India fixed services market to reach Rs 240 bn in 2012: Gartner

The fixed line telecom services market in the country is expected to grow marginally by two per cent to touch Rs 24,000 crore (Rs 240 billion)  in 2012, mainly on the back of increasing braodband usage, research firm Gartner said.

The revenues from fixed line services, which include revenues from consumer voice service, broadband access and Internet access, stood at Rs 23,500 crore (Rs 235 billion) in 2011, Gartner said in a statement.

The fixed voice revenue from the consumer segment is forecast to reach Rs 14,800 billion in 2012, a seven per cent decline from 2011. Also, 2012 through 2016, the voice revenue are expected to further decline by 25 per cent.

"Voice traffic continues to shift to mobile. Consumer voice lines have decreased and so have usage levels. Prices remain more or less stable. In the future, decreased average revenue per unit (ARPU) levels, coupled with a low user base, will lead to decreased voice revenue," Gartner Senior Research Analyst Neha Gupta said.

Consumers will continue to abandon their fixed lines even as service providers increasingly bundle broadband and IPTV to retain their fixed line customers, she added.

The fixed line services market will, however, see growth from broadband and Internet access sectors, which will is expected to collectively grow to Rs 9,200 crore (92 billion) in 2012.

In 2012,

household broadband penetration is forecast to cross six per cent. The broadband market is expected to grow 18 per cent in 2012.

"There has been slower than expected growth of fixed broadband services – which has mainly been due to the slow roll out of fixed broadband infrastructure. While some operators have rolled-out FTTx/Ethernet cables, much of the investment focus has been in wireless services," Gupta said.

Fixed line broadband penetration is expected to stay in single digits till 2016, she added.

"Wireless broadband services are expected to help bridge the demand and supply gap to some extent, especially in markets that are not covered by copper telephone lines," Gupta said.

Price of fixed broadband service is also expected to decrease as service providers attempt to attract consumers in the rural areas and higher usage levels may offset any fall in average revenue per user (ARPU).

"The launch of higher speed, more expensive broadband services will help push up average selling prices and ARPU.

The net effect of this will be only a slight fall in ARPU levels over the next five years," Gupta said.