Indians: No To Sms, Yes To Call

[kshah 452]

NEW DELHI: The Indian telecom customer has become wise. With telecom tariffs on a downward spiral, mobile customers are resorting to making a direct call rather then send a text message, also called SMS.

Even as the average minutes of mobile phone usage is showing an upward trend, this has had a direct impact on operators’ revenues from SMSs. Latest figures released by sector regulator TRAI reveal that customers preference for texting in India has hit an all time low.

From accounting for close to 8-9 per cent of the operators’ revenues at one point, texting now provides GSM players with 4.3 per cent of their total revenues, while for CDMA operators, it is a mere 1.8 per cent.

According to TRAI, the average number of SMSs that customers sent has fallen by 7 per cent for GSM and 6 per cent for CDMA operators during the last quarter.

An average GSM user sent about 26 SMSs a month in the quarter ended March 08, compared to 28 SMSs a month in the previous quarter (Oct-Dec 07), 32 a month in the July-Sept quarter, 35 in the April-June quarter, 39 in the Jan-March quarter and 48 in Oct-Dec 06 quarter, TRAI said.

Ditto on the CDMA front --the number of outgoing SMSs by customers using this technology platform fell to 16 per month after remaining flat at 17 per month for nearly half year prior to that, at 20 per month in Apr-June and 24 in Jan-March 07).

Telcos however, see no reasons for concern. They share the view that “any fall in SMS revenues will be more than compensated by increase in the average talk time and revenues” from their customers.

“For instance, while the average number of SMSs have been falling for several consecutive quarters now, the average revenue per user (ARPU) for GSM operators has stabilised and even shown a marginal increase for the first time,” said an executive with a GSM player.

In fact, the regulator’s figures correlate with GSM player’s argument: For the first time in the recent past, the ARPUs of GSM players have shown an increase – despite most of the new additions coming from rural India. The ARPUs have moved to Rs 264 in March 08 compared to Rs 261 in Dec-07.

“ARPUs for postpaid and prepaid services have shown an increase of 1.59 per cent and 2.3 per cent to touch Rs 638 and Rs 224 in March 08,” TRAI said. ARPUs in India are among the lowest in the world.

The regulator said the usage of GSM subscribers has increased to 493 minutes per month per customer in Jan- March 08 quarter, against a constant 463 minutes for about six months prior to that. “Both, outgoing and incoming minutes of usage have grown by 7.04 per cent and 5.49 per cent, respectively, TRAI said.

However, the picture is not so bright on the CDMA front: Their ARPUs and minutes witnessed major declines during the last quarter. While ARPU for the quarter ending March 2008 fell to Rs 159 compared to Rs 176 in December 07, the minutes of usage declined to 364 against 375 for the quarter ended December 2007 and 413 for the July-September quarter.

Source : Indiatimes

See ARPU details. CDMA operators, mainly reliance - foolish people unable to satisfy people who gives them revenue as well as people who gives them number (low end users)

Edited July 24, 2008 by kshah

[rajat8676 0]

Best example is the national SMS costs Rs 2 whereas the STD rate is only Rs 1.5 per minute in most of the plans and even lower when one uses STD card. So call makes more sense than SMS

[raccoon 53]

Not surprising... CDMA is so SMS unfriendly in every way... at least RCom is... dont know about others.

[commonman 228]

when you need to send the same info to multiple persons, sms comes handy. also its useful when the other person may not be in a position to receive a call (like in a meeting). But sms is cost effective only if used with special sms tariffs. (like R.60 for 1000)

[KumaarShah 143]

Exactly and RCOM is taking advantage of lower voice tariffs (not now actually, all are more or less equal) and charging a huge bomb in SMS and data services. Maybe they want to still reduce voice charges or maybe they need the money to fight MDA.....