Telecom Industry to Lose Up to 60 Million Subscribers in Next Six Months: Experts

The past few months have been full of turmoil for the telecom industry. Plagued by falling revenues and declining tariff plans, there has been an overall rise in the number of subscribers. However, things might take a turn if we are to believe this new report. Many industry officials have predicted that in the coming six months, the telecom sector might lose up to 60 million subscribers as these customers will dispose of their multiple SIMs in exchange for one owing to similarly priced tariff plans across all telcos.

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Unique Subscribers to Matter More Now

As per the concerned ET report, analysts say that the new introduction of minimum recharges by Vodafone Idea and Bharti Airtel has set a floor for pricing, thus bringing these telcos at par with Reliance Jio. Further, this move is expected to force the customers to choose one among the three leading to people disposing of their SIMs by a huge number.

It’s worth noting that at the end of August, the telecom industry stood at 1.2 billion subscribers out of which 730-750 million subscribers are unique subscribers or single SIM holders, while the rest hold two SIMs. In the next six months, we can definitely expect to see a drop in this count. Although there will be an addition of unique subscribers alongside, a reduction in subscriber count is quite inevitable.

Similar Pricing Becomes Prime Reason for Disposing SIMs

Director General of Cellular Operators Association of India (COAI), Rajan Matthews also furnished his thoughts on this report saying, “There will be a 25-30 million drop in subscriber numbers in the next six months which in this case translates to the number of connections being given up. This is because of the SIM consolidation that is taking place.” An anonymous analyst also gave a tip saying that there could be a 15-20% cut with customers dropping 45-60 million connections.

Hemant Joshi, partner, technology, media and telecommunications, at Deloitte India also chipped in his statement contributing to the reason saying that subscribers used two SIMs before to take advantage of different plans and tariffs in different geographies. However, both price and service quality are same now, therefore, eliminating the need for multiple SIMs. Joshi further added that the transition to single SIM cards will be a beneficial one for the industry as now telcos will have transparent data about penetration based on which telcos will be able to devise their strategies.

Results to Effect ARPU Positively

To recall, very recently, Bharti Airtel and Vodafone Idea have introduced minimum recharge packs of Rs 35, Rs 65 and Rs 95 with 28-days validity to ensure that the customer gets billed. The idea was to eliminate the non-paying cycle, where customers remain on the network with free incoming calls despite not paying. However, now the outgoing calls will be blocked within 30 days and incoming calls will be barred in 45 days of non-payment thus forcing hands of the subscribers to pay for a minimum recharge. This minimum recharge compared to the Rs 49 plan by Reliance Jio for JioPhone users. The move is expected to boost the Average Revenue Per User (ARPU) for companies which remains a crucial industry parameter.

Former chief executive of Bharti Airtel, Sanjay Kapoor also said that now telcos will have to look out for unique subscribers, which will become an important metric in the coming months. He also added that expansion of 4G would put an end to SIM multiplicity. Current chief executive of Bharti Airtel, Gopal Vittal also said that he expects the prepaid ARPU to improve by fiscal third quarter thus reducing company’s selling, general & administrative (SG&A) expenses.

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38 Comments on "Telecom Industry to Lose Up to 60 Million Subscribers in Next Six Months: Experts"

 

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honey
November 23, 2018 9:58 am 9:58 AM

BSNL and mtnl will follow same as airtel vodafooe idea

Sumanth
November 25, 2018 11:37 am 11:37 AM

BSNL has been following this for a long time already. The private companies started doing it now.

Person.A
November 23, 2018 1:31 pm 1:31 PM

In my opinion they would wait till IUC charges drop to zero. In the meantime, they wouldn’t want to mess with the influx of port-in subscribers.

Ram
November 23, 2018 9:00 am 9:00 AM

Want to port Airtel to BSNL for my 2nd sim. How much it will cost? And what validity packs available in Odisha.

SonuSB
November 24, 2018 7:35 am 7:35 AM

They charge only Rs.19 for MNP. And check bsnl website for regional validity tarrif or try to visit BSNL office foe getting better information.

SC (KPA, Kolkata circle)
November 22, 2018 11:23 pm 11:23 PM
Ob course. Now AVOID is practicing wrong thing. In early years they looted through their 999 life time sim validity which suddenly became only for few days. Both airtel and Vo-idea have not such good network service at present. In airtel voice suddenly vanishes on call and sometimes makes huge noise. Their 2g & 4g are not accessible in indoors. Both Jio and AVOID plans are almost same and when everyone have to maintain mandatory recharge, then most of the users may not get interest in recharging in both connections. Personally I have given port in request to bsnl from… Read more »
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