By R. Jai Krishna
NEW DELHI--India's top telecommunications companies added
subscribers for the first time in several months in January,
bringing in positive news for an industry hit in recent years by
policy uncertainties and price wars.
Bharti Airtel Ltd. (532454.BY), the industry leader based on
customer numbers, added about 2.29 million subscribers in the past
month, data from the Cellular Operators Association of India showed
Friday. Its nearest rival, the local unit of Vodafone Group PLC
(VOD.LN), added 223,868 new users, while Idea Cellular Ltd.
(532822.BY) got 2.45 million new customers in January.
All of them have lost customers at least in the previous four
months as they raised phone-call tariffs and removed inactive
customers from their networks. The tariff increases came after a
margin-denting price war, started by service providers who began
operations since 2008 but which spread to the entire industry.
Competition started easing from February last year after the
Supreme Court revoked all the telecom licenses given in 2008 citing
corruption in their allotment. Some of the companies affected by
the order have scaled down services, while some have closed
down.
Telecom operators such as Bharti and Vodafone are expected to
benefit from the improving business climate in the telecom
industry. For their customer, however, this would likely lead to
higher cost for making phone calls and using data services.
The Cellular Operators Association represents operators who
employ the global system for mobile communications, or GSM,
technology. About 90% of India's cellphone customers use GSM-based
services.
GSM cellular services in India had 657.56 million subscribers at
the end of January, an increase of 0.06% from December, it
said.
Rajan S. Mathews, director-general of the association, said the
better numbers indicate that the operators have almost competed the
process of removing inactive customers from their networks. "We
hope to see continuous improvements" in subscribers numbers, he
said.
The profitability of cellular companies is still under pressure
because of other issues such as high bandwidth costs and regulatory
expenses, Mr. Mathews said.
Vodafone India and Idea Cellular declined comment, while Bharti
wasn't reachable for comment.
Among smaller local telecom operators, Norwegian firm Telenor
ASA's (TEL.OS) Indian unit lost 1.4 million users in January,
compared with 918,555 users it gained a month earlier. Videocon
Industries Ltd.'s (511389.BY) telecom venture also lost almost 1.4
million users, compared with 371,953 in December.
Telenor and Videocon are among the companies which lost most of
their permits due to the Supreme Court Order. They have got
bandwidth permits in some service areas through a government
auction of frequencies in November.
Among others, Aircel Ltd. shed 1.77 million users in
January.
The numbers for Reliance Communications Ltd. (532712.BY), one of
India's top telecom providers, weren't available. It provides
services based on both GSM and code division multiple access
technologies.
Write to R. Jai Krishna at krishna.jai@dowjones.com
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