The tariff war unleashed last year by new entrants and dual tech players particularly during the second half of last fiscal has lent a heavy blow on the financial performance of operators and the industry as a whole, reveals research findings from Cybermedia’s Voice&Data magazine.

“This is the worst telecom services revenue growth in the last five years. More tariff wars are not sustainable. There is likely to be consolidation ahead which should arrest more tariff wars and revenue attrition. The 3G rollout and rising broadband penetration, including wireless broadband, will also help improve service revenue—but the impact of these will be felt more in fiscal 2011-12 than this year,” says Prasanto K Roy, chief editor, CyberMedia India.

Fiscal 2009-10 saw the Indian telecom service providers registering revenues of Rs.1,59,510 crore at a growth rate of 2.5%. The slowed down growth rate is depressing when compared to growth rate of 20% recorded in 2008-09 for revenues of Rs.155,683 crore.

The revenues under consideration include revenues from cellular, fixed line, National Long Distance (NLD), International Long Distance (ILD), broadband, VSAT and Radio Trunking businesses.

Mobile Services:

The research squarely blames the intense tariff war for the steep fall and overall slowdown particularly in the case of mobile services market because even with 49% increase in subscriber base, the revenues from mobile services increased just 3.6% to Rs.96,860 crore from Rs.93,522 crore recorded a year ago. Two years ago, the cellular services market had recorded a growth rate of 36.4%.

The research expects the competition to become more intense with 14 active mobile operators in the fray.

New additions are expected to come from rural areas. In 20090-10 fiscal, three-fifths of the new additions came from rural areas.

In cities, the research claims that its findings reveal that almost 20% of the mobile subscribers are inactive.

Fixedline Services:                                                                                                            

The fixedline services market witnessed a negative growth of 23.3% to Rs.18,900 crore with all the top three fixedline players namely BSNL, MTNL and Bharti Airtel reporting decline in revenues.

ILD:

The International Long Distance (ILD) services market posted a 17.3% growth with revenues of Rs.17,600 crore and subscriber base of about 600 million. Within the ILD segment, Tata Communications (erstwhile VSNL), grew 12.7%, Reliance Communications and BSNL grew at 4.1% and 4.6% respectively. Bharti Airtel however saw a 1% drop in revenues due to price drops.

According to Voice&Data, the ILD segment grew as the Indian telecom operators increased their presence in foreign markets which resulted in additional ILD revenue for domestic operators. With falling rates there has been a substantial growth of inbound voice traffic into India, says the research.

NLD:

The National Long Distance (NLD) services dropped significantly with revenues of Rs.16,400 crore at a much reduced slowed down growth rate of only 13.6% while the growth rate was 48% in 2008-09.

3G:

While the research does not reveals the revenues managed by 3G services, it points out that PSUs BSNL and MTNL have a combined subscriber base of 1.8 million.

Broadband:

The broadband services posted revenues of Rs.9,000 crore at a growth of 20% on a yoy comparison with market leader BSNL reporting a 57.3% rise in revenues followed by MTNL with revenue rise of 92%.

Broadband, the fifth large segment of the telecom services space, posted revenues of Rs. 9,000 crore recording a growth of 20% over last year. Both BSNL and MTNL saw 57.3% and 92% growth in their broadband reven