Radio Trunking: Against All Odds

Financial year 2005-06 witnessed a bullish Public Mobile Radio Trunking
Services (PMRTS) market. Despite the step-motherly treatment meted out by TRAI
and the DoT, VOICE&DATA estimates that the PMRTS market saw a growth of
around 15% in terms of subscribers. The total market was estimated to be at Rs
38 crore in FY 2005-06, a 27% rise over the previous year.

According to VOICE&DATA, the total number of PMRTS subscribers stood at
30,755 in FY 2005-06. Delhi, Mumbai, Bangalore and Chennai accounted for 71.9%
of the total subscriber share. There were 10,192 subscribers in NCR followed by
Bangalore with 5,300 subscribers and Mumbai and Chennai with a share of 4,450
and 3,150 respectively. In FY 2005-06, Procall maintained its leadership in the
PMRTS segment, with a subscriber base of 8,507 and revenue of Rs 9.2 crore,
followed by Arvind Mills whose subscriber base stood at 7,828.

Procall saw a growth of 4.8% in its subscriber base and held 27.7% of
subscriber share. Arvind Mills experienced the highest growth of 20.1% growth
and its share in the subscriber base is 25.5%. The fourth quarter of FY 2005-06
saw an astounding growth of 9.4% in the subscriber base.

Procall bagged a number of projects ranging from Australian High Commission
to Genpact. The biggest order came from BSES, who happens to be the largest
customers of the radio trunking services.

Agrani Wireless Services, an ASC Enterprise, acquired Quickcalls (QC),
Bhilwara Telenet Services (BTSL), Smartalk and Procall. QC, BTSL and Smartalk
operate under the brand name “SMARTMOBILE” and Procall operates under
“Procall” brand name.

Another company AryaOmnitalk Radio Trunking Services has applied to the DoT
for transfer of licences of seven companies viz Arvind Mills, Aryadoot,
Aryaoffshore, German Express, United Liner, Container Movement and Jet Aiu.

The impetus in the PMRTS segment can be attributed to the boom in the BPO
segment and the increased concern for the safety of call center employees. The
BPO segment is estimated to comprise of 50% of the PMRTS users.

Another area that boosted the PMRTS market is the large number of
infrastructure projects and security needs of large malls that have emerged in
cities. Other verticals, which are using these services, are hospitality,
courier services, healthcare, and disaster recovery, to name a few.

Roadblocks 2005-06

Despite the growth, the PMRTS industry remained shackled. It has already
suffered a setback, as PMRTS was introduced in the country after GSM and CDMA
services. This is a reverse trend, as compared to other countries.

Moreover, interconnectivity between the sites is not allowed and the market
forces are not allowed to work, as there are a number of restrictions. The
recent amendment by the DoT to remove restriction from the spectrum of 1 Mhz for
digital PMRTS is one such example. It has stated that frequency spectrum shall
be allotted depending upon the justified requirements and the availability of
the same. This is a major setback to an industry, which is planning to go
digital. Also, there is no appropriate numbering plan to keep track of
subscribers, which will grow exponentially once the services go digital.

A rigid licensing policy is an impediment for the growth of this segment.
World over the regulations for PMRTS are formulated in such a way that it
develops as a niche market. But in India no steps are being taken and the
situation is such that PMRTS subscribers are not even 0.03% of the total mobile
subscribers.

For the industry to flourish and mature further, the license regime needs to
be relaxed and TRAI's recommendations issued in 2003 should be implemented.
The point to be noted here is that these services do not pose
a threat to GSM, CDMA networks because its inherent attributes limit its
applicability.

Outlook

The future of PMRTS lies in migration to digital technology where the
handsets will be like any other mobile phone along with all the features such as
SMS, camera etc. Digital trunking has several advantages as it is more reliable,
flexible and has low noise.

Solutions such as panic button, messaging are coming up along with the
already ongoing vehicles' location systems, which is supported by the an
analog platform.

A rigid licensing policy is an impediment for the growth of this segment

India faces acute shortage of frequency spectrum. In this scenario, growth of
PMRTS should be encouraged, as it would enable us to optimally utilize the
spectral-efficiency advantage of this service especially for 'Closed User
Groups' on the move, which are large in number.

The present licence conditions are restrictive and do not help PMRTS
realize its full market potential. Steps taken earlier, such as enhancing
the FDI ceiling from 49% to 74% in PMRTS are welcome. Initiatives should be
taken for smooth transition from analog platform to digital technology. The
operators who are providing services on analog should be given sops to shift to
digital platforms.

Till now, PMRTS operators have failed to realise their full potential,
as the conditions are not appropriate to stimulate the desired growth of
these services. However, in future, these services are expected to gain traction
and a little push can result in an unprecedented growth in this sector. Against
all odds, the underdog has performed well in FY 2005-06 and is set to storm the
market.

Sonia Sharma

sonias@cybermedia.co.in