Telecom units ride demand surge

Telecommunications companies (telcos) in eastern India are witnessing strong demand despite the overall slowdown of the economy.

In fact, many plan to introduce more value-added services, go in for retail escalation and for network and capacity building.

The industry estimates the robust subscriber addition of 9 million per month to continue, if not increase, for the next two years.

According to the telcos, many corporates are looking at cost cutting measures, like restricting travel but compensating with teleconferencing and videoconferencing.

"In fact, with the overall slowdown, companies now are using the mobile and videoconferencing services more regularly to find out about day-to-day profits," reasoned Ajai Puri, CEO – Bengal, Bharti Airtel.

According to Sridhar Rao, CEO-East, Vodafone, "International calling and roaming charges have come down drastically and are affordable these days. While companies have realized that it is cheaper to talk than to travel during recession, average revenue per user for telcos may not be hit as people are using this mode more often now."

According to industry estimates, average revenue per user (ARPU) currently is around Rs 250.

Aircel, is looking at growing its customer base in Kolkata to more than 4 lakh this fiscal, from 3.5 lakh at present, on the back of increased focus on network expansion and aggressive marketing through innovative brand campaigns. Aircel ventured into Kolkata six months back.

Praveg Gupta, business head of Kolkata circle, Aircel, said, “We would also be increasing the number of towers from 900 to 1000 in Kolkata circle by December.”

"Communications as a sector may not face a slowdown as mobile and internet have become basic necessities," a Reliance spokesperson said.

According to S K Chakravorty, chief general manager of Calcutta Telephones, "We will launch 3G services early next year. We expect our subscriber base to double after that. Also 3G will enable us to introduce a lot more value-added-services as consumers are increasingly looking outside of voice-based services."

Among other plans, telcos are also investing in increasing retail presence.

While Essar Group’s MobileStore reportedly plans to have a total of 2,500 branded outlets in India from 1,300 right now, Reliance World and Reliance Mobile Stores would move up to a total of 5,000 stores by 2010 from close to 2,000 right now, sources said.

Telcos are also investing in more value-added-services (VAS) in a bid to enhance their subscriber base. The latest to be launched in India is the voice SMS, where subscribers can record message, song or just voice, in any language and send to a friend.

While operators like Bharti, BSNL and Reliance have already launched the service, Vodafone introduced it in East last week.

According to analysts, voice SMS is expected to contribute around 40 per cent to the total revenues of telcos launching this service. In terms of revenues, VAS currently contributes 10 per cent to the total turnover of telcos and analysts predict that voice SMS would contribute 10 per cent to VAS revenues.

According to a Bharti spokesperson, post launch 6-7 per cent of SMS traffic has already started using voice SMS.