As spectrum price rise looms large, telcos rush to burn subscription flab.

Impacted by Reliance Communications reportedly switching off around a couple of crore of its inactive subscriptions, the mobile subscriber base in India dropped by a whopping 20.61 million in July 2012 over June, as per the latest data released by Telecom Regulatory Authority of India (TRAI).

It’s not for the first time that operators have made bulk scrubbing of their inactive subscriptions, but the actions have never led to a negative growth in the numbers. One reason, of course is that disconnections of such scale by one operator at a time have not been enacted before. The other reason is that not so many operators, six in all, clocked negative subscription growth in a given month. 

The total negative subscriptions added by six operators were 24.71 million in July. Even excluding Reliance, the other five operators made up for 4.22 million negative additions.

On the other hand, a mere 4.10 million additions were effected by seven operators put together, and the situation looks even more grim if we note that most of these numbers would have come through mobile number portability (MNP) requests. It is striking that MNP request submitted in July were 4.98 million while those submitted in June were 4.16 million.

In the past, Reliance itself had disconnected 5.6 million subscriptions in April 2007 (See,

In July 2012, other than Reliance Comm, five other operators saw negative subscription growth. Tata Teleservices saw a subscription loss of 2.41 million in July, while Uninor followed with 1.08 million, Videocon 0.42 million, and MTNL and Loop 0.15 million each. Tata Tele had lost another 1.31 million in June, 0.52 million in April, 0.14 million in March, and 1.83 million in February 2012. It had lost another 4.44 million subscribers in November 2011, as per TRAI data.

Looking at November 2011 in particular, apart from Tata Tele, BSNL had lost 0.18 million and Videocon 0.59 million in the month. All operators put together, the lost subscription were to the tune of 5.22 million, as per TRAI data. However, other operators also added 8.19 million subscribers, so the net wireless additions remained in the positive territory at 2.97 million.

It is becoming more and more indicative that a new volume of subscribers, which can only come from the lower socioeconomic sections of the society, is increasingly difficult to achieve at present tariff levels. However, the rising cost of spectrum implies that operators would no more be keen to stretch their models to accommodate lower ARPU subscriptions. On the contrary, they would be taking measures to increase the tariffs, which could even lead to a further subscriber drop-out.

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