GSM Call Drop in May 2011

[ravi_patent 28]

http://www.thehindubusinessline.com/todays-paper/article2121392.ece

GSM mobile subscription, which has been going the roof for the past four years, is showing signs of slowing.

For the first time since September 2009, GSM operators have added fewer than 10 million subscribers in a month.

In May, 11 GSM operators together added 9.5 million new users taking the total subscriber base to over 590 million. While this addition in number is still good compared to other global markets, it is much lower than what the operators were adding over the past few months.

According to the Cellular Operator's Association of India (COAI), the dip in numbers is due to lack of competition among operators on tariffs, which has cut down the number of dual SIM users.

“In the past few months operators have not offered any new deals on tariffs. This has in-effect brought down the number of subscribers who would take multiple connections. Earlier, subscribers had the incentive to take one or more connections to take advantage of a better tariff plan on another operator's network,” Mr Rajan S. Mathews, Director-General, COAI, told Business Line.

Mr Mathews said that stiff subscriber verification norms are also having an impact on mobile offtake in the rural areas. “The growth in mobile subscription has been coming from the rural areas but as operators move deeper into the hinterland issues such as subscriber verification and high cost of providing connection are coming in the way,” he added.

Market watchers said that the introduction of Mobile Number Portability may have also put breaks on the dual SIM market.

So, is this the beginning of slowdown of India's telecom growth story?

According to the COAI, the demand for mobile is still there, so the net additions will bounce back in the next few months but not to the extent that the industry saw at the start of this year.

“We were adding close to 15-16 million subscribers a month. So, that may not happen but we expect the number to stabilise around 11-12 million additions for some time,” he said.