Chennai cell circle zooms up, up and away

P Vinod Kumar in Chennai

The cellular operators in the Chennai metro circle had a great year in 2001. The year saw the cellular circle hitting a vertical growth trajectory on the back of never ending freebies offered by the two operators. The two operators were locked in a dogged battle to gain the upperhand in the market before the impending entry of two more players onto their turf.

According to the latest figures published by the Cellular Operators Association of India (COAI), the total number of new subscribers added during the December 2000-November 2001 period was way above the cumulative accretion in the subscriber base since the conservative city went cellular a couple of years ago.

According to the COAI figures, the total number of connections added during the December 2000 to November 2001 period was a whopping 1,23,244, taking the total subscriber base to 2,14,167. This represents a growth of a little less than 136 per cent. Interestingly, the cumulative subscriber base in the Chennai circle till November 2000 was just 9,0923.

In relative terms, the Chennai circle has grown at an exponential 136 per cent during the period, followed by Delhi (92 per cent), Mumbai (71 per cent) and Calcutta (80 per cent). The all India average stood at 80 per cent for the period.

Industry sources told The Financial Express that one of the reasons for the explosive growth of the Chennai cirlce was the never-ending freebies offered by both the operators to lure customers. “The year 2001 saw an unprecedented activity in the Chennai cellular circle. It saw SkyCell, one of the licencees taken over by Bharti and the subsequent launch of its AirTel brand. RPG, the other player, was also quite aggressive rolling out offers one after another,” an industry observer pointed out.

“Though, there has been a growth in both pre-paid and post-paid segments, the real driver was the pre-paid user segment,” a senior official of one the cellular companies said. “The drastic fall in instrument prices along with various packages dished out by the companies literally broke the entry barrier to going mobile. Those who earlier thought they could not go mobile due to high instrument cost and entry fee can now afford to go mobile for as low as Rs 2,500,” sources pointed out.

Additional, both the companies invested heavily in updating technology and improving services in order to be way ahead of the third and fourth operators, whose entry is impending, sources added.