The fixed line telephone business in India in 2009-10 saw a negative growth with revenues dropping by 23.3 per cent to Rs 18,900 crore from 24,649 crore in the corresponding previous fiscal.

The top three fixed line players - BSNL, MTNL and Bharti Airtel  reported a revenue decline.

However, some companies like Reliance Communications, TTSL and TTML posted growth in revenues, a recent survey by telecom industry journal 'Voice and Data' revealed.

The International Long Distance (ILD) segment posted a 17.3 per cent growth to earn a revenue of Rs 17,600 crore, thanks to a booming subscriber base of almost 600 million.

While Tata Communications (erstwhile VSNL) grew by 12.7 per cent, the growth of Reliance Communications and BSNL was by 4.1 per cent and 4.6 per cent respectively, the survey revealed.

The ILD growth was a result of the Indian telecom operators increasing their presence in foreign markets. This brought in additional ILD revenue for domestic operators. With falling rates there has been a substantial growth in terms of inbound voice traffic into India.

Adding to their challenges is VoIP (Voice over Internet Protocol) based calling. The big challenge for ILD operators is the growing popularity of formal as well as informal (and illegal) internet telephony operators (for both inbound and outbound internal calls), who bypass the licenced operators.


The National Long Distance (NLD) market too bore the brunt of the price war as it recorded a Rs 16,400-crore revenue, by posting a 13.6 per cent growth in 2009-10 as compared to a 48 per cent growth in 2008-09, the survey said.

Broadband services posted revenues of Rs 9,000 crore recording a growth of 20 per cent over the last year. Both BSNL and MTNL saw 57.3 per cent and 92 per cent growth in their broadband revenues respectively.

The Indian Government had in 2004 set a target of 20 million broadband connections in the country by 2010, but, the survey found, the number of broadband subscribers stood at just 8.75 million subscribers.

Here also, the top 30 cities contributed to nearly 60 per cent of all the broadband subscribers.

The only saving grace is the 149.03 million subscribers to wireless telecom services, which recorded a jump of 47.41 per cent in the 12-month period ended December 2009.

The popularity of value added services (VAS), including SMS, ring-tone downloads, cricket scores and also advanced navigation aids and mobile payment features, picked up during 2009-10.

The vast potential of the market kept the VAS providers on their toes to build more India-focused content and services.

The VAS business, fast growing in terms of number of players, is highly competitive leading to wafer thin margins.

And with 3G coming in, this space is likely to get even more competitive and exciting.