Public sector giants BSNL and MTNL [Get Quote] are fast losing their telecom services market share to private sector competitors notwithstanding their growth in rapidly rising mobile telephony.

"Over the recent period, PSU operators BSNL and MTNL have lost market share in fixed telephony from 98.65 per cent to 91.39 per cent. In the past two years, PSUs have actually seen a decline in the number of fixed lines while such lines have grown in the private sector," the Economic Survey, tabled in Parliament on Friday, said.

In fact, since 2001-02, both the PSUs have been gradually losing market share to their private counterparts from peak of 98.65 per cent to 91.39 per cent till October 2004, it said.

• Economic Survey 2004-05: Complete Coverage

However, at the same time, the PSUs actually gained market share in mobile telephony from 3.98 per cent to 20.21 per cent, it added.

"Overall the share of PSUs declined from 90 per cent to 55.6 per cent," the survey pointed out.

Till October 2004, both the PSUs had a mobile subscriber base of 89 lakh, while that of private operators stood at 3.55 crore. On the fixed line segment, while both the PSUs have a customer base of 4.03 crore, private sector has 38 lakh customers, it said.

In 1999, both mobile phones and private sector separately accounted for five per cent of the total number of phones. In October 2004, mobile phones accounted for 50 per cent of total phones and the private sector accounted for 44 per cent of total phones, the survey said.