As if regulatory upheavals were not enough, telecom operators are also facing declining subscriber numbers since the last three months.
According to Cellular Operators Association of India (COAI) data, GSM operators lost 9.38 million subscribers in November, the highest decline in three months.
Experts said coming a week after the regulator announced a 0.26% fall in subscriber additions in October to 904.23 million, as compared to 906.62 million in September, this is definitely a cause of concern.
While weeding out inactive subscribers due to stricter norms has been blamed for drop in subscriber numbers by the top three telecom operators, experts said a huge in rise in mobile number portability (MNP) numbers in November shows that exits of new telcos are also hurting.
As per regulator Trai, MNP requests rose to 75.14 million as of October from 69.78 million in September and with nation-wide free roaming coming into effect from February, MNP figures would only rise, they said.
Rohit Chordia and Shyam M of Kotak Institutional Equities, in a report last week, said,
“Cumulative net gains at end-October 2012 stood at 4.3 million subscribers for Bharti, and just under 4 million for both Vodafone and Idea. RCom lost a cumulative 4.8 million (3 million GSM and rest CDMA) users, while TTSL has lost 2.2 million (0.8 million GSM and rest CDMA). We believe most of the vintage mid/high end CDMA subscribers were lost through MNP.”
There were no bidders in the recent CDMA auctions and TTSL has decided to shut CDMA operations in the three circles where it lost its spectrum.
Ankita Somani of Angel Broking said, “There has been a drop even in the active subscriber base. The drop may be due to new players logging out of the country or in certain circles. By December-end, we expect to see more MNP additions to incumbents due to more players shutting shop in certain circles.”
“Tariff hikes may help in increasing subscriber value, but tariffs also cannot be increased beyond a point, due to elasticity. Therefore, the only growth will be from data revenues from existing subscribers, as voice additions continue to plunge,” she said.