India’s mobile subscriber base shrunk by 21.86 million users in March, shows data made public by the Telecom Regulatory Authority of India (Trai) on Tuesday
This has been the trend for more than a year. Mint decodes the reasons and what this means for telecom firms.
NEW DELHI :
1) Is the subscriber base falling?
The country’s mobile user base has shown a declining trend from 1.18 billion at the end of March 2018 to 1.16 billion at the end of March this year. However, the decline has not been consistent on a month-on-month (m-o-m) basis. Users in March 2019 fell by 21.86 million m-o-m, but there had been a rise of 1.7 million in the total number of users in February, mainly due to subscriber additions by Reliance Jio and BSNL, which made up for the decline in Airtel and Vodafone Idea’s customer base in that month. Vodafone Idea and Airtel count only paying customers. Trai counts each SIM as a user and includes inactive subscribers.
Bharti Airtel and Vodafone Idea have been losing customers in the last seven months, while Reliance Jio has seen an increase in the number of subscribers. Airtel did not lose subscribers in the first eight months of 2018. But its user base has declined every month since September 2018, except in November and January when it added users. Vodafone and Idea merged in August. The very next month, the merged entity lost 6.68 million users. The decline went on, with the entity losing users every month since. Jio has bucked the trend, with its user base rising from 186.56 million in March 2018 to 306.72 million in March 2019.
3) What are the reasons for the decline in user base?
Airtel and Vodafone Idea might have lost users to Jio as it offers lower tariffs. Airtel and Vodafone Idea also launched minimum recharge plans to reduce the number of low-paying, inactive users.
4) Should operators be worried about the falling subscriber base?
This should not worry operators. Airtel and Vodafone Idea have both realized that in a low-tariff market and with debt on their books, they need to shift focus from growing their user base to raising revenue and protecting their bottom lines. They are trying to drive more data usage per SIM. Upgrading feature phone users to data subscribers is seen as a good move, as the number of wireless internet users rose from 409 million in Q1FY18 to nearly 491 million in Q1FY19.
5) Will the trend of falling user base continue?
Vodafone Idea’s customer base fell by 35.1 million in the third quarter to 387.2 million and further by 53.2 million to 334 million in the fourth quarter. The shrinking subscriber base led to an improvement in average revenue per user (Arpu) from ₹88 in Q2 and ₹89 in Q3 to ₹104 in Q4. Airtel showed a similar trend. Jio’s Arpu for the fourth quarter is still higher at ₹126.20. Vodafone Idea chief executive officer Balesh Sharma said he expected the firm to complete the exercise of weeding out low-paying users by the end of May.
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