Fifth Take On Indian Telecom Industry Current Scenarios & The Falling ARPU

By November 12th, 2009 AT 11:57 AM

Fifth Take On Indian Telecom Industry Current scenarios & The falling ARPUTelecom talks last article THE PRICE WAR on Indian Telecom market scenarios told you about the other side and impacts of the price war

And now what you see all around, the lowest tariff plans ever-ever witnessed by Indian telecom Industry almost every operator has now started counting per sec or a 50p/ min flat ,See the happy customers they don’t seems to have much grievances else to else QOS is concerned, Yes!!!

Now the only strong factor that’s deviating an ideal customer is ‘Quality of service’ some operators still worried about the MNP and its aftermaths in this quite unpredictable Indian market. Ideally no matter what the situation is but QOS still hold the sturdy edge if compared at par with other avenues and as the way MNP is approaching the operators with good QOS with be entitling themselves to hold the Helm in the market and that’s for sure.

Also new GSM subs addin for the month of oct have been released and this time its Vodafone to add highest number of new subscribers viz 2.98 million subscribers taking its total base to 85.82 million. Bharti Airtel was second with net addition of 2.7 million and subscriber base of 113.21 million. And again Aircel recorded the highest growth rate in new subs addin at 7.84% by adding 2 million subscribers with net total of 27.74 million

Another wave which in heat for Indian telecom industry was the government’s decision to eliminate prepaid subscribers in J & K region and thus leading to decrease the  operator’s base to around 10 % from the existing, huge a collapse for operators.

Another botheration coming to Indian operators is falling ARPU rather it’s not only the constraint in Indian market but if we take Asia – pacific as a whole ARPU is falling in all Asia pacific countries, down the line when Telecom Talk tracked to figure out amongst the root causes for falling ARPU the thing which contributed the most was “New SIM connections available previously with life time validity”  that was the time of on going price war when every newbie and then incumbent operator started giving new connection at a marginal cost of around Rs.50 or so and that too with lifetime validity and in this phase customers bought many new connection just to enjoy the low tariff plans given by other operators because buying a new SIM customer got to pay less price and also such schemes were not available with their current operators, many other examples came like “People buying additional new Prepaid SIM’s from one operator or another for less tariff and kept their Postpaid no as it is because that was being used from past many years”  But as if now when every operator is counting per second this situation has become bit steady as almost same tariff plans are with every operators.

Now the result of above mentioned new SIM’s purchased with lifetime validity  resulted in increasing new connections with the users, but there contribution in terms or revenue paid remained the same for eg: if an ideal user was contributing Rs. 600 per month with one operator now he was contributing the same Rs. 600 but either with 2 or 3 operators and also those SIM which were partially-active kept residing with customer but not contributing in operators revenue and that too with life time validity thus no chance of getting it expired in next 3-4 years also, and if you remember the days when falling ARPU was not as much a constraint as now, every new connection was costing about Rs.300-500 and that too use to expire within 3months from the day it was left inactive. Thus buying of new connection in recent phases a customer resulted in increase of divisors (new connections) but its dividend (Revenue paid) remained almost the same and in this scenario falling of ARPU was obvious.

Monotonous!!!!!!! Ok now if we shift our drift then we realize that in the foray of price war 3G again was not the talk of the town for so many days as extending the dates after dates in India its story has almost become the same of “The Lion and shepherd” that we used u study in childhood days now Indian customers are also not set to believe that will the auction happen on this next proposed date or not. But to tell all of our readers if now the auction happens on the proposed date too than also it will take another an year or so when it will be LIVE for an ideal customer to use it because the Infra is quite high and 3G require different essentials than 2G which will again take time to roll out so be patient,  but mostly operators are eying on 3G and 3G-VAS as par as increase in ARPU is concerned.

All our Telecom talk readers are welcome to share their views on the above and foray to healthy discussions.

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Amit KesariPradipswati pandeyTUSHAR SHARMAAvik Recent comment authors
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Amit Kesari
Amit Kesari

The writer is claiming vodafone as highest in subscriber figure in this month which is wrong ,he/she must check it from AUSPI website. Tata teleservices because of docomo has made the highest subscriber addition of 4 million subscribers.


…… the author has rightly pointed out here. 3G in itself will not be able to bring in a good turn around in terms of revenue. 3G along with VAS/Multimedia only can increase revenue/ARPU. Applications that are based on Location are already available, but lot more innovation is needed in terms of content/sevices to lure the market.

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