Telcos lose 9m subscribers in Nov, user base falls to 664m

Tags: News

Airtel sees maximum exit of GSM customers, Vodafone too suffers

Nine telecom service providers on GSM telephony have lost over nine million subscribers last month.

Impending license cancellations on January 18 next year and removing inactive subscribers are likely to have caused the massive reduction in customers base.

As per data released by GSM industry association cellular operators association of India (Coai) on Tuesday GSM subscribers base now stands at 663.78 million as against 672.8 million a month ago.

All operators including industry bellwethers Bharti Airtel and Vodafone to minnows like Loop Telecom and Videocon reported fall in number of subscribers.

Bharti Airtel continued to be the market leader even after it lost 2.8 million subscribers and reported negative growth of 1.5 per cent. It accounts for 27.66 per cent market share.

In the same time, Vodfone lost 2.3 million subscribers i.e. 1.5 percent while Videocon lost 8.65 per cent (400,000 subscribers) in the same month.

Telecom operators have been culling or deleting subscribers who have been inactive for over 60 days from their books. This practice allows telecom operators to reuse numbers that are in short supply.

An industry official, on condition of anonymity, said that reduction in subscriber figures could also be because of people throwing away extra SIM cards. “In markets where there is hyper-competition, a person owns more than one SIM on average to take advantage of offers from competing players. With a number of telecom operators winding down their operations or withdrawing offers, people are also disconnecting their old numbers,” he said. The GSM Association (GSMA) says that the average Indian owns 2.2 SIMs against the world average of 1.5.

The official quoted above also said that culling inactive subscribers makes operations look leaner and pushes up average revenue per user (Arpu) figures. This might prove helpful if companies position themselves for a potential merger or acquisition. Industry majors like Bharti Airtel have said that a round of consolidation in the industry is imminent. Industry regulator Telecom Regulatory Authority of India (Trai) is working on amending mergers and acquisition norms.

Director general of COAI, Rajan Mathews cited a slowing economy, stringent customer acquisition norms that caused delays in activating new subscribers and impending cancellation of licenses as reasons for the decline in subscribers base.

Ashok Sud, secretary general of rival body association of unified service providers of India (AUSPI) added telecom operators’ clamping down on the retail trade due to several reasons.

Of the GSM operators, only Uninor and Videocon would lose licenses because of the Supreme Court order. Even if it is assumed that all customers who ported out from these two operators were because of impending license cancellation, it is still less than ten percent of the total reduction. That makes the above reasons unlikely candidates for having had played much of a role.

Uninor, whose licenses were among those cancelled by the Supreme Court in February this year, can operate those licenses until January 18, 2013. On Monday, it said that it would be withdrawing from Kolkata and West Bengal circles and had asked its customers to port to other operators by that date.

sriramshankar@mydigitalfc.com

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