Operator level customer churn to settle in 2 months: COAI
- By NewsOnFloor Staff
- Aug 09, 2019
- 325 views
By Anjana Das
New Delhi, Aug 9 (IANS) With the churning in the mobile subscriber base provoked by the minimum recharge plans finally settling down, people, in the next 2 months, will decide whether they have to go for higher minimum recharge plans or another operator and there should be some stability at the industry level, Cellular Operators Association of India (COAI) Director General Rajan Mathews has said.
"In the overall system churn is already stabilised, Churn is always part of any mobile network because mobile number portability (MNP) is there. Even before the minimum recharge plan, MNP used to cause churn. After the MRP (Minimum Recharge Plan) were introduced by telcos, we have cases of people choosing one operator over another because of tariff plan, quality of service.
"Overall, total connections remained relatively same. People are choosing among operators. In the next 30-60 days , this inter-operator churn will come down," Mathews told IANS.
Although the top operators like Airtel and Vodafone have lost subscribers because of the low voucher subscriptions, their average revenue per user (ARPUs), however, have increased.
The minimum recharge plan helped Vodafone Idea's average daily revenue (ADR) for the quarter grow 2.3 per cent sequentially, after declining for 11 earlier quarters, and helped increase ARPU for the second successive three-month period by 16.3 per cent to Rs 104.
In a recent analyst call, Airtel CEO Gopal Vittal said the company saw an erosion of about 45 million customers and consequent rise in ARPU in the fourth quarter of the last fiscal.
"That is kind of bottomed out now. So we saw an erosion of about 1.5 million customers, Rs 4 increase in ARPU. I would say that as far as minimum recharge plans are concerned, whatever had to be done is now done," he said.
In March, Airtel and Vodafone Idea lost 30 million customers. India's total wireless subscriber base fell to 1,161.8 million on March 31, 2019, shedding 21.87 million users over the previous month.
The overall tele-density in India declined to 90.11 at the end of March, from 91.86 in February. There was little improvement the following month as the country's mobile phone customer base grew by 490,000 subscribers to 1.16 billion in April, data released by the Telecom Regulatory Authority of India (Trai) showed .
In May, Airtel lost 3.3 million users, taking its total subscriber base to 321.9 million, while Vodafone Idea lost 1.6 million users, taking its total subscriber base to 393.3 million. Reliance Jio outpaced Airtel to become No. 2 telco by users in May.
Airtel and Vodafone Idea were losing subscribers at a fast rate, owing mainly to their introduction of the minimum recharge plans.
On this ground, Jio upstaged Airtel to become the second largest telco in terms of subscribers. According to May data released by the telecom regulator, the Mukesh Ambani-run Jio had nearly 323 million customers, compared with the Sunil Mittal-led Airtel's 320.38 million. The Kumar Mangalam Birla-led Vodafone Idea remains the market leader with 387.55 million.
The telcos said the move was designed to weed out non-performing customers, which boosted their average revenue per user. Airtel lost 1.51 million users in May, while Vodafone Idea lost 5.7 million.
In a conference call last month Vodafone Idea said: "We have seen churn in the low-end base. While we see churn in the low-end base, our higher ARPU base is broadly remaining the same. The churn in 4G base, or therefore, 4G handset base is much lower than the churn of the 3.7 per cent that we see overall."
"We've seen very good response on our entry-level newer plan at Rs 199 for 1GB data, which was launched in the third quarter, for which we've launched Rs 129 and Rs 139 renewal plans of unlimited voice with 2GB and 3GB fixed per month data, respectively," it said.
"This quarter, we have also introduced bigger data bundles at Rs 229 and Rs 255, offering unlimited voice with 2 and 2.5 gigs per day to upgrade the heavy data users from Rs 169, Rs 199 kind of plan to the Rs 229, Rs 255 kind of plans," it added.
(Anjana Das can be contacted at [email protected])
Source : ians