Macro Matters

Are land lines ringing from the grave?

Now, subscribers are seeing the benefits of fixed line services.

 |  Macro Matters  |  3-minute read |   22-11-2015
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Chances are less than one in every ten reader of this article has a land line, or fixed line telephone at home. Among those who indeed have one at home, most rarely use it to make calls. From being the only medium to communicate telephonically until the mid-1990s in the metros and until mid-2000s in many villages across the country, the much coveted but extremely unreliable fixed line services of public sector enterprises is now being shunned as mobile phones have become ubiquitous, offering relatively better and value-added services at low tariffs. But that’s an old story.

Now, subscribers are seeing the benefits of fixed line services - better voice quality and higher data transfer speeds. And, many who gave up their Bharat Sanchar Nigam Ltd (BSNL) and, to a smaller extent, Mahanagar Telephone Nigam Ltd (MTNL) fixed line connections are increasingly turning to fixed line services of private sector players, mostly for their high speed broadband services.

In September 2015, for instance, according to data published by the Telecom Regulatory Authority of India (TRAI), for every ten BSNL fixed line phones surrendered, more than four were added by the private players, chiefly, Bharti Airtel, Tata Teleservices and Vodafone. The three companies added more than 45,000 subscribers that month. MTNL, which provides services in Delhi and Mumbai, has been luckier than BSNL - it has managed to escape mass exodus of its fixed line subscribers.

It has, in fact, steadily gained a few new subscribers in Delhi over the years. The reverse is true in Mumbai. It is probable that most of its new subscribers in Delhi are government departments and enterprises.

At the end of September, MTNL continued to be second largest fixed line service provider after BSNL, with Bharti Airtel snapping at its heels. But the lead was very narrow - less than 6,500 subscribers. Both have over 3.5 million subscribers each. By October end, Bharti Airtel would have toppled MTNL to become the second largest fixed line service provider as subscribers increasingly opt for private sector players over BSNL - we will have to wait until next month for official data. It is already the largest mobile services provider in the country, with three times the subscribers of BSNL.

BSNL can take some comfort that it continues to be the largest fixed line service provider, reaching almost every corner of the country. But, its fixed line subscriber numbers are less than half of what it had at the peak about a decade ago - it had about 15.6 million subscribers in September 2015, down from 38 million ten years ago. It loses about 1,00,000 subscribers a month. Its market share is down to 60 per cent, while the private sector players with 6.8 million subscribers have 26 per cent of the fixed line telecom services market.

The convenience offered by mobile phones will lead to further erosion of BSNL’s fixed line subscriber base in mid-sized and small towns and villages where spectrum shortage is not affecting quality of voice or data transfers.

However, when people discover that data speed offered on their mobile phones is not keeping pace with consumption, many more are likely to sign up with the private players who are aggressively pushing broadband plans bundled with free voice calls for in-home consumption of data. That is already happening in bigger cities where the quality of mobile services has deteriorated with rapid increase in subscriber numbers and limited availability of spectrum. Having said that, mobile phone subscription will continue to grow and continue to outnumber fixed line connections, the proportion being 38:1. Sadly, BSNL has not found a magic mantra to stop its slide or to win back subscribers who had deserted it.

Writer

Tina Edwin Tina Edwin @tinaedwin

The writer is a Delhi-based journalist.

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