The pecking order in terms of subscriber base is quite established in the Indian mobile market with Bharti Airtel on top followed by Reliance Communications (RCom). However, in terms of more realistic parameters like average revenue per user (Arpu), minutes of usage (MoU) and realisation per minute, Bharti retains the number one slot while RCom slips to number four with Vodafone Essar and Idea Cellular stealing a march over it.
Figures of fiscal 2010-11 show that in terms of Arpu, Airtel tops the chart at Rs 202 followed by Vodafone Essar?s Rs 180, Idea Cellular at Rs 169 and finally RCom at Rs 117.5. If one assesses on the basis of the minutes of usage (the average talk-time) and the realisation per minute data for the telcos there’s further change. While Airtel has the highest quarterly minutes of usage per subscriber at 458 minutes, Idea Cellular comes second at 401 followed by Vodafone Essar?s 386 and RCom at 93.75.
Analysts said that increasingly, these parameters are being used to measure mobile firms profitablity rather than overall subscriber base.
Since the Indian market is characterised by very low tariffs Arpus are low and does not provide the right picture of a company?s health. The low tariff is compensated by higher talk-time. However, in recent times, with the bulk of net subscriber additions coming from rural areas, the increase in the average talk-time has also slowed down. According to analysts, such a scenario is bound to lead to tariff hike in the near future. ?The telecom industry at present is at a very critical juncture. While operators keep on adding large number of subscribers, they are struggling to increase their revenue market share since competition has increased and the inflation inhibits any further tariff cuts. The telecom industry is currently Ebidta negative and if you take the top handful operators, then together they are marginally Ebidta positive but profit after tax (PAT) negative. They can?t sustain such unprofitable operations and the only way forward is a 5-10% tariff hike,? Prashant Singhal of E&Y said.
The telecom industry simultaneously is undergoing another crucial change. Higher net additions no longer reflects dominance.
This explains why RCom, despite being the country’s second largest telecom operator in terms of subscriber base, ranks below Vodafone Essar and Idea cellular in terms of both Arpu and MoU, making them look more profitable.
Even the latest Trai data shows an erosion of more than 1% in the revenue market share of RCom, Bharti Airtel and BSNL together.