India Broadband

Public sector telecom giant BSNL enjoys the dominant position among internet service providers (ISP) with a 43 per cent market share as of June, followed by MTNL at a distant 19 per cent, according to a Trai study.

While ranking the companies, the study expressed grave concern over the slackening pace of internet and broadband penetration as a result of which not even a single target set by the regulator in 2005 has been met.

As of June this year, there were 7.71 million internet (including broadband) connections and about 20 per cent of the total internet subscribers are broadband users but this segment is growing at a faster rate.

Annual growth rate of internet subscribers for the last three years is about 25 per cent. Growth rate for the quarter ending June-06 has been 11 per cent, translating into an annual growth rate of about 44 per cent.

As of June this year, 62 per cent of the total internet subscribers were with the PSUs as against 56 per cent in March 2006.

While BSNL operates in rest of the country except Delhi and Mumbai, MTNL operates only in Delhi and Mumbai. Private ISP Sify has 11.83 per cent market share.

The market share of VSNL has fallen to a low of 6 per cent followed by Bharti at 5.73 per cent. There are 153 ISPs in operation, 86 per cent of the total subscriber base is with the above five leading ISPs.

The pan-India presence of BSNL and MTNL and their dominant status in fixed service, puts them in an advantageous position to offer combo plans.

In 2005, Trai had set a target of 6 million internet subscribers and as many broadband subscribers, whereas the actual user base achieved was 5.55 million. In broadband, the target was 3 million, the achieved base was 0.18 million.

For 2007, the internet subscriber base target is 18 million, while that of broadband base is 9 million. And by 2010, the internet user target is 40 million and the broadband subscriber target is 20 million.

“There has been an overall shortfall of 4.5 lakh subscribers against the set target by the year 2005 and this was caused by the slack growth of broadband. As of June 2006, there were 7.71 million internet subscribers (including broadband) and 1.56 million broadband subscribers. Next milestone as per Trai's recommendations (March 2007) is just three quarters ahead and the growth rate required is 133 per cent in case of total internet subscribers and 477 per cent in case of broadband,” the study said.

Subscriber figures are the number of connections and do not reflect the actual number of users of internet. Dial-up connections are still the most popular way to connect to the internet.

The percentage of internet subscribers using dial-up connection for internet access decreased from 84 per cent in March 2005 to 66 per cent by March 2006 and it was 60 per cent at the end of June 2006.

Even after a year since this post was made, stats still remain almost the same with very little shift in market shares. Reliance and Airtel are making a lot of effort to increase their share of the market but they have restricted themselves to densely populated areas which obviously keeps them from becoming the market leader as the real growth is coming from rural areas and small towns where only Bsnl has dared to venture and is reaping the benefits.

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