Today I got my landline connection bill and stunned to see excess bill amount charged to compared to what I paid in past. After analyzing the bill I learned that there are many calls with duration of less then 10 seconds but charged as one call pulse. I use my mobile connection which has per second billing which reduces my bill drastically. So learning from this instance, I am writing this post. In India we have two government PSU telecom players BSNL & MTNL holding 85% of market share of landline services with subscriber base of 30 million. However, they are seriously registering huge landline surrenders mainly due to rapid penetration of mobile connections and lack of innovative tariffs. Private operators offering innovative tariffs like per second charging, dynamic pricing, pay per site and various customized packs are quite successful in luring customers to choose mobile services.

Few reasons for landline surrenders

No mobility and positioned as outdated technology

Requirement of mobility has increased and customers want everything to happen on their palms. Mobile services proved its capability of delivering such ideal requirements and people expect more. However, if we see Landline services, except Broadband ADSL2+ as a value addition, it has nothing special.

Lack of innovative tariffs compared to mobile services market

People are still paying based on traditionally designed Landline tariffs. Some monthly commitment and you will get some free calls; this is how tariffs are positioned in the market. I don’t know if telecom operator can provide per second kind of tariff due to equipment feasibility. But I am sure if BSNL and MTNL start offering per second billing on landline it will really slowdown the surrenders. MTNL has recently started offering Add-on packs for landline where customers can take a pack for additional free calls.

Strong support of ADSL Broadband may blur after 3G comes to market

During year 2004, BSNL and MTNL introduced ADSL2+ Broadband services on landline. ADSL Broadband gave good support to declining landline business and these operators leveraged landline last mile. However, as we saw private operators have bet huge amount for acquisition of 3G and BWA spectrums, the whole market scenario will change once they launch their 3G based services. BSNL and MTNL have already started 3G and getting good response. Live Mobile TV, Video calls, high speed internet services and enormous availability of mobile apps running on smartphones, all these value added services will definitely change the direction of market. Serious concerns for Landline, as Broadband ADSL is also facing stiff competition from 3G, HSDPA, EVDO internet data cards as these offers mobility as additional feature.