Fixed line substitution

Posted on August 23, 2005  /  4 Comments

The research that is currently being written up by LIRNEasia researchers on ICT use on a shoestring is expected to shed light on fixed-mobile substitution, given the fact that India has been successful in introducing CPP for its mobiles and mobile and fixed outgoing charges have more or less converged. 

The news story that MTNL, the incumbent in Mumbai and New Delhi, has decided to deploy special teams to halt the ending of fixed subscriptions is good evidence that there is fixed-mobile substitution in India.  Caution should be exercised in generalizing from this to other countries where the conditions of CPP and price convergence have not been satisfied.


  1. More evidence of continuing fixed-mobile substitution in India:

    Fixed phones in fossil threat

    Calcutta, Dec. 24: Fixed phone users appear to be a dwindling race going by BSNL sources.

    Nearly 90,000 BSNL subscribers have surrendered their connections in Calcutta between April and November.

    “Over three years, about 100,000 subscribers have surrendered their phones every year. This time, the number is even bigger,” a senior CalTel official said.

    “This is a worldwide phenomenon, the growth is in the mobile phone sector,” BSNL chairman and managing director A.K. Sinha said.

    He was in the city today to inaugurate an information and media centre at Telephone Bhavan and a customer service centre at Alipore.

    Sinha said across India, 25 lakh BSNL subscribers have surrendered their fixed phones till November.

    Revenue earned from fixed lines is also on the decline, but Sinha said the loss would be compensated by growth in mobile and broadband services. Rise in connections in rural areas was also a positive.

    CalTel chief general manager S.K. Chakraborty was also optimistic about increase in the number of landline users with the demand for broadband connectivity going up.

    CalTel sources said that desperate to arrest the fall, the authorities are planning serious marketing initiatives. “Individual agents are also being appointed to sell B-phone (base or fixed phone) and broadband connections,” they said.

    Sinha said though the target was to give one lakh broadband connections in Calcutta by December 31, BSNL would be able to give half that number.

    There are 30,000 subscribers of Data One, BSNL’s broadband service, in the city and about 20,000 are on the waiting list.

    “We are trying to popularise high-speed Internet connectivity,” Sinha said, adding in the same breath that he had received several complaints from subscribers dogged by poor service and slow connectivity.

    Chakraborty said: “The problem is being sorted out.”

  2. I am currently in India and BSNL has serious service problems with ADSL. I am currently connected at a cybercafe because ADSL connection at home is dropping every few minutes or not connecting at all for a few hours. If BSNL wants to staunch the flow of customers by providing broadband services, they need to try harder.

  3. MTNL & BSNL may be fighting a losing battle in trying to woo back customers to its fixed line services. Its not as if customers are giving up on fixed lines altogether. Airtel has added 524,000 new fixed line/broadband subscribers from March 2006 to March 2007. Customers are giving up on BSNL and MTNL.

    When true 2mb/sec broadband is only a chimera (don’t believe BSNL’s adverts) how are either entity contemplating rolling out IPTV?

    Both these companies are saddled with the temperament of plodding incumbents. They should be at least partially privatized with the hope of infusing some energy, fresh ideas and more innovative business strategies…

    BSNL launches pre-paid landline to check surrender

    Kolkata, May 19 (PTI): State-owned BSNL today launched pre-paid offer on landline to check surrender of connections due to customers’ inclination towards mobile services.

    The launch of pre-paid on landline would definitely help in reducing the rate of surrender of connections by customers, Minister of State for Communications and IT Shakeel Ahmad said here.

    By the year 2010, the target for BSNL and MTNL was 500 million phone connections and nine million broadband connections, he said, adding that contrary to perception, landline phones were again coming into vogue since it was a key tool required for getting broadband connection and IPTV.

    Last year, 1.5 million BSNL landline connections were surrendered while 10.2 million mobile phones were added, Ahmad said.

    For MTNL, the number of surrender was 76,000 while 10 lakh mobile connections were added.

  4. Fixed-to-mobile substitution, increased competition are contributing to fixed-line decline in the Asia Pacific according to an Ovum study. Decline in PSTN slowed from 1.6% in 2006 compared with 1.8% in 2005 in Asia Pacific.

    In Western Europe the decline is greater at 5% during the same period.

    “”NTT had the greatest decline at 8.7%. However, SingTel had the next largest decline at only 2%, while PCCW and Telekom Malaysia increased their number of access lines,” Ovum analyst Nathan Burley said.

    Still, average PSTN revenues fell more sharply by 5% last year due to price drops, competition and falling volumes as a result of migration to mobile phone service and VoIP.”

    More here: