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Cool it! Indian mobile phone growth not that scorching: Voice&Data

A study in the latest issue of Cybermedia’s Voice and Data magazine suggests that Indian euphoria about the numbers having access to a mobile phone may be misplaced or exaggerated. The article points to the official numbers released monthly by the Telecom Regulatory Authority of India and says these represents subscriptions – not subscribers. At least  15 percent of Indian phone users have multiple SIMs in their phones. Many prepaid subcriptions are dormant. Considering all this, Voice and Data suggests India's actual mobile users could be 500 million, lower than the 810 million estimated till end March 2011.

The article says: A footnote in the TRAI release provides the first caveat: “Active wireless subscribers in VLR in February 2011 are 563 million” pointing to the fact that the actual number of mobile users in India is below the 810 million or even the 791 million mark.

The VLR, or Visitor Location Register, is a database of the subscribers who have roamed into the jurisdiction of the mobile switching center (MSC) which it serves. Each base station in the network is served by only one VLR, hence a subscriber cannot be present in more than one VLR at a time. So 563 million VLR in February means that the remaining 228 million subscribers, are inactive: users (mostly prepaid ones) who have not recharged their SIMs for a long time and are in the "grace period" before disconnection. This grace period can vary significantly, sometime stretching into months or a year, even though such users are unlikely to renew and recharge.

The second major caveat is that these are subscriptions, not subscribers. If a person has two SIM cards, he will show up has two subscribers in the TRAI data.

The study also quotes former CMD of BSNL Kuldeep Goyal as saying “Obviously,
800 million subscriptions does not mean 800 million users, actual number of active users would be in the 450-500 million range.”

There is no firm data on multiple SIM ownership, a very major trend in India, going by the large number of dual and triple SIM handsets sold. According to conservative industry estimates multiple-SIM ownership is at least 15% to 30% of total SIMS. That is, if you randomly pick 100 mobile users in India, they will own 115 to 130 active SIMs between them. Other industry sources say this figure is too conservative, and multi-SIM ownership is well above 30%.

“Bundling of SIM cards with mobile handsets at an entry price starting from Rs. 500 and upwards, and the ‘affordable lifetime connection’ plans caused a surge in new mobile connections,” says Naveen Mishra, Lead India Telecoms Analyst at CyberMedia Research. Supporting the Voice&Data argument further, he adds. “More than a third of handsets sold in the country during the quarter ended December 31, 2010 was a dual- or triple-SIM slot phone, as compared to less than 1 in hundred multi-SIM mobile phone sales in the quarter ended March 31 2009.”

Says Voice&Data Chief Editor Prasanto K Roy: "If you want to compute the real tele-density, to know how many real people own a mobile phone in India, you have to exclude inactive subscriptions and multi-SIM ownership. That leaves 501 million actual phone users. The assumputions we have made are conservative. The real picture could be more stark.”

However, this huge inaccuracy has a strong silver lining.

Adds Roy: "This does mean that the addressable market for handset makers and operators alike is bigger than most people thought—over 200 million bigger. It means over 700 million people do not yet have mobile phones or subscriptions, and that makes this the biggest market in the world for the decade ahead."

So the potential of Indian telecom market increases even further in light of the actual mobile subscriber base.
Link to V&D article: 

Footnote: We agree; In our snapshot feature we are accordingly qualifying the numbers as subsriptions.

May 3 2011