India’s mobile subscriber base crossed 771 million by the end of Jan 2011. With around 20 million mobile users added every month, by now we must have already crossed the figure of 800 million subscribers. The market share of major Indian telecom players at the end of Jan’11 stood as given in the following figure:
Mobile Number Portability (MNP) was launched in India on January 20, 2011. Just 12 days of MNP during Jan’11 have thrown a different set of statistics. While some of the telecom operators viz. Videocon and HFCL have witnessed negative net addition in the wireless subscriber base (GSM + CDMA) during Jan, some large telecom operators viz. Vodafone, Bharti Airtel and Reliance have made substantial gains. This can be adjudged from the fact that these three large telecom operators, which used to together constitute about 40-42% of the net additions prior to the launch of MNP, witnessed sharp rise in this percentage and constituted over 50% of the net additions in the Jan subscriber base. It remains to be seen as to what the statistics will look like when Telecom Regulatory Authority of India (TRAI) releases the figures for Feb’11, a first complete month of MNP in effect. If we were to go by these trends, this phenomenon may be even more pronounced for subsequent months, more so when the consumers become increasingly more aware. After all, the barrier to change the existing telecom operator is as low as Rs. 19.
I have captured the month-wise percentage net addition of subscribers for the various Indian telecom players for a three-month period starting from Nov’10 to Jan’11 in the following figure:
Now, is this a signal of the consolidation for the Indian Telecom Industry? Only the time will answer this question. Quality of service (QoS) is presumably the major differentiator for users to hop from one service provider to another. The Indian telecom players are already grappling with the falling average revenue per user (ARPU). In a fiercely competitive Indian telecom marketplace, it is very difficult for the small players to invest significantly into improving their QoS levels when the margins are already under pressure. Mobile number portability, as it appears, has only added to their woes. If things were to continue in this fashion, the time is not far when we will see a wave of consolidation in the Indian Telecom Industry.