Mumbai-based architect Vrushali Sawant prefers to have two mobile connections. Sawant, who has been using these connections for more than a year, says, “My first mobile number was an MTNL SIM card that I still use, but a year back, I also took a Vodafone connection.” She uses her Vodafone connection for daily voice calls and the MTNL SIM card for 3G access.
Though giving free talktime to new customers helps operators expand their customer base, these new subscribers move away once their free minutes are used. “This is fast multiplying into a big number. Telcos are already witnessing churn rates of between five and six per cent,” notes Madhusudan. In fact, JuxtConsult claims that 355 million connections are being used regularly. The problem is aggravated by the growing number of inactive connections that are not surrendered by the subscribers. “Earlier, if a customer did not recharge in a month, the connection was labelled inactive. But now, with life-time validity tariffs for pre-paid connections, the subscriber is required to recharge for a minimum of Rs 50 in six months,” says Surya Mahadevan, COO, Loop Mobile. JuxtConsult data suggest that ‘unskilled and skilled workers’ form the largest ‘occupational’ chunk of mobile users in both urban and rural India. Customers, Mahadevan of Loop Mobile agrees, use SIM cards selectively for incoming calls or just use the free minutes before moving on to another network. Then, there are budget-conscious subscribers like Gaurav Deoras, a Pune-based professional working with Vodafone who owns three mobile connections — an MTNL connection that allows affordable calls between Pune and Mumbai, where his mother resides, a Reliance connection which he uses to talk to friends, and a Vodafone connection that was given to him when he joined the company. But even with multiple connections, Deoras is not willing to splurge on bills. “I ensure that I don’t spend more than Rs 300 on any of my mobile connections,” he claims. A steady rise in the number subscribers who do not want to spend over Rs 200-300 every month on their mobile bills has become a cause for concern for the industry. On a year-on-year basis, the revenues of operators have been declining or growing flat. With availability of too many options in the market, multiple SIM ownership is set to rise, admits Sanjay Tiwari, CEO and director of JuxtConsult. “This trend of owning multiple SIMs is only going to increase, at least in the short term,” he says. Tiwari believes that the focus of the marketing initiatives of most telecom operators is such that they end up selling more SIM cards to existing customers. “They are especially aggressive among the new entrants who want to get a substantial customer base,” he notes. JuxtConsult underlines that almost two-third mobile-using households are still ‘single-mobile-user households. Tiwari concludes, “The scope to increase the user base and penetration of mobile phones is huge than just to play mainly the game of multiple connections and increasing the teledensity.” |
Monday, August 30, 2010
33% mobiles are inactive : JuxtConsult
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