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India's NLD market has grown by 13.6% in FY 2009-10

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Voice&Data Bureau
New Update

This year, India's
NLD market has grown by 13.6%, with a total revenue of Rs
16,400 crore, up from Rs 14,432 crore in the last fiscal. However, last year's
growth rates of almost 50% have not been duplicated this year, mainly due to the
major fall in tariffs of all operators in turn leading to a massive price war
and falling
ARPU. However, with a possible strong economy growth, the growth in
rural telephony and MNP round the corner, operators are looking forward to a
lucrative year ahead.

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Trai vs Operators

TRAIhas continued with its policing of operator's revenues, with Vodafone
currently under fire for its failure to pay taxes for start-up operations of
Vodafone Essar. Tata Communications and
Bharti Airtel were also under scrutiny
for quite some time, but were later cleared. With further investments in the USO
Fund, and unique calling packs by several operators, rural telephony has been
given a big boost, with rural subscriber numbers standing at almost 40% of the
total Indian subscriber market. MNP, which has been a highly debated topic, will
hopefully be in operation by the year end, and most operators are looking
forward to this, upgrading their networks in preparation for the churn.

Players' Contributions

Bharti Airtel is once again leading in this segment with a 29.3% market share,
despite revenue declining by 2.1% from Rs 4,905 crore in FY 2008-09 to Rs 4,800
crore in FY 2009-10. This year, its total NLD minutes carried were 15.9 bn, up
from 11.6 bn in the previous fiscal. Some of its key performance indicators were
fiber commissioned for over 126,357 km, tier-1 MPLS network (across 120 cities),
Internet backbone capacity of 60 Gbps.

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Next in the line is BSNL-which has seen a modest growth of 14% this year-with
a revenue for FY 2009-10 estimated at Rs 3,600 crore, up from Rs 3,159 crore in
the previous fiscal. Reliance Communications saw a 23% drop in growth in the NLD
segment from Rs 2,729 crore in FY 2008-09 to Rs 2,100 crore. However, it
continued to retain its #3 position with a market share of 12.8%. Reliance
Global Call business revenue has increased 23% y-o-y, and the NLD traffic has
grown by 59% y-o-y, led by the growth in GSM business.

Vodafone has also done surprisingly well this year, clocking a growth of 43%,
with revenues touching Rs 1,900 crore up from Rs 1,328 crore in the previous
fiscal. It has maintained a 11.6% market share. Tata Communications is again in
the fifth position, with its revenue dropping to Rs 1,045 crore from Rs 1050
crore last year, occupying a 6.4% market share. With 10 bn minutes of India NLD
voice, this fiscal Tata Communications signed a co-build agreement with MTN for
a 5,000 km NLD network.

Idea Cellular has grown by 40.3% this year, with a 6.1% market share and
revenue up to Rs 1,000 crore, from Rs 713 crore in FY 2008-09. TTSL this year
clocked a revenue of Rs 684 crore in this segment, occupying a 4.2% market
share.

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New Players, New Promises

Pacnet-through its joint venture, Pacific Internet India (Pacnet India)-obtained
NLD and ILD licenses from the DoT this year, and aims to expand its solutions to
include international private line (IPL) and Ethernet international private line
(EIPL) services as well as domestic and international IP VPN services, to meet
the growing demand for strong, high bandwidth connectivity solutions across the
country. The company is also exploring the idea of adding more PoPs across the
country in the coming months, and upgrading the existing ones.

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RailTel, this year rolled out its state-of-the-art NGN switching network,
supporting carriage of NLD/ILD voice minutes, and converging the traditional
voice, data and video on to a single IP infrastructure, as well as enabling
triple play services on the same network to the customer. RailTel has also
established a point of interconnect (PoI) using media gateways with a majority
of operators.

After Tata DOCOMO launched its per second billing across the Simply Reliance,
a monthly fixed price plans for RCom's CDMA customers, offers unlimited calls to
any Reliance phone in India. The plan is developed in a bid to do away with
Trai's metering rules.

Outlook

With a steady growth of subscribers, which will only increase post the
recent 3G and BWA auctions, the Indian NLD market is set to see a promising year
ahead, with better pricing and more choice. Voice will get a boost with
3G
and
2.5G and Edge, which will hopefully be the end of call drops and network
inconsistencies. In addition, video calling and other novel technologies
deployed abroad will soon make their mark on the Indian NLD scene. With
liberalization of policies by Trai and DoT, operators are hopeful of doing much
better, increasing efficiency and providing greater connectivity, with passive
and active sharing to witness a boost; and thereby many more rural subscribers
in far-flung villages will benefit from the new era of telecom in India.

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Beryl M

berylm@cybermedia.co.in

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