An analysis of Indian telecom operators’ financial performance

India added 15.34 million subscribers in April 2011, taking the total mobile subscriber base in the country to 826.93 million at the end of April, from 811.59 million in March, with a growth of 1.89 percent, and an overall teledensity of 72.08 percent.

 

Bharti Airtel has retained its position as the top cellular operator in the country with revenues at Rs 125120.80 million for the quarter ending March 2011, according to TRAI.

 

 

 

However, the operator saw a 32.6 percent decrease in its net profits in fiscal 2010-11. The operator added 2.41 million subscribers at the end of April 2011, taking its total subscriber base in the country to 164.61 million.

 

 

 

Bharti’s broadband gross revenue figures for the March quarter stood at Rs 10.03 million, including ISP and V-SAT. Some significant achievements for Bharti Airtel India in the last fiscal were tying up with Apple to bring the iPhone 4 to India, launching Airtel Broadband TV, being the first operator to start m-wallet services in India, launching India’s first mobile app store, and of course the launch of its Africa operations, buying out telecom major, Zain.

 

 

 

Vodafone Essar overtook BSNL to gain number two position this year, clocking revenues of Rs 79997.10 million for the quarter ending March 2011.

 

 

 

Vodafone reported a 20 percent increase in APAC revenues, lead strongly by India, Africa and Middle East revenues. Vodafone added 2.40 million users at the end of April 2011, taking its total subscriber base in India to 136.97 million.

 

 

 

According to a statement by Vittorio Colao, CEO, Vodafone Group, “Our performance in India has been driven by increasing voice penetration and a more stable pricing environment.” Vodafone is also considering starting an IPO in India next year for Vodafone Essar, similar to its South African unit, Vodacom, after it settles its outstanding legal issues in the country.

 

 

BSNL dropped to third place this year, with gross revenues of Rs 72078.10 million for the quarter ending March 2011, showing further losses to the state-run telecom operator.

 

 

 

Last year, BSNL had gross revenues of Rs 300,240 million, while this year that figure has fallen further to Rs 290,013 million. BSNL added 0.17 million customers at the end of April taking its overall subscriber numbers to 87.147 million, and  providing it with a 11.13 percent share of the Indian wireless service provider market.

 

 

 

While BSNL continues to lead in the broadband segment in India with its ISP and V-SAT gross revenues adding up to Rs 6530.22 million, its all-India NLD gross revenues stood at Rs 17170.70 million, ILD revenues stood at Rs 5290.43 million.

 

 

 

Despite being the first operator in the country to offer 3G services, BSNL had failed to garner much enthusiasm for its 3G services, even before private operators won 3G, and now it is simply unable to compete in a market where private players are given preference.

 

 

 

Falling ARPUs, the failure of the MTNL-BSNL mergers, and recently a breach of the interconnect or roaming agreements with Reliance Communications, as well as its its continued losses due to MNP, where together with fellow PSU, MTNL it has lost the maximum number of subscribers, did not bode well for the operator last fiscal.

 

 

 

Idea Cellular, which has been doing very well, adding 100,000 3G users within a month of its launch, and gaining the maximum number of customers through MNP, beating close rival Vodafone to add 2.45 million new users by the end of April, taking its mobile subscriber base to 91.95 million, has overtaken Reliance Communications to stand at fourth place, among the top service providers in the country this year.

 

 

 

Idea Cellular clocked revenues of Rs 48989.40 million for the March 2011 quarter, and a 7 percent growth in revenues from the last fiscal. The operator’s gross revenues for NLD stood at Rs 10.48 million, while its ILD revenues reached Rs 470.80 million.

 

 

 

Idea has come up with multiple unique initiatives in the last fiscal be it m-banking with Axis bank, ‘My Card’ Voice and VAS vouchers, international roaming offers, as well as many other schemes for its customers from urban and rural areas. It also led in the number of VLR customers at 93.07 percent.

