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The Indian consumer fixed services market is on pace to reach Rs 240 billion in 2012, a 2 percent increase from 2011 revenue of Rs 235 billion, according to Gartner. The consumer fixed services market includes consumer voice service revenue, consumer broadband access revenue and consumer Internet access revenue.

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Consumer fixed voice revenue is forecast to reach Rs 148 billion in 2012, a 7 percent decline from 2011. From 2012 through 2016, voice revenue will further decline by 25 percent. “Voice traffic continues to shift to mobile,” says Neha Gupta, senior research analyst at Gartner. 


“Consumer voice lines have decreased and so have usage levels. Prices remain more or less stable. In the future, decreased ARPU levels, coupled with a low user base, will lead to decreased voice revenue. Consumers will continue to abandon their fixed lines even as service providers increasingly bundle broadband and IPTV to retain their fixed line customers.”

The Indian consumer fixed line services market will see growth from broadband and Internet access sectors, which will collectively grow to Rs. 92 billion in 2012. In 2012, household broadband penetration will cross 6 percent. The broadband market continues to be dominated by DSL, which accounted for 87 percent of all the broadband connections in 2011, and is expected to grow 18 percent 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. Fixed line broadband penetration will stay in single digits till 2016,” says Gupta.


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. Fixed broadband prices are expected to decrease as service providers attempt to attract consumers in the rural areas. However, higher usage levels will offset any fall in 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. While broadband has taken over dial-up as the primary access technology, it will continue to be widely available outside the major metropolitan areas. Dial-up accounted for almost 42 percent of total Internet accounts at the end of 2011.


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