As Vodafone loses 6.1 lakh subscribers, growth of small telcos jumps

A lot has been said about service standards and network coverage of small telecom companies. So why then are the smaller telcos growing and why are they growing much faster than the big daddies in telecom? It seems their USP is cheaper tariffs and this is helping people in the hinterland and smaller towns remain connected.

Data released by the the Cellular Operators Association of India (COAI) shows that in July alone, the three small telcos - Aircel, Uninor and Videocon - added 15.7 lakh new subscribers, which is more than three times of what market leader Airtel managed at 4.8 lakhs. The surprising part is that July saw Vodafone lose an eye-popping 6.1 lakh subscribers, the only private telco to actually lose subscribers since MTNL was the only other one in this category.

Vodafone was apparently rooting out inactive subscribers which is the only probable reason why its subscriber base actually fell last month when everyone else barring MTNL was increasing their reach and the overall market was growing.

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[caption id=“attachment_1050355” align=“alignleft” width=“380”]  Vodafone was apparently rooting out inactive subscribers. Reuters[/caption]

As of July, 19.14 crore Indians use an Airtel connection, 15.44 crore use a Vodafone connection while 12.53 crore use Idea’s network. More than 10 crore Indians still rely on either BSNL or MTNL for their mobile connectivity - which is lower than either of the three biggest private telcos.

Aircel, Uninor, Videcon and Loop Mobile together account for a little over 10 crore mobile connections. So in effect, the four small players are still no match for any of the three large telcos taken individually. So why the unprecedented growth then?

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Chief Marketing Officer of Uninor, Rajeev Sethi, says “In a market where tariffs are increasingly volatile and subscribers are confused on who offers best value, Uninor has remained consistent with its Sabse Sasta promise. This means that no matter where industry tariffs go or how they move, Uninor will always be the cheapest - often upto 60 percent more affordable. In the mass market, this straightforward no-confusion position works extremely well”.

This sentiment is echoed by Videocon Telecom’s CEO Arvind Bali who says Videocon focuses extensively on managing costs and is able to pass on the benefits by offering 15-20 percent cheaper tariffs to consumers. It now has licenses in seven circles of which four are fully operational.

So consumers in India want value for money, which the smaller telcos are obviously able to offer in smaller towns and rural areas.

The COAI data shows that the market is now growing in a healthy manner, with total number of subscribers at 67.26 crore; in July almost 15 lakh new subscribers were added.