 

 

 

In fifth place is Reliance Communications with gross revenues for the March quarter amounting to Rs 43507.10 million, and an 86 percent overall fall in net profits compared to the last fiscal. The fall in profits is attributed to declining ARPUs, as well as 3G payments and fluctuating market cues.

 

 

 

Besides, RCOM has fared the worst among the private operators in MNP, losing over 350,000 subscribers. Its inability to garner an investor for its tower assets, is also adding to its debt burden.

 

 

The operator’s ARPUs have fallen steadily year-over-year from 340 in 2008 to 116 in 2011. Reliance Communications has a 16.8 percent share in the Indian wireless market. RCOM’s broadband revenues saw a q-o-q net increase of 12.8 percent.

 

 

 

However, broadband contribution to the company’s overall revenues witnessed a decline of 7 percent, as compared to 9 percent last fiscal. RCom’s total NLD minutes for the quarter ended March 2011 saw a marginal increase to 16,578 from 16,569 last fiscal, while its total ILD minutes saw a marginal increase to 4,538 from 4,084 last year.

 

 

 

Some of the significant achievements of RCOM include being the first private operator to pay 3G spectrum fees, and the first to roll out 3G services in four cities simultaneously.

 

 

 

RCOM also partnered with SBI for m-banking services, and most recently launched an undersea cable called HAWK, through its global arm – Reliance Globalcom, connecting the Mediterranean region to the rest of the world, via Europe and Asia. The operator plans to concentrate more on VAS and data services, in a bid to combat escalating losses.

 

 

 

 

 

In sixth place this year is the Tata Group, including TTSL, TTML and Tata Communications, which together posted gross revenues of Rs 39220.30 million in the March 2011 quarter. While Tata Communications net profits fell by 66.85 percent, TTSL and TTML both posted a profit of Rs 800 million.

 

 

 

TTSL added 1.24 million subscribers in April 2011, and the Tata group’s share of the Indian wireless market stood at 10.93 percent. The group’s broadband revenues stood at Rs 2470.92 million for the March quarter.

 

 

 

Tata Communications clocked NLD revenues of Rs 3510.90 million and ILD revenues of Rs 2490.59 million in the same quarter. Tata Communications recently upped its stake in South African venture, Neotel by 12.5 percent to become the majority stakeholder with a 60 percent share in the fixed line operator.

 

 

 

Aircel comes in seventh among the Top 15 Indian telecom service providers this year, clocking gross revenues of Rs 17465.10 million in the March quarter. Aircel added 1.10 million users in April 2011, taking its total wireless subscriber base to 55.950 million subscribers, with a market share of 6.77 percent.

 

 

 

Aircel’s NLD revenues were pegged at Rs 1550.45 million, and ILD revenues were pegged at Rs 1170.15 million, while its ISP revenues stood at Rs 190.26 million. Aircel, which was a dark horse in the 3G auction, winning spectrum in 13 circles, recently secured a $100 million loan to roll out its 3G services.

 

 

 

Aircel aims to triple its subscriber base to 156 million and raise its overall market share to 13 percent in the next eight years. Aircel also recently tied up with Apple to bring the iPhone to India.

 

 

 

Securing eighth position among the top wireless service providers in India is MTNL, which posted revenues of Rs 9435.30 million for the March quarter, with a fiscal net loss amounting to Rs 20611 million in 2011.

 

 

 

Alike BSNL, MTNL has failed to score on the 3G front, and has also lost a great deal of customers to MNP. The operator added 14,633 users in April 2011, taking its total subscriber base to 5.213 million. It has a 0.66 percent share in the wireless market in India.

