PCOs ringing loud despite cellular boom

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Thomas K. Thomas

New Delhi, Feb. 14

MOBILE revolution and steep reductions in long distance calls may have made fixed line telephone little costlier proposition, but there seems to be no negative impact on the growth of the Public Call Offices (PCOs) in the country.

The number of PCO booths has gone up from 18 lakh in December 2003 to 23 lakh at the end of 2004.

State-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, which also have the largest fixed line network, added over 4 lakh PCOs during the period to touch 20 lakh booths.

According to data available with the Department of Telecom and the Telecom Regulatory Authority of India (TRAI), the largest private player in the fray is Reliance Infocomm, which has about 1.3 lakh PCO booths.

During July-September 2004, Reliance added 79,693 PCOs which is also the highest by any private fixed line operator. Bharti has about 90,000 PCOs and Tata Teleservices about 70,000.

In Delhi alone, the number of PCOs owned by Bharti doubled to 10,000 by January 2005 compared with just over 5,000 in March 2004.

The growth in numbers beats industry expectations that had sounded the death knell for the PCO segment in the light of steep cuts in long distance tariffs in 2003 and an interconnection regulation issued by the TRAI that had slapped an access charge on calls made from landlines to different networks. These affected the commissions offered to PCO booth owners.

However, the fight for survival resulted in the emergence of a new breed of PCO booths, which now has become one-stop telecom solution providers. Market analysts point out that the impact on booth owner's revenues from the reduction in long distance calls has been compensated by the gains from other business avenues . "Mobile boom has in fact provided PCOs a new lease of life since booth owners have now become dealers for mobile companies. Some of the PCOs also stock mobile handsets," said a cellular operator in Delhi.

In fact, mobile operators are foraying into the PCO segment with their cellular technology instead of the traditional wireline technology. Recently, Mr Sam Pitroda promoted C-Sam Inc, along with the MTNL, launched MerchantWallet for secure payment and transaction platforms at MTNL's PCO booths in Delhi and Mumbai.

(This article was published in the Business Line print edition dated February 15, 2005)
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