India's service providers added a total of 19.06 million new mobile subscribers in the second quarter, taking the country's total telecom base to 225.21 million.

    That growth fueled strong double-digit revenue increases for five of India's private operators (financials haven't been released for state-run Bharat Sanchar Nigam Ltd. (BSNL) ), as shown below in Table 1.

    Profits soared at triple-digit rates, up 100 percent year on year at Bharti Airtel Ltd. (Mumbai: BHARTIARTL - message board), 138 percent at Reliance Communications Ltd. , and 259 percent at IDEA Cellular Ltd. (See Bharti Profits Continue to Climb, Reliance Profit Soars, and IDEA Cellular Reports Q1.)

    A recent report from Gartner Inc. projects Indian mobile revenues will climb at a compound annual growth rate of 18.4 percent to 2011, creating a $25.6 billion market. But it notes that as operators continue to expand into rural areas where the market remains untapped, they will see their monthly average revenue per user fall -- from $82.10 last year to $59.50 by 2011.

    That was borne out during the second quarter, with ARPU falling among the top operators, except for Reliance Communications, where it remained flat.

    Operators have primarily pointed to the massive increase in subscriber additions as more than offsetting the decline in revenues from individual users, but Gartner suggests that to remain successful operators will also need to take advantage of economies of scale to push up their profit margins.

    Table 2 shows that EBITDA margins are on the up, with Reliance leading the pack. It managed to increase its margin by 5 percent year on year to 42 percent, while Bharti wasn't far behind at 41.4 percent.

    One approach to cost saving that has been gaining momentum is infrastructure sharing, and several operators are separating out their mobile base station assets into separate business units. Those units will focus on handling tower sharing agreements with other operators so that they can expand their geographic network coverage without having to deploy more base stations.