Tata Teleservices Tops New Subscriber Additions For Third Month

Indian mobile-phone operators added a record 16.67 million new subscribers in October, the highest ever, largely driven by the newly introduced per-second billing plans, according to data released by the Telecom Regulatory Authority of India (TRAI).

The total telephone subscriber base in the country increased to 525.65 million at the end of October compared to 509.03 million in the previous month, registering a 3.26 percent month-over-month growth.

Tata Teleservices ( TTSL), which is ranked sixth in terms of market share, led the additions for the third straight month with 3.87 million new users, followed by Vodafone at 2.98 million. TTSL had added 4 million subscribers in September and 3.4 million new customers in August, a 52% increase over July. Until a few months ago, TTSL was adding just about a million new users each month.

However, in terms of market share, Bharti Airtel, which added 2.7 million new users in October, retained its leadership position.

Meanwhile, sparking a fresh tariff tussle and to counter Bharti's decision to reduce roaming tariffs by 60 percent, Tata Docomo, the GSM arm of TTSL, on Sunday extended its per-second billing scheme to roaming services across the country. Its subscribers would now be charged one paisa per second for outgoing and incoming calls, while roaming. Roaming services contribute about 7-10 percent of revenues of wireless services providers.

To add to the woes of telecom operators, SMS rates are set to decline considerably, media reports suggest. According to a Times of India report, the TRAI is reconsidering its longstanding policy of non-interference on tariffs and is likely to issue a consultation paper soon to review telecom tariffs.

Over the weekend, the telecom regulator fixed Rs.19 as the porting charge if a customer opts to retain his number while moving from one operator to another. The facility, referred to as 'mobile number portability' will come into effect from January 2010.

All these new developments may hurt margins of telecom majors in the short term, analysts believe. Especially, state-owned majors like BSNL & MTNL and new players who are expected to launch their operations in the next few months are likely to bore the brunt of the tariff tussle.

Bharti Airtel's CEO Manoj Kohli said in an interview recently that the tariff war would continue for the next few quarters. Prospects for the sector, however, remain robust and Bharti, with its three-pronged strategy for growth, will emerge stronger after an expected consolidation in the industry, he said.

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