GSM mobile subscription, which has been going the roof for the past 4 years, is showing signs of a slowdown.

For the first time since September 2009, GSM operators have added less than 10 million subscribers in a month.

In May, 11 GSM operators together added 9.5 million new users taking the total subscriber base to over 590 million. While this addition in number is still good compared to other global markets, it is much lower than what the operators were adding over the past few months.

According to the Cellular Operator's Association of India (COAI) the dip in numbers is due to lack of competition among operators on tariffs, which has cut down the number of dual SIM users.

“In the past few months operators have not offered any new deals on tariffs. This has in-effect brought down the number of subscribers who would take multiple connections. Earlier subscribers had the incentive to take one or more connections to take advantage of a better tariff plan on another operator's network,” Mr Rajan S. Mathews, Director-General, COAI, told Business Line .

Mr Mathews said that stiff subscriber verification norms are also having an impact on mobile uptake in rural areas.

“The growth in mobile subscription has been coming from rural areas but as operators move deeper into the hinterlands issues like subscriber verification and high cost of interconnection is coming in the way,” he added.

Market watchers said that the introduction of Mobile Number Portability may have also put breaks on the dual SIM market.

So is this the beginning of slowdown of India's telecom growth story?

According to the COAI, the demand for mobile is still there so the net additions will bounce back in the next few months but not to the extent that the industry has seen in the beginning of this year.

“We were adding close to 15-16 million subscribers a month so that may not happen but we expect the number to stabilise around 11-12 million additions for some time,” Mr Mathews said.

Related Topics