This year, for the first time in eight years, the country’s mobile user base is going to decrease. Industry experts say that due to conditions like minimum recharge every month, ownership cost is increasing. Because of this, users are stopping having two or three SIMs. The number of actual customers using mobile services on the country’s active mobile user base or network may be reduced in 2019 after 10 years. According to data from the Telecom Regulatory Authority of India (TRAI), by the end of October last year, the total active mobile user base had come down by 4% to 981 million from 1.02 billion a year earlier. This trend may continue in 2020.
It is expensive to keep many mobile connections
Industry executives and analysts say that having multiple mobile connections is becoming more expensive due to reasons like higher tariffs, expensive minimum recharge plans and increasing popularity of bundled 4G offers. This may initially cause a 25-30% drop in the growth of the dual SIM base and later people would prefer to close their passive SIM and keep a single connection. Rohan Dhamija, Head, Analysys Mason, said, “India’s mobile user base will definitely decline in 2020 as customers will abandon the practice of multi-SIM and keep the primary SIM.” Trai’s data shows that India’s total mobile user base The last time was in 2012, while the active user base has not decreased since 2009.
Loss from sim consolidation
Sanjesh Jain, research analyst at ICICI Securities, says Vodafone Idea could suffer from SIM consolidation ‘in an environment with rising tariffs’. It may have to lose users this year due to ‘lack of network integration in a large circle’. SIM consolidation refers to the reduction in the number of mobile connections. This can usually be due to increase in tariff, merger of telecom companies, acquisition or closure of business.
User increase on average revenue
In November 2018, Bharti Airtel and Vodafone-Idea started a minimum plan, which could be the reason for the possible decline in the active mobile user base in 2019. This strategy was adopted by both the old companies to remove inactive users. This has also led to an increase in average revenue on user (ARPU), which is a key measure of performance in companies in the telecom industry. The Cellular Operators Association of India (COAI) director general Rajan Mathews said that in 2020 the active mobile user base may decline marginally and more price sensitive customers can have a single SIM instead of dual.