TRAI’s latest report on ‘Indian Telecom Service Performance Indicators’ has three main highlights, observed during Jan-Mar 2010. First, rural tele-density has increased reasonably, accounting to 32{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of total telephone sub base in India. Second, ARPU is down substantially as compared to previous year’s recorded figures during same period. And lastly, there’s need to improve broadband penetration in India- a prima foci.

Instead of pulling regulator or DoT, for not keeping telecom policies in sync with telecom sector’s growth demands, what we need to understand here is that, the highlights pose unique challenges to everyone involved in the entire Telecom ecosystem. According to TRAI, urban tele-density has already crossed 100{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} mark last year (119{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} as on Mar 2010), while rural tele-density could reach to reasonable 24{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} mark during last quarter. Rural sub base has grown ( mainly wireless) from 174 million to whopping 200 million mark at end of Mar 2010, as compared to 420 million urban sub base.  In other words, every third person holding mobile phone is from rural India. Why not to tap the growing segment?

Now the real mess! As compared to Mar-2009, Indian Telecom sector has recorded 45{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} growth in subscriber base ( 429 million in Mar-2009 to 621 million in Mar-2010), but during the same period GSM ARPU figure has dropped by 36{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}, from Rs 205 in Mar-09 to Rs 131 in Mar-2010. Same is true for CDMA, where ARPU dropped by 22{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} to mere Rs 76 at the end of Mar-2010.

Internet subscriber growth in India is merely 6{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} on quarterly basis (16 million), while broadband growth is registered at 12{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}, taking tally of broadband subscriber base to 8.71 million (only!) at the end of Mar-2010. There’s Y-o-Y growth of 41{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} in broadband sub base, but it’s really disheartening to see that the ratio of broadband connections to telephone connections is still less than 1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3}. In other words, not even 1{af589cdba9d77786c8c861317dbad60bba1e2ebbf56e2ffab874a1b59fde9ce3} of people in India have access to broadband i.e. 256kbps wired/wireless Internet.  We are still far behind!

With the advent of NGN mobile & wireless broadband services, we could see rise in Internet & broadband penetration in India, but pricing will play a big role in spreading the word. Moreover, the cutthroat competition in voice tariff segment is likely to take toll of ARPU further and subsequently, revenue figures will take hit too. We are yet to reach bottom!

Before ending this discussion, let me share a truly remarkable initiative by FCC, when it yesterday opened a unified Consumer Help Center to address problems commonly faced by US Telecom consumers. TRAI can surely take cue from this!

Tags : ARPUbroadband penetrationPerformance Indicator reportrural teledensityTRAIurban teledensity