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A Perfect Storm for Mobile Operators (Part 2)

December 8th, 2009 · 11 Comments

Sometime in the next few months, Mobile Number Portability will be introduced. For a mere Rs 19, a subscriber can switch operators and retain their mobile number. This will shift the battleground to the high ARPU customers, who are much more reluctant to shift to the cheapest plans.The subscriber growth and cheap voice calls have further increased congestion in many parts of India. Call drops are quite frequent – and have been so for some time. To be fair to operators, they are working with a fraction of the spectrum that they really need given the subscriber numbers.

(On a separate note, the government policy of allocating additional spectrum based on subscriber milestones skews the focus for operators to adding subscribers at all cost. As some operators have demonstrated, these are numbers which can easily be fudged. All of this for the ultimate prize – scarce spectrum.)

We are also now seeing the launch of the newer operators, who got their 2G licences under questionable circumstances. The only weapon they have in their arsenal for subscriber acquisition is – no surprise, cheaper voice.

All of this has hit India’s leading and oldest mobile operators hard.

Continued tomorrow.

Tags: Uncategorized

11 responses so far ↓

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  • 2 Sundar // Dec 8, 2009 at 7:52 pm

    Rajesh,

    I wish we have two niche operators who compete on Quality. As you rightly observed, connectivity and quality of calls have become bad. I am ready to pay a premium of Rs 200/month for high quality.

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