How Average Revenue Per User Strategy Could Be Lucrative For Indian Telecom Industry ?

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There is a buzz in Indian telecom industry that the telecom subscriber base declined 20.7 million in July 2012. Indeed, it’s the first time ever in Indian Telecom history and subscriber base (wireless and wireline) reached to 944.81 million till the end of July this year from 965.52 million in June of this year.

It’s true that the wireless subscriber base of the country had been augmenting with dizzying pace since the last couple of years and hit to the stonewall in June. In July, the number of wireless subscribers fell to 913.49 million from 934.09 million in June, a drop of 21.40 million.  The gradient fall occurs in the month due to brush away of whopping 20.48 million subscribers of Reliance communication, a 15.2 % of its total user base.

COAI’s director general–Rajan Matthew–said, “The DoT has asked operators to clear their database of unused numbers as there is a crunch of supply in numbers—so that is driving a lot of it. The government has also stressed and made procedures to acquire and have a cellphone number more stringent. If someone has changed address and they can’t be identified the operator has to disconnect the number for security reasons.”

At present, decreasing Average Revenue Per User (ARPU) has become major concern for telecom operators in India despite of increasing mobile subscriber base. I think, the new approach could be lucrative for telecom vendors because TRAI has taken step to focus on ARPU and not just aiming to increase subscriber base.

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In India, the main issue is confined with use of multiple SIMs by a single subscriber. At present, mobile phone users are sitting on pile of SIMs to leverage over vivid schemes, which are being provided by different operators in the market.  I have already discussed that Indian mobile users have tight budget and that’s why, they prefer to use pre-paid services. There are lots of unused numbers (provided by service providers) which create overburden on networks. I think, an intensive competition among Indian Telecom operators is somehow responsible for such insanity.

Undoubtedly, the valuation of any company is determined by the revenue generation, and focusing on ARPU could be a robust approach. If you subtly investigate the whole scenario, you will definitely find out that the increasing subscriber base every month before July was just misleading. Apparently, operators really need to focus on active mobile users rather than to focus on subscriber additions so that they could generate revenue . The new module will provide a crystal picture of telecom subscribers and telecom density of every circle.

Most important paraphernalia is here that the number of active mobile subscriber base reached to peak in the month of July this year. The number of active subscriber, customer who made at least one revenue call in the last 60 days,  base surged to 698.06 million in July, a 76.42 % of total subscriber base. I think, the new module could be expedient for the subscribers as well as operators. Of course, the number of active mobile subscribers account for ARPU rather than non-active.

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