The first-ever decline in Indias monthly telecom subscriber base will ring the alarm bells for the industry. The drop comes just two months ahead of an expected bruising telecom auction for 2G spectrum. In a way it seems to bear out an expectation that the sector has got hit at its most vulnerable point the growth in top line. However,whether that indeed is the case will have to wait for the numbers for at least one more month to come in. For July,Telecom Regulatory Authority of India (Trai) data shows over 99 per cent of the fall has been contributed by one wireless operator,which decided to deactivate inactive subscribers.
Trai data shows overall telecom user base of the country dropped by 20.71 million subscribers sequentially. Of the total fall,20.61 million came from wireless subscriber with Reliance Communication being the largest contributor to the fall with a loss of 20.48 million users. The reason for the fall in Reliances subscriber base has been because it decided to deactivate the inactive prepaid subscribers,who have not had any usage in the last 60 day. These numbers account for 13.2 per cent of its total subscriber base. But after Reliance Communications,which is the third largest company in terms of telecom subscribers,lost 13.2 per cent due to its decision to deactivate inactive consumer,will other companies dare to tread this path in an industry that churns around 16 per cent of its consumers every month?
mihir.mishra@expressindia.com