 

 

 

MTNL’s NLD revenues stood at Rs 10.20 million in the quarter ending March 2011, while its ISP revenues stood at Rs 1510.63 million. The merger between BSNL and MTNL is yet to be confirmed, but owing to MTNL’s being a listed company, there are some issues on the merger.  According to a statement by Kuldip Singh, chairman and MD, MTNL, “The merger is for the government to decide, but bringing synergy is one of the objectives of the merger. The idea of synergy is to provide seamless connectivity to the customers.” Most recently, MTNL launched Mobile TV for its 2G and 3G customers, and push mail services.

 

 

 

Taking its place as number nine, Unitech has reported revenues of Rs 4029.60 million in the quarter ending March 2011. Uninor added 1.451 million users in April, bringing its total subscriber base to over 25 million.

 

 

 

The operator occupies a 2.93 percent share of the Indian wireless market. While Uninor became famous in Mumbai for its -Badalta Discount Plan’, providing 24/7 tariff discounts to its customers, it also started offering year-round discounted tariffs all over India. However, the operator failed to win 3G spectrum, and plans to go in for 4G instead.

 

 

 

In number ten position is Tulip Telecom, with gross revenues adding up to Rs 2762.70 million in the March quarter, with a net profit of 32.3 percent.

 

 

 

The growth was primarily driven by the enterprise data services business of the company with increased traction in existing and new industry segments. The company further augmented its fast growing services portfolio by adding an array of new products complimenting its existing products viz.

 

 

 

Managed VC, Video Surveillance, Collaboration tools, and more. Tulip’s NLD gross revenues stood at Rs 2470.31 million, while its ILD revenues stood at Rs 10.11 million in the March quarter. The service provider’s ISP revenues during the same period stood at Rs 280.85 million. Tulip recently tied up with IBM to build India’s largest data centre in Bengaluru.

 

 

 

Holding eleventh position among the top service providers is Sistema Shyam Teleservices, with revenues of Rs 2370.30 million in the March quarter. Sistema holds a 1.29 percent share of the wireless market in India. Videocon comes in at twelfth position, reporting gross revenues of Rs 1889.30 million in the quarter ending March 2011.

 

 

 

Videocon added 134,399 new subscribers in April, giving it a total subscriber base of 7.240 million subscribers, and a 0.88 percent share of the wireless market.

 

 

 

Videocon’s NLD revenues for the March quarter stood at Rs 190.98 million. Loop Mobile comes in at thirteenth place, with revenues of Rs 1854.50 million. Loop mobile added 21,328 users in April 2011 taking its total subscriber base to 3.115 million subscribers, with a wireless marketshare of 0.38 percent.

 

 

 

Occupying fourteenth place is BT, reporting revenues of Rs 1538 million in the March quarter. BT’s ILD revenues during the same period stood at Rs 1530.80 million.

 

 

 

Last, but not the least in fifteenth position on our chart of top telecom service providers is Verizon, with revenues of Rs 1186.50 million in the quarter ending March 2011. Verizon’s ISP revenues for the March quarter stood at Rs 60 million, while its ILD revenues totaled Rs 1120.65 million.

 

 

 

 

 

Other prominent service providers are STel, Sing Tel, Sify Technologies, Rail Tel, HCL, Cable&Wireless, AT&T and Etisalat, who are among the Top 20 service providers in India.

 

 

 

Broadband subscription grew by 1.17 percent to reach 12.01 million subscribers in April 2011, compared to 11.87 million in March, displaying a slow growth in Internet penetration – yet to see the effects of 3G and BWA data speeds.

 

 

 

Active wireless subscribers in VLR touched 583.22 million in April, with rural teledensity growing at a faster pace than urban, showing a quick uptake in mobile telephony and the rise of the upwardly mobile rural populace, for whom there has been a sudden rise in m-applications.

 

 

 

The overall wireless teledensity as of March 2011 is 69.19 million, while the overall wireline teledensity declined by almost 3 million to reach 34.73 million, emphasizing the sharp decline in fixed line all over the country, and the corresponding growth of wireless communication.

 

 

 

By Beryl M

 

 

[email protected]

 

 

 

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