Broadband to drive fixed line telecom services to touch Rs 24,000 crore in 2012

Telecom Lead India: The fixed line telecom services
market in India is expected to grow by two percent to touch Rs 24,000 crore in

Increasing broadband usage will drive the Indian landline

The revenues from fixed line services, which include
revenues from consumer voice service, broadband access and Internet access,
stood at Rs. 23,500 crore in 2011, according to Gartner.

The fixed voice revenue from the consumer segment is
forecast to reach Rs 14,800 billion in 2012, a seven percent decline from 2011.
Also, 2012 through 2016, the voice revenue are expected to further decline by
25 percent.

“Voice traffic continues to shift to mobile.
Consumer voice lines have decreased and so have usage levels. Prices remain
more or less stable. In the future, decreased average revenue per unit (ARPU)
levels, coupled with a low user base, will lead to decreased voice
revenue,” said Gartner Senior Research Analyst Neha Gupta.

Consumers will continue to abandon their fixed lines even
as service providers increasingly bundle broadband and IPTV to retain their
fixed line customers.

The fixed line services market will, however, see growth
from broadband and Internet access sectors, which will is expected to
collectively grow to Rs. 9,200 crore in 2012.

In 2012, household broadband penetration is forecast to
cross six per cent. The broadband market is expected to grow 18 percent in

There has been slower than expected growth of fixed
broadband services which has mainly been due to the slow roll out of fixed
broadband infrastructure. While some operators have rolled-out FTTx/Ethernet
cables, much of the investment focus has been in wireless services.

Fixed line broadband penetration is expected to stay in
single digits till 2016.

Wireless broadband services are expected to help bridge
the demand and supply gap to some extent, especially in markets that are not
covered by copper telephone lines.

Price of fixed broadband service is also expected to
decrease as service providers attempt to attract consumers in the rural areas
and higher usage levels may offset any fall in ARPU.

The launch of higher speed, more expensive broadband
services will help push up average selling prices and ARPU. The net effect of
this will be only a slight fall in ARPU levels over the next five years.

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