New subscribers: Big three -Voda, Idea and Bharti- remain favourites

New Delhi: An overwhelming number of new subscribers chose one of the big three mobile service providers in October, when the industry managed a modest month on month increase of just 0.52% in total subscriber addition. More than 3.5 million of the 4.7 million Indians who took a new mobile connection in October chose either Bharti, Vodafone or Idea. Does this mean these three incumbents are the most trusted mobile networks of the 13 service providers operating in India? The largest number of new subscribers chose market leader Bharti (close to 1.5 million) while a little over a million each chose Vodafone and Idea.

According to data released by TRAI this afternoon, another interesting fact in October was Reliance Communications managing to add a modest 4.5 lakh new subscribers. Just a month before, the company had deactivated an eye popping 10,493,482 subscribers in a single month and thereby taken down the overall industry subscriber growth numbers. In September, RCom wa cleaning up non-active subscribers but still managed to add some new one a month later.

Also in October this year, 2.3 million Indians wanted to move away from their existing service provider while retaining their mobile number. So, as of October 31, requests from almost 105 million Indian mobile phone subscribers are pending for number portability.

Two telecom companies, Tata Teleservices and MTNL, continued to lose subscribers through September and October. Tata lost close to 2.5 lakh subscribers in these two months while four lakh mobile users opted out of MTNL’s mobile services during this period.Out of the total 875.48 million wireless subscribers, 744.28 million wereactive on the date of Peak VLR for the month of October 2013. This means of the total registered mobile subscribers in India, almost 85% were active.

Service provider wise, TRAI data showed Idea had the highest number of active subscribers at 97.5% followed by Vodafone (95.7%) and Bharti (95.3%).

The last major cleanup of inactive subscribers was done in the last six months of 2012 when again, led by Reliance Communications and Tata Teleservices, the industry hung up on about 43 million subscribers. A cleanup is good since it lowers costs for the telco and is another way of raising service standards for existing customers.

But why did it happen in September, in such large numbers? Well, because till 2012, the government allotted additional spectrum based on the number of subscribers added so telcos generally added subscribers at any cost, sometimes even offering free connections. Naturally, subscribers would take more than one mobile connection, use the free talk time that came with it and then discarded it. RCom had deactivated about over 30 million subscribers in the second half of 2012.

In India, active subscribers are measured by visitor location register (VLR) data. In a multi-SIM market like India, where more than 95% of all mobile subscribers use prepaid connections, if a customer stops using the SIM within two months, it means the telco has not recovered the cost of acquiring this subscriber. Therefore, cleanup helps in improving ARPUs for every telco.