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BPL's declining fortunes amidst the Hutch battle

BPL Mobile's spokesperson claims that reduction in subscriber base was mainly due to the Department of Telecommunication's directive, reports Lalatendu Mishra.

india Updated: Jan 15, 2007 20:14 IST
Lalatendu Mishra
Lalatendu Mishra

The first casualty in the dogfight over Hutchison Essar may well turn out to be BPL Mobile, which is drifting into oblivion amidst the ongoing legal wrangling between the Essar group and Hutchison.

BPL Mobile pioneered mobile telephony in Mumbai in 1994. But the Mumbai circle, which became a bone of contention after regulatory roadblocks aborted an attempted acquisition by Hutchison Essar last year, is rapidly losing way in Mumbai.

Subscribers have been quitting in droves. Between July and November 2006, BPL lost 2.32 lakh customers, according to the latest subscriber figures provided by the Cellular Operators' Association of India (COAI).

BPL's subscriber base feels from 13.34 lakh in January 2006 to 10.52 lakh by November, 30 2006.

Essar, which owns the entire stake in BPL's Mumbai circle, had called off the proposed merger of BPL Mumbai circle with Hutchison Essar, citing non-receipt of regulatory approvals on August 1, 2006.

Ten days later, the Bombay high court had asked both the parties to approach an arbitration council to settle the row.

BPL's loss has been its rivals' gain. Hutchison Essar, which had 18.38 lakh subscribers in January, 2006, improved its position to 23.51 lakh on November 30, 2006, while Bharti's base rose from 11.35 lakh customers to 16.54 lakh during the same period.

State-owned MTNL, which provided services to 8.8 lakh customers in June, increased its base to 12.43 lakh by November 2006. It seems that customers are shifting either due to connectivity problems or change in corporate accounts.

"I have been facing lot of network problem at my office. I am still continuing with the BPL Mobile as I don't want to change my number for fear of losing my contacts," says KP Nene, a BPL customer for the last 10 years.

BPL Mobile's spokesperson claimed that reduction in subscriber base was mainly due to the Department of Telecommunication's directive asking service providers to cut the connection of subscribers who failed to provide customer verification documents.

"We have started new initiatives to increase the subscriber base. There have been over 10,000 increases in subscriber base between August and November," the official claimed.

BPL is projecting a base of 13 lakh subscribers by the end of the current fiscal, driven largely by new additions to its pre-paid customer base, when it has been slashing prices.

BPL became the largest operator in Mumbai in 1997 with a subscriber base of 113593 in 1999 as against 93456 customers of Hutch. In 2003, Hutch overtook BPL.

Though BPL was second till 2005, the emergence of Bharti and Reliance has led to a decline in its fortunes.

Analysts are, however, bullish on BPL's future. "BPL Mobile may be failing in the number game. But ultimately, the investors will unlock their investment as the market is lucrative," said Priyanko Panja, vice president Research, Edelweiss Capital.

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First Published: Jan 15, 2007 20:14 IST