Reliance India Base Sees 2007 Growth Fall Behind 2006

The latest figures from the Indian operators' associations the COAI and AUSPI show that the Indian mobile market has seen a net 20.55m new customers in the first four months of 2007 - less than the 20.96m recorded in the same period in 2006. The reason for this is two-fold. Firstly, in April 2006 Reliance Communications made an adjustment to the way it counted mobile subscribers, including its fixed-wireless customers in the figures for the first time and boosting its ranks as a result. Secondly, March 2007 saw the termination of India's customer re-verification procedure whereby the personal details of all of the country's mobile subscribers had to be checked by the operators - and a procedure which saw the same operator, Reliance, disconnect some 4m unverified customers.

The chart below show these customer movements.

A slower month in April from state-owned operator BSNL as a result of temporary capacity problems, together with a significant cull of customers by MTNL in Delhi, compounded the effect of the customer movements at Reliance. These left Reliance with 29.8m customers at the end of April 2007 and nearer to third and fourth placed operators BSNL (28.0m) and Hutch (27.7m) than to market leader Bharti.

Bharti has been steadily pulling away from Reliance over the last year, and as we go to press the company reports that it has now passed through the 40m customer mark. Reliance itself stood on the brink of breaking the 30m customer barrier (for the second time) at the end of April, ahead of BSNL and Hutch which are unlikely to achieve the same feat until June or July.

The result for the Indian operators' market share positions in the first four months of the year was a gain of 1.4pp for Bharti, 0.6pp for Hutch and 0.4pp for BSNL, at the expense of Reliance which lost 2.8pp.

However, the best proportionate gain by some margin was registered by Maxis Communications' Aircel company, which gained 0.5pp to reach a share of 3.63% of the national market. Aircel's Dishnet Wireless subsidiary has expanded the company's reach from two telecoms circles to nine over the last eighteen months and helped drive customer growth to 31% between 31st December and 30th April - way in excess of the 14.4% market average (see "Maxis Q1 2007 Results").

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