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Indian telephone subscriber base declined, should we worry?

|September 13 2012 |Industry News, TRAI


This is the first time Indian telecom industry has seen a decline in its total subscriber base. As per latest TRAI Telecom subscription data, the total number of telephone subscribers in India as on 31st July has been dropped to 944.81 million from 965.2 million last month. This marks a 2.14% decline over a month.

Some industry experts are worried a lot about it and marking it as an uncertainty of Indian telecom market. A step ahead, they have started suggesting government to think about some concrete policies.

However, my opinion is different. I see no reason to worry since this decline has no impact on revenue. If you see the chart, around 20.5 million (more then 99%) of the decline is contributed by Reliance only. Tata Teleservices, with 2.4 million decline in subscribers is the second biggest contributor.

trai

Both Reliance and Tata are on a spree to deactivate the inactive numbers from last few months. While Tata Teleservices is continuously reporting a decline from last 6-7 months, Reliance has reported all deactivation in a single month. This resulted in to a massive decline impacting the overall average of the Indian telecom industry.

I take deactivation as a positive move by Telecom companies as it releases the unused numbers. These released numbers can be reissued to public and we can avoid exhausting the existing series of mobile numbers.

“With an objective to release the substantial blocked resources of number series and in context of DoT’s stringent guidelines on issuance of fresh numbers, RCom has decided to deactivate the inactive prepaid subscribers who have not had any usage in the last 60 days” an RCom personnel says “This is in line with the industry practice and has no impact on customer experience or (the company's) revenues”.

Third biggest contributor to this decline is Uninor whose existence in Indian market itself is on stake.

Now that we know the decline is inorganic, we should not worry. Rather other telecom companies should take the inactive numbers seriously and should think about reusing the numbers. Else, be ready to welcome the 11 digit mobile numbers very soon.


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