Telephone subscriber base declined in the country for the first time. According to data released by the Telecom Regulatory Authority of India total subscriber base fell by 20.71 million to 944.81 million in July from 965.52 million a month ago.

The biggest loss in user base came from Reliance Communications that lost 20.48 million users, followed by Tata Teleservices, Uninor, Videocon, Loop and MTNL.

“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.

Reasons for decline

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. The new norm governing numbering resources is another reason. The telecom department now allocates numbers based on active users.

RCom for instance has had to deactivate millions of subscribers to free up numbering resources. Most other operators are also now ejecting subscribers who do not use their phone over a 60 day period.

>Thomas.thomas@thehindu.co.in

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