India's Top Telecom Operators Add Subscribers in January

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 [e-mail]

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