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The Average Revenue Per User (ARPU) for telecom companies has started moving up for the first time in many years.
According to the Telecom Regulatory Authority of India, operators got Rs 100 a month from each user on an average during the September- December 2011 quarter compared with Rs 98 in the previous quarter.
Though the increase is marginal, this is good news for telecom companies that have been dealing with declining revenues for the past two years.
Key factor
ARPU is one of the key factors used to determine the health of the industry. This number has been constantly declining over the past five years to fall below the Rs 100-mark last year.
Mr Mohammad Chowdhury, Leader Telecom, PwC India, said, “It is encouraging to see ARPU going up for cellular operators, by almost 3 per cent for GSM service providers. Since minutes of use have remained stable, this reflects a slight uptick in average revenue per minute, probably a result of the tariff increases seen in the market some two quarters ago.”
“This is encouraging since it reflects increased stability in tariffs at a time when operators have struggled to maintain profitability,” he said.
Mobile companies had increased tariffs by 25 per cent in a bid to improve its margins. The industry had got itself embroiled in a financial mess after new players dropped tariffs to one paise a second in 2008. Although incumbent players followed suit initially, they increased the tariffs last year.
As a result, ARPU for GSM service increased by 2.93 per cent, from Rs 93 in September to Rs 96 in December. Monthly ARPU for CDMA – full mobility service increased by 4.09 per cent, from Rs 71 to Rs 73 in QE Dec. ARPU for CDMA has increased by 7.51 per cent on Y-O-Y basis.
High speed net access
This is because of growing data consumption on CDMA networks. Mobile companies such as Sistema Shyam, Tata DoCoMo and Reliance Communications are increasingly using their CDMA network to offer high speed Internet access.
Sistema Shyam, for instance, said it blended average revenue per user rose by 9 per cent to Rs 84 in December. It now earns over 33 per cent of total revenue from data related income.
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