Tata loses millions of telecom subscribers in July, net addition drops to record low: TRAI

The Tata group purged millions of connections from its telecom networks in July, according to the latest telecom subscription numbers provided by the Telecom Regulatory Authority of India (TRAI).

Also, according to the TRAI, monthly addition of wireless subscribers in India fell to just 6.67 million in July this year, the latest month for which data is available. The number is the lowest net monthly addition for India in several years.

In comparison, monthly additions were more than 20 million per month late last year, hitting a record 22.9 million in November. (See chart below).

According to the July numbers, Tata Teleservices, which at one time was adding more than 3 million subscribers per month, held a negative 40% share of the net additions during July, implying that instead of adding subscribers during the month, it lost them.

At -40%, its ‘contribution’ was around 2.67 million subscribers in the negative. In comparison, it had added 0.2 million subscribers in June. Assuming that net fresh inflow of subscribers was on similar levels, Tata — which runs both CDMA and GSM networks — purged close to 3 million users in July.

The possible reason for the step is not hard to see. Tata, as one of the most aggressive new operators selling millions of connections per month, was soon saddled with millions of inactive users — people who bought the connection, but kept it aside.

As a result, Tata, which runs its GSM operation under a joint venture with the Japanese operator NTT DoCoMo, was consistently turning out in TRAI reports as the only ‘Tier I’ telecom operator for whom more than half of the subscribers were “switched off” as measured by network records.

In June, for example, only 48% of its claimed subscribers were “switched on” going by the VLR data collected by TRAI. With the purge, however, this rose to 48.8% by the end of July.

Tata’s VLR (“switched on”) numbers were even lower than those of the state-owned BSNL (53%) and even new operators like MTS (51%) and Uninor (61.3%). They were a far cry from those of Idea (93.3%), Airtel (89.9%) and Vodafone (81.5%).

Poor VLR numbers are considered an indication that though subscribers were initially tempted by offers and discounts to try out a service, the operator was unable to hold on to them, often due to a failure to cover all areas under their networks.

Tata is the second operator to purge large number of subscribers at one go — with Videocon carrying out its purge a few months earlier. It too continued to show negative net addition during July.

Meanwhile, the July numbers further confirmed a trend noticed earlier this week — the net addition numbers are on a steep decline and the relative shares of the old operators in these monthly additions has bounced back to healthy levels.

In fact, in a breath-taking restoration of fortunes, the four ‘traditional’ operators — Bharti Airtel, Vodafone, Reliance Communications and BSNL — accounted for close to 90% of the total additions in July. Of course, there is a bit of statistical fluke in there because of the -40% share contributed by Tata. (see chart above)

Interestingly, Uninor — a new operator — was ahead of Idea Cellular, an old operator, in net monthly additions, with a share of 15.9%.


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