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Updated facts and stats on Indian Telecom: Q1,2011

Posted in Industry updates by Manas Ganguly on June 25, 2011

1. Mobile subscribers in India increased to 861.48 Million at the end of April 2011 from 846.32 Million at the end of March 2011.There are signs of the subscriber growth numbers slowing down over the highs of 22 million in November/December 2010.

2. Overall Tele-density in India reaches to 72.08% at the end of April,2011 from 70.43% of the previous month. The 70% tele-density point should now see a de-celeration of growth and the big numbers now would come for a higher CAPEX in establishing Distribution and Reach. The overall wireless Tele-density in India has reached 69.19%.

3. The overall Urban teledensity has increased from 157.32% to 159.63% and Rural teledensity increased from 33.79% to 34.47%.

4. Of the 15 Telcos operating in India, top 3 account for 50% of the market. Thus the viability of the later entrtants: S-Tel, Videocon, Uninor,Etisalat are questionable. Having invested a combined Rs.13000 crore, the ARPUs being generated by these networks are in the order of:
Uninor: Rs.39
Etisalat: Rs.26.75
S-tel: Rs.25.99
Videocon: Rs.8.5.
Such low ARPUs does not even cover the cost of acquiring a customer, which is Rs 300-400. These numbers foretell unviable operations and it will be very difficult for Telcos to recover their costs.
Ref:New telecom firms’ revenue streams turn into trickle

5. With Teledensity at 70% and Urban teledensity at 150% and 1 paise-per-sec call rates, it is increasingly clear that operators will have to leverage data services and VAS as revenue streams in the future over Voice.

6. More importantly it is the overall quality of service and VAS, content, eco-system partnerships that are going to be the ace for greater profit realization.

7. Costs are going to be chief concern in trying to access the rural 66% teledensity. There is a scope of innovation here in terms of distribution and services. Cracking the rural hinterland is hot going to happen by the same strokes that have been used so far most successfully to get to the 70% teledensity.

8. The Urban wireless teledensity has increased from 150.06 to 152.41 and Rural teledensity increased from 32.75 to 33.44.

8. Less than 5 million subscribers (1% subscribers) have opted for MNP in 6 months. What is evident is like elsewhere, GSM is the more preferred over CDMA as an option for Cellular subscribers.

10. Active wireless subscribers in VLR in April- 2011 is 583.22 million.30% of the subscribers in India are “ghosts” and that raises concern on the issue of 30% dead numbers.

11. Broadband subscription reaches to 12.01 Million in April-2011 from 11.87 Million in March-2011. Broadband refers to 256KBPS + speeds which by itself is a very low benchmark for data access as compared to other regions globally.41% of Internet connectivity in India is Broadband.

12. Average Revenue Per User (ARPU) for GSM service declined by 4.38%, from `110 in QE Sep-10 to `105 in QE Dec-10, with Y-O-Y decrease of 27%. MOU per subscriber for GSM service declined by 2.29%, from 368 in
QE Sep-10 to 360 in QE Dec-10. The Outgoing MOUs (174) declined by 1.61% and Incoming MOUs (186) by 2.92%.

13. ARPU for CDMA – full mobility service declined by 6.38%, from `73 in QE Sep-10 to `68 in QE Dec-10. ARPU for CDMA has declined by 17% on Y-O-Y basis. MOU per subscriber for CDMA-full mobility service declined by 4.73% from 283 in QE Sep-10 to 270 in QE Dec-10. The Outgoing MOUs (137) declined by 0.92% while Incoming MOUs (133) declined by 8.34%

14. The Vista of falling ARPUs and MOUs doesnot bode well for the Indian Telecom industry and places an onus on Telcos to integrate a larger basket of Telecom services to entice the customer to spend more.

Updated facts and stats on Indian Telecom

Posted in Industry updates by Manas Ganguly on April 12, 2011

Data as per TRAI February 2011 report

As of Month end February 2011, Teledensity in India is 66.36% with total Wireless and wireline subscriptions totalling 826.25 million. Broadband reach is measured at 11.47 million. The number of active connections (making or receiving 1 call on the network per month) is 562.98 million.While the numbers show a saturation in urban teledensity numbers and a limited potential to add new urban subscriber connections, the potential in rural areas is obvious at 31% teledensity. However, margin challenges for operators will increase as teledensity will increase. Also, as the number of subscriptions from rural India is increasing, the minutes of usage per subscriber and the ARPU are falling on a Y-O-Y basis.

The inexorable rise of subscriber figures has powered the fast and furious growth of Indian Telecom sector past the 80 crore mark. In Contrast to high growth in subscribers (CAGR 0f 47% from March 2008 to December 2010), the growth in revenue has been at a CAGR of 17%in the same period.

Data as per TRAI and COAI reports

A total of 15 operators has made the markets hyper-competitive and it is expected that with 3G roll outs and hyper price war scenario, there ought to be a shake out and consolidation.

Data as per TRAI February 2011 report

While data on handset sales is not available it is believed that approximately 190 million handsets sold in 2010 with replacement sales contributing to 118mn units or 62.8% of the total units sold. Replacement sales for handsets is to clock a 32% growth rate over next 4 years to register 359 million unit sales/year. This would contribute to 89.30% of the 402 million unit handsets sales by 2014. Translated in terms of ASPs, medium ASP devices i.e devices between Rs.2000-5000 will benefit from replacement sales and is expected to register a CAGR of 26.07% over 2008 onto 2014, when the total sales of handsets between Rs.2000-5000 would be around 240 million units/ year. This is great news for the tier B Indian OEMs who have been more successful than the Tier 1 brands to garner the replacement sales.

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