By the end of November 2008, Indias wireline subscriber base had declined by 0.17 million (0.44%) to 38.05 million, and its broadband base had grown to 5.28 million, an increase of 230,000 connection at 4.55%. The wireline-to-broadband conversion rate was at 13.88%.
(Charts in this post: Broadband connections and conversion, Mobile operator subscriber growth and marketshare, Statewise distribution of mobile subscribers, Statewise distribution of Broadband subscribers)
For the last 6 months that we have been analysing the telecom numbers, two factors have stood out: Firstly, that the growth in broadband connections has too slow at between 3.06%-5.59% especially on a low base of less than 5.5 million connections, and secondly that the wireline connection base has been consistently declining, at 0.33%-0.71% per month.
According to our calculations*, if wireless broadband does not come into play, India will achieve 100% wireline-to-broadband conversion by September 2012, but with only around 31.4 million broadband connections.
Three things can improve this situation:
— A miraculous increase in wireline connections
— Launch of affordable wireless services.
The ideal solution: affordable wireline connectivity, and the unbundling of the last mile, which involves allowing all telecom operators access to existing government wireline connections currently only accessible by the BSNL and MTNL. With the government vying for a public listing for BSNL, we think that the unbundling of the last mile will negatively impact the IPO since BSNL will lose a competitive advantage.
The Mobile juggernaut rolls along virtually unaffected by the economic downturn in the economy. In November 2008, India added 10.35 million mobile subscribers, down marginally from the 10.42 million subscribers added in October 2008. With the total subscriber base now at 336.08 million, in January 2009, the 350 million summit should be conquered.
Some interesting facts emerging from the growth:
— Even though on a small base, Shyam Telelink (Shyam Sistema) reported an increase of 40.65% in its subscriber base, up to 273, 478 from 194,434.
— Reliance Communications has the second largest subscriber base, albeit closely followed by Vodafone Essar, if you combine GSM and CDMA subscribers. If you remove the GSM numbers, it would be the 3rd largest.
— Andhra Pradesh has the maximum number of mobile connections, followed by Maharashtra, Tamil Nadu and UP East.
— On a fairly large base of 16,003,010, Bihar recorded the highest increase in subscribers at 830,087, a growth of 5.47%. Chennai too recorded a high percentage of growth at 6.45%.
However, do note that these are subscriber numbers as reported by telecom operators to the TRAI.
* Assumptions: We’ve based our broadband calculations on the following averages for the last 7 months:
— Wireline connections will decline by 0.42% month-on-month
— Broadband will increase by 4% month-on-month