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HindustanTimes Thu,28 Aug 2014

Mobile subscriber base plunges by 70 mn in 6 months

Manoj Gairola, Hindustan Times  New Delhi, February 18, 2013
First Published: 21:49 IST(18/2/2013) | Last Updated: 21:51 IST(18/2/2013)

India’s mobile subscriber base has declined by about 70 million users in the last six months. The total number of cellphone users has fallen from 934 million in June to 864 million in December.

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Telecom operators, under pressure to boost profits, have been disconnecting inactive mobile users, which is a key reason for the plunge.

Experts believe that this process will continue for another six months, and will bring the userbase further down.

There are still close to 150 million inactive users in the networks, according to the telecom regulatory authority of India (TRAI).

Total wireless subscriber base decreased from 890.60 million in November to  864.72 million at the end of December, or 2.91%.

“This decline is mainly due to large scale disconnections of inactive SIMs by some of the service providers,” a TRAI official said.

About four years back, the amount of spectrum allotted was linked to the number of subscribers. The licences used to come with a start up spectrum of 4.4 MHz.

If the operators crossed a certain number of subscribers, depending on the category of circles, the company was entitled for additional spectrum.

“In order to get more spectrum, the operators continued to retain subscribers even if they did not make or receive calls," said BK Syngal, former chairman and managing director (CMD) of the erstwhile Videsh Sanchar Nigam Ltd.

Under the new policy, operators can get spectrum only after paying market price for it. It is being allotted through auction process.

“Hence, the operators have now started disconnecting inactive subscribers.”

Earlier, number of subscribers was an important criteria for valuation of a service company.

"As networks grew big, revenue became the main criteria for valuation," said Syngal. This is also an important reason for disconnecting mobile subscribers.


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