Operators need to look at circles where penetration levels are low.
The total number of subscribers added by GSM telecom companies continued to decline in November. At the start of the financial year, the monthly run-rate was above one million. While hyper competition plagued the industry, net monthly additions were as high as 14.7 million in February.
However, as operators raised rates and some of the irrationality subsided, net additions settled around one million in May. Net subscriber addition numbers for November have come in much below expectations at 6.7 million, down by 6.3 per cent month-on-month. The total GSM subscriber base is 632.1 million.
Analysts say slowing growth is not entirely a bad idea, so long as operatorsconcentrate on quality subscribers and weed inactive ones. Given that penetration level in metro circles is close to 150 per cent, the growth opportunity there is limited. However, a large part of the new subscriber additions is still coming from the metros and Circle A (Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh), where penetration is close to 85 per cent.
Analysts say the real potential lies in Circle B (Punjab, UP, Haryana, Madhya Pradesh and West Bengal) and C (Bihar, Himachal Pradesh, Jammu & Kashmir and Orissa). Ankita Somani of Angel Broking says in November, two million subscribers were added in Circle A, against 2.4 million in October, taking the total subscriber base to 217.1 million. In circle A, Idea reported the highest net subscriber addition of 1.06 million, followed by Uninor (0.68 million), Bharti (0.26 million), Aircel (0.20 million) and Vodafone (0.15 million). The new subscriber addition run-rate in circle B declined by 15.6 per cent month-on-month to 2.9 million in November, against 3.4 million in October. Subscriber additions in circle C remained flat month-on-month at 1.0 million.
From the start of the financial year, Bharti and Vodafone have seen subscriber additions fall from two million to a million, each. Analysts say the bigger players claim they are looking at increasing footprint in circles with lower penetration levels, but this does not seem to be happening. Idea is the dark horse that has surprised people, with steady net additions and a high percentage of active subscribers (92 per cent).
Idea added 2.2 million subscribers in November, the highest by any operator. This has led to a jump in its net subscriber addition market share to 32.5 per cent from 23 per cent in October. The company’s overall subscriber market share also increased to 16.5 per cent in November from 16.3 per cent in October. Clearly, when the low-hanging fruits have been plucked, operators will have to look for growth in circles where levels of penetration is relatively low.