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Mumbai, India , October 11, 2010 View All Press Releases

Gartner Says Indian Consumer Fixed Services Market Revenue To Reach Rs 245 Billion In 2010

 

The Indian consumer fixed services market is on pace to reach Rs 245 billion in 2010, a 5 percent increase from 2009 revenue of Rs 232 billion, according to Gartner, Inc. The consumer fixed services market includes consumer voice service revenue, consumer broadband access revenue and consumer internet access revenue. Consumer fixed voice revenue is forecast to reach Rs 183 billion in 2010, a 2 percent decline from 2009. From 2010 through 2014, voice revenue will further decline by 8 percent.

“The primary reason for the decline in voice revenue is the decrease in fixed voice lines. Voice traffic has substantially shifted to mobile connections from fixed connections,” said Neha Gupta, senior research analyst at Gartner. “We will continue to see this trend going forward with consumers abandoning their fixed lines even as service providers are increasingly bundling their broadband and lately IPTV to retain their fixed line customers.”

Average Revenue Per User (ARPU) of voice connections will remain the same due to the limited migration of usage-based minutes to mobile from the fixed line phones, which the service providers will be successful in retaining.

The Indian consumer fixed line services market will see growth from the broadband and internet access sectors, which will collectively grow to Rs. 61 billion in 2010. In 2010, household broadband penetration will cross 4 percent. The broadband market continues to be dominated by DSL, which accounted for 87 percent of all the broadband connections in 2009 and is expected to grow 48 percent in 2010.

Operators have started to focus on rolling-out FTTx/Ethernet as demand for high speed broadband and bandwidth-heavy internet applications increase. Wireless broadband services will also grow significantly from 2011, expanding broadband coverage to areas previously not covered by copper telephone lines.

“Service providers will continue to lower broadband selling prices to attract new users especially in rural areas. This will put downward pressure on ARPU. Simultaneously, the move toward more expensive, higher-speed access will help push up average selling prices. These two forces will negate each other and we expect the ARPU of broadband connections to increase marginally over the next five years,” said Ms. Gupta.

While broadband will not be widely available outside the major metropolitan areas within the next five years, dial-up accounts will continue to grow in India, albeit at a much lower rate than broadband. In fact, by 2010 end, broadband will overtake dial-up as the primary access technology.

Consumer Fixed Services Market

“Consumers in the services market are slow to adopt new technologies. They are also slow to change their spending habits. This has been especially evident in the past year, where we saw that the Indian consumer fixed services market was resilient during the economic downturn. This slow rate of change in spending habits is actually benefiting the Indian consumer fixed services market,” said Ms. Gupta.

In the next five years, revenues from broadband services will significantly contribute to the overall growth of fixed line services in India, increasing from 9 percent in 2009 to 25 percent in 2014. Revenue from voice services will continue to dominate the overall fixed line services in India. However its contribution will go down from 81 percent in 2009 to 50 percent in 2014.

Additional information is available in the report "Forecast: Consumer Fixed Voice, Internet and Broadband Service Revenue, Worldwide, 2008-2014, 2Q10 Update" which is available on the Gartner website at http://www.gartner.com/resId=1442315.

 

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