates on the Indian Telecom market.
- Subscribers base crosses 400 million
- 15.41 million wireless subscribers added in January 2009
- 5.65 million subscribers in Broadband segment
- Teledensity reaches 34.50% mark!
Interestingly, 15.41 million new mobile subscribers takes the mobile connectivity number to 362.30 million. Comin on the back of a downturn and economic meltdown, the subscriber additions dont show any slow down as they beat the sub-adds in December 2008 (10.81 Million) by almost 50%. While the stock indices over the world are flatering, here is one index that is still going and growing strong. Broadband penetration statistics pale in comparison as it registered an increase of .2 million over a December base of 5.45 million in January (3.6% growth).
The other significant bit in here is the launch of Reliance GSM services. http://technologyandtelecom.blogspot.com/2009/02/ada-reliance-telecom-exercising-muscle.html.
The link in here is an earlier post on how the competitive scene was heating up between Reliance and Bharti with the launch of Reliance GSM services in the country. Reliance muscled its way in January 2009 adding 4.95 million subscribers compared to Bharti Airtel’s 2.73 million subscriber additions and Vodafone’s 2.4 million subscriber additions. Certainly Reliance got a super start and has got it 4.95 million subscribers into its network in the first month of operation. At this rate, Reliance will beat Vodafone’s no 2 market share position by March 2009. There is no surprise that Airtel feels threatened!
Already there is a renewed push to register more and more users into the Post paid services. (By Vodafone). The idea here is by reducing call, SMS, data browsing, VAS and STD charges on Post Paid, customers are lured to Post paid connections which is supposed more sticky and loyal than the Pre Paid option.
It is going to be an interesting battle for the top honours in Indian Telecom market. Watch this space.
Airtel execs and business managers are withering hard times and so will it be over the next 3 months. The 33% market share GSM Telco in India faces its touchest competition on the Indian turf till date: Reliance GSM national roll out. Interestingly in East India, where both these service providers compete in the GSM space, Airtel trounces Reliance by a factor 2x – 3x! This could however be explained by lack of emphasis on GSM by Reliance and a hindrance in terms of pan India absence. (Airtel has been blaring its pan India presence in Ads)
After its launch on December 28, 2008, Reliance has taken the battle to the Airtel camp. So long a majority player in the CDMA space, Reliance is using its CDMA business infrastructure, retail outlets and distributors and reach as a starting point. That effectively reduces the roll out cost and time most significantly. Reliance GSM coverage between launch and today has crossed 14,000 towns and the goal is to reach 24,000 towns and 600,000 villages across India linking the widest diversity of 1 bn people on the planet. this was the fastest network rollout in the world within a span of 11 months, 6 months ahead of its schedule. It took 15 years for other competitors to achieve the same coverage.
The opening gambit at Reliance is free talk time to users worth 450 minutes over a 90 day period (5 minutes per day). It could make a sweep at the lowere end of the customer pyramid and there are some serious numbers there. Reliance and Anil Ambani are hoping that after the honeymoon of 90 days, it would have a sizeable volume based on churn from other operators as well as new net adds.
So this would be battle toyal between two companies played on the low tarriff and subscriber addition turf. Reliance has made its opening move with a talk time discount. Very soon, this promises to be an all out tarriff war. Airtel would look to reduce the churn and Reliance would be exteremely aggressive on customer acquisitions. Going back to my blog on Customer loyalties, with very little separating and differentiating Airtel from the challenger, Reliance in terms of service, network and consumer loyalties, Airtel could bleed. Reliance will try to limit its cost of acquisition.
However, the question remains, HAD AIRTEL DONE BETTER ON CREATING LOYALTIES IN CONSUMERS by building its loyalty and service credibility, it would probably have been lesser worried about the churn it would be facing in near time future.