Cell world hits by verification bumper

MUMBAI: Mobile telephony growth remained below the peak of 6 million subscriber additions per month for the second consecutive month in April as stringent verification rules and capacity constraints put the brakes on the fastest growing market in the world.

Net subscriber addition in April stood at 5.38 million, way below the 5.96-million mark in February and substantially lower than the 6.73 million subscribers added in January, 2007. The total wireless subscriber base now stands at 166.7 million, translating into a mobile penetration rate of 15%.

An analysis of the numbers released by the Cellular Operators Association of India (COAI) and CDMA industry body AUSPI shows that while Bharti Airtel, Hutchison Essar and Idea Cellular managed to post strong growth, those hit were Bharat Sanchar Nigam (BSNL), Mahanagar Telephone Nigam (MTNL) and Reliance Communications (RCOM).

According to COAI secretary general TV Ramachandran, the decline in April was largely due to the extremely low additions by BSNL. The state-run telephone giant added just 0.3 million subscribers in April, compared to the record 2 million subscribers it added in March. Mr Ramachandran said that the net subscriber additions will once again touch the 6-million mark beginning May.

BSNL director (finance) SD Saxena said that besides the surrender of connections due to verification, a capacity crunch led to very low additions. “We have not yet placed the order of 45.5 million GSM lines. Due to the delay in laying new lines, we could not accommodate subscribers despite heavy demand,” he told ET. However, the PSU telco hopes to add over 1 million subscribers this month as it is readying to award the contract to equipment vendors Nokia and Ericsson.

The decline in BSNL’s net adds helped RCOM to improve its market share marginally from a low of 17.4% in March to 17.9% in April.RCOM had de-activated 5.6 million subscribers in March to comply with mandatory subscriber verification norms, which hit the net additions of the industry. In April, the company added only 1.02 million subscribers, below the Q3 average of 1.1 million. This under performance by RCOM affected the industry’s overall subscriber addition.

RCOM president (personal business) SP Shukla, however, said the decline was an industry-wide trend regular in the month of April. “There is nothing unusual about it,” he told ET.

However, Airtel, Hutch and Idea were not affected. Airtel reported net additions of 1.75 million compared with an April-end subscriber base of 38.9 million. Bharti now commands an all-India marketshare of 23.3% against 23.0% last month, and 20.7% in April 2006.

Idea’s subscribers grew 3.9% over March to 14.6 million in April. The company added 0.55 million users in April compared with 0.37 million added in March. Idea now has an all-India marketshare of 8.7%. Hutch, witnessed a strong month, with monthly net adds of 1.26 million over 1.1 million in March. Its user base now stands at 27.7 million, and has an all-India marketshare of 16.6%.