Home / Industry / Telecom /  Dual SIM usage is in free fall as tariffs rise

New Delhi: The usage of dual-SIMs among mobile phone users is on the decline due to rising tariffs and is expected to fall by 25% in the next three years, as per industry watchers.

Research firm CLSA pegs the number of dual-SIM users at 140 million as of FY22, which is set to fall to 105 million by FY25, as subscribers consolidate usage onto a single SIM.

“Over FY22-25, as smartphone ownership in India expands by about 50% to 700 million and we estimate fall in dual sim users to 105 million and fall in 4G feature phone users by 50 million," the research firm said in a report on the telecom sector, highlighting the trends.

Dual SIM usage, which had seen a rapid increase since 2016 when Reliance Jio launched its free voice and low-cost paid data plans, has begun to reduce as carriers have begun to raise tariffs across the board since 2019. The number of dual SIMs also saw a steep reduction after the tariff increase of 20-25% in November last year, owing largely to SIM consolidation or users discarding one of the SIMs that they do not use.

Reliance Jio, Bharti Airtel and Vodafone Idea have publicly stated that tariffs are set to see hikes in FY23 as well, in order to improve the financial health of the sector, therefore experts say that more users will drop the use of second SIMs as costs of paying two monthly rentals plans on prepaid as well as postpaid levels would hurt consumer wallets.

Experts also pointed to absence of roaming charges as well as little differentiation in quality of network being provided by carriers as additional factors against keeping two separate connections from different telcos.

“Consistent pricing across competitors and absence of national roaming charges have resulted in subscribers using a single sim. Lack of differentiation in the quality of network across regions has also diminished the need to carry multiple sims. Lastly, the gradual increase in tariffs and unlimited data bundles are also responsible for the same," said Peeyush Vaish, partner and telecom sector leader, Deloitte India.

With Jio taking pole position in the Indian telecoms market with over 415 million subscribers and Airtel taking the No 2 position with over 363 million users as of July, parity in tariffs across data have led to stabalisation in subscriber churn.

“The Indian consumers are shedding the dual SIM culture and is further expected to go down over the next three to four years," Vaish added.

Dual SIM usage, which is also characterized by owning a featurephone as well as a smartphone, is also set to fall with the expected rise in smartphone usage and transition of featurephone users to smartphones.

India’s current 4G smartphone base at 472 million has risen 3.5 times in last five years. “From here we estimate the sector smartphone user base will grow about 50% to about 700 million by FY25 led by continued feature phone to smartphone migration," CLSA added.

ABOUT THE AUTHOR

Gulveen Aulakh

Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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