Airtels online ennui

Written by Saikat Neogi | Updated: Aug 10 2012, 09:47am hrs
While the National Telecom Policy, 2011, has targeted 175 million broadband connections by 2017 and 600 million by 2020 and that too at 2 Mbps download speed, current numbers suggest that achieving such an ambitious target will indeed be an ardous task. As per Trai data till March 2012, broadband connections were just 13.81 million and the total internet subscribers 22.86 million. Sequentially, the growth in internet connection is just 2.1% in the quarter ended March and the revenue of internet service providers grew little over 9% to R2,923.90 crore.

Stagnating broadband connections are also one of the reasons for the shocking June 2012 results of Airtel where net profit fell 24% to R762 crore sequentially. The companys internet subscriber base has stagnated sequentially at 3.27 million and the number has, in fact, fallen from 3.32 million in June last year. Though the average revenue per user (Arpu) has risen risen 3% sequentially to R962, this is not that encouraging considering the fact that the Arpu in June 2010 was R961 and has been declining ever since. So, at a time when revenue from voice is on a decline, stagnating internet business will be a major cause of concern for telecom companies.