A major milestone was crossed in August when the number of telephone subscribers in the country crossed the 700-million mark, data from the telecom regulator revealed on Tuesday.
While that may be cause for cheer in a country celebrating a telecom revolution, it spells more headaches for service providers that have spent billions of dollars in expanding networks and grabbing customers.
The bad news for them from the Telecom Regulatory Authority of India (TRAI) is that the average revenue per user (ARPU) for mobile subscribers, which is the key to profitability, fell more than 33 per cent for the quarter ended June to Rs. 121 per month over the same period a year ago.
Mobile subscribers account for as much as 670.6 million subscribers, as wireless networks overpower landline grids.
The ARPU data is a clear indication of the competitive pressure faced by service providers in a regime in which new players have added to the crunch.
There are about nine to ten service providers in an area competing for subscribers. This has resulted in a fall in tariffs.
TRAI said the wireless subscriber base rose 2.79 per cent from 652.42 in July, while the total telephone service subscribers in India totalled 706.37 million at the end of August against 688.38 million a month earlier.
With this, the overall teledensity (number of telephone for a population of 100 people) in India touched 59.63 per cent.
“The 700 million figure is a great achievement but we should be conscious these are subscriptions and not the number of users since many of them have multiple SIMs (numbers). A recent report has suggested that this number may be as much as 40 to 50 per cent less than the actual users,” said Mahesh Uppal, director at consulting firm ComFirst.
“ARPUs coming down is obviously reflecting the fact that new subscribers are low income subscribers who until recently could not afford phones.”