Info-tech

Spectrum of troubles in 2011 for telecom industry

Thomas K. Thomas New Delhi | Updated on March 12, 2018

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The past year was an unforgettable one as far as telecom is concerned with the industry struggling to keep the business profitable.

The ongoing investigations around the 2G scam coupled with the lack of clear decision making by the policy makers kept the overall sentiments low. But like in the past years, there was a lot of action this year too.

Here is a quick recap of all the interesting things that kept us hooked on.

2G scam investigation

Court hearings, CBI raids and depositions before the Joint Parliamentary Committee continued throughout the year as the nation tried to make sense of what really happened in the Telecom Ministry in 2007. While most of the accused are out on bail, the key conspirators – A. Raja, R.K. Chandolia and S. Behuria are still behind bars.

The drama over this investigation, believed to be the biggest scam in India's history, is not over and one can expect more revelations and accusations next year.

Launch of MNP

After a delay of more than three years, Mobile Number Portability was finally launched across the country. So far 23 million subscribers have put in their request for porting their number to another operator.

This is just 3 per cent of the total subscriber base, far short of the 10 per cent target expected by the TRAI.

Seeing the low uptake the TRAI had to send notices to mobile operators for failing to implement the system properly with many requests being rejected arbitrarily.

Death of an icon - Steve Jobs

The creator of the world's largest selling smartphone the iPhone bid farewell to this world after a prolonged illness. Jobs' death was one of the most widely covered event with top CEOs like Bill Gates and Government heads including Mr Barack Obama coming out to pay their respects to the icon.

New Telecom Policy

The Telecom Ministry announced a new policy which made all the right noises but without any roadmap on when and how it will be implemented. The policy has some interesting ideas including spectrum sharing, incentive for local manufacturing, permitting unrestricted Net telephony and abolishing roaming charges. But all of this is still on paper leading to more regulatory uncertainty in the sectors.

Rising tariffs and falling subscriber growth

Consumer's honeymoon with regard to low tariffs ended this year with operators jacking up prices by 25 per cent. This was the first time in 10 years when consumers were asked to pay more for services. As a result the net subscriber addition per month fell down to 6-7 million a month compared to an average run rate of 15 million last year.

Declining margins for operators

With declining subscriber growth, falling minutes of usage and average revenue per user the overall sentiments in the telecom sector was low this year.

This was reflected through declining profitability for most operators. Of the 12 operators in the market, there are only four who have positive margins.

Most of the new players are struggling with the business and may exit once the M&A policy is announced.

Smartphones made inroads

Smartphones shipments touched 7.9 million units in first nine months, growing from 2.3 million in 1Q 2011 to over 3 million in 3Q 2011 according to CyberMedia Research.

Nokia, Samsung, HTC and BlackBerry launched a wide range of devices through the year. Nokia intensified the race in this segment with its Windows-based Lumia range but Samsung took the pole post with 39.7 per cent share.

Slow 3G uptake

If one has to pick the most disappointing event in the entire year, it would have to be the poor uptake of 3G services. According to industry estimates, there are about 25 million users who have signed up for 3G, but only about 15 million would be actively using it.

Considering that operators paid nearly Rs 65,000 crore to buy 3G spectrum one was expecting a little more enthusiasm on this front.

> tkt@thehindu.co.in

Published on December 23, 2011

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