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Why The Decline In Wireline Subscribers Isn’t Good For India; Subscriber Numbers

On how the Indian Governments lack of action is hampering Broadband and IPTV in India

The Indian broadband story continues to be a sad one – with an addition of just around 140,000 broadband connections in May 2008. What is telling is that between April 2007 and May 2008, India added just 1.81 million connections, bringing the total number of broadband connections in the country to 4.15 million.

This is remarkable in the context that India added more than twice that number of Wireless subscribers in May – 8.62 million. Do bear in mind, however, that while in case of wireless (Mobile + WLL), number of connections is the same as number of subscribers, this is probably not the case with Broadband. Also, Internet (Dialup) connections are separate, though they’ve remained stagnant for a while, if not declined.

The decline in wireline subscribers (down 1.7 million connection in May 2008) gives some context to the recent BSNL advertisement featuring actress Priety Zinta – “your landline number is the identity of your house”. They really are getting desperate.

As much as those in the wireless space like to highlight the decline in wireline subscriber base, it isn’t a healthy trend. The growth in the overall subscriber base is NOT a clear indication of an increase in teledensity (which is at 27.59 percent). Subscribers are common between Wireline and Wireless, and many individuals have multiple connections.

Also note that Broadband and impending IPTV initiatives have not been able to arrest the decline in wireline subscribers, and that is also restricting IPTV and Broadband growth. If this trend continues, Broadband and IPTV will not take off. The pipes that currently provide that critical last-mile access will gradually be disconnected, particularly in the urban areas, and for Internet to take off, they will need to be connected again. Already, advertising is taking notice of the mobile, and the Internet companies face a significant risk in the long term, lest broadband takes off. 100 million broadband connections by 2012 will remain a pipe dream.

Unless there’s a WiMax miracle – which would surprise me, and spectrum is yet to be auctioned – the only solution appears to be the opening up the last mile, ASAP. Which, at best, will mean post-elections.

By the way – it’s July. Lets see if it snows.

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