Although the official data isn?t out yet, the subscriber base of top GSM telcos including Bharti Airtel, Vodafone and Idea Cellular is understood to have fallen in August for the first time in a decade. Last month, the total mobile subscriber base had slipped to 914 million from 934 million in June, though none of the larger players lost customers. The fall is being driven by large-scale disconnections by a few operators, including Reliance Communications, looking to weed out unviable subscribers. Over the past couple of years, the focus in the industry has gradually been shifting to revenue share, with telcos letting go of subscribers squatting on free minutes earned from a life-time scheme. This is necessary given how competitive the sector has become; operators are struggling to hang on to their margins.
In May last year, GSM operators, who form the majority in India, added under 10 million users, a good 25% below the prevailing average. Since then, as a result of the continuous clean-up, the share of active users, as a percentage of the total subscriber base, has moved up from about 70% to a more healthy 76.42%. Also, the criteria for allocating spectrum has changed; earlier it was linked to the subscriber base and so there was a motive in adding customers whereas now telcos need to bid at auctions. Also, with there being fewer numbers available for use, operators don?t think twice before letting go of an inactive user. Indeed, given the manner in which the regulatory environment is shaping up, the sector is clearly not for the lily-livered. Several of the newer operators, although they were able to buy spectrum relatively cheap, have been unable to capitalise on it, as their subscriber and P&L numbers show. The consumer continues to benefit from the cut-throat competition; mobile tariffs in India remain among the lowest in the world.
