There were only 1.7 million new GSM users added on mobile operators’ network in July. This is the lowest net addition since 2005.

“This is a cause of worry as clearly the market has lost the growth momentum,” said Rajan Mathews, Director-General, Cellular Operators Association of India. Mobile operators have been reporting declining net additions over the past six months.

There are multiple reasons why the numbers are coming down. Most new operators have stopped services in some of the circles owing to the uncertainty around their licences. For instance, Uninor lost over a million subscribers on its network after it closed operations in four circles.

Prior to February 2011, the industry’s net subscriber addition per month was around 20 million. In June 2012, this came down to about 5 million. Deactivation of inactive subscribers is also another major reason.

Also, spectrum allocation rules have changed from subscriber-linked criteria to auction. Earlier, operators could get more spectrum if they amassed more subscribers. But now with auction being the preferred allocation method, there is no incentive for operators to bear the cost of offering services to someone who does not even pay Rs 10 a month.

Data usage growing

The good news is that data usage is growing. A report by Nokia Siemens Networks has revealed a 54 per cent increase in mobile data traffic in India between December 2011 and June 2012.

The report further reveals that data traffic generated by 3G services has increased by 78 per cent while that of 2G services has increased by 47 per cent during the same period.

While 2G users across the country are consuming three-quarters of the total mobile data traffic, on average, 3G users consume four times more data than 2G users. At this pace, Nokia Siemens Networks expects India’s mobile data consumption to double by June 2013.

> thomas.thomas@thehindu.co.in

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