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ARPU target 200; Indian mobile subscribers trudge along at Rs 94.87

Revenues from data usage and calls have almost doubled YoY.

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Mumbai: Indian mobile subscribers consumed 11.76 Gb of data on average per month and generated an average revenue per user (ARPU) of Rs 94.87 at the end of December 2020, according to Telecom Regulatory Authority of India (TRAI).

At a press conference earlier this month, Bharti Airtel chairman Sunil Mittal stressed the importance of hiking tariffs and bringing ARPUs to at least Rs 200 by the end of the financial year 2022, for the sustainable growth of the sector.

ARPU per month has increased from Rs 74.88 in the year 2019 to Rs 94.87 in 2020 and minutes of usage has increased from 701 minutes to 759 minutes in the same period. ARPU for post-paid service customers decreased from Rs 259.02 to Rs 226.83 while for prepaid service customers, it increased from Rs 66.48 to Rs 88.37. The total gross revenue of the telecom sector has increased from Rs 2,43,702 crore to Rs 2,74,208 crore.

Notably, revenues from data usage and calls have almost doubled. Revenue from data usage has increased from Rs 42.37 to Rs 81.81 whereas revenue from calls has grown from Rs 8.12 to Rs 17.72. Rental revenue has sharply declined from Rs 31.07 to Rs 0.95, as per TRAI.

Mobile data usage has grown by 35.6 per cent year-on-year (YoY). The total revenue from wireless data usage increased from Rs 59,334 crore to Rs 113,156 crore with a yearly growth rate of 90.71 per cent. The ARPUs for wireless data usage alone increased from Rs 76.59 to Rs 128.61.

Airtel reported ARPUs of Rs 121 at the end of December 2020 as per the company’s annual report. In their recent quarterly earnings report, the company disclosed that ARPUs had increased to Rs 146. On the other hand, Reliance Jio and Vodafone Idea reported ARPUs of Rs 138 and Rs 104, at the end of the fourth quarter for FY 2021.

India’s ARPUs are the lowest in the world at $1.8 whereas countries like Brazil, China, EU and the US ARPUs stand at $4.6, $6.7, $12.1, and $37.8, respectively. Indian mobile customers consume more Gb of data than any of these countries (GSMA Intelligence Database, Sept 2020). While consumers get more benefits and value from unlimited voice and daily data allowances, compared to five years ago, India’s ARPUs are actually lower in comparison to historic trends.

The ARPU erosion is due to telecom operators aggressively defending their subscriber base by selling heavily discounted voice plans with bundled data despite tremendous growth in the volume of voice and data usage in the last few years. There has been an industry-wide call to hike the floor prices which prevents telcos from undercutting each other across various services.

Recently, the telecom players Jio, Airtel and Vodafone Idea took some solace as the government announced relief measures for the sector including a moratorium of four years on interest rates related to payment of AGR dues. It also announced 100 per cent foreign direct investment (FDI) in the sector and made it easier to get clearance for tower installation.

India’s wireless internet subscribers grew by 10.52 per cent YoY and wired internet subscribers grew by 14.07 per cent. The number of wireless internet subscribers grew from 696.36 million to 769.64 million, where wired internet subscribers grew from 22.39 million to 25.54 million in December 2020.

The total number of internet subscribers grew to 795.18 million, with Reliance Jio, Bharti Airtel, Vodafone Idea and BSNL having 51.6 per cent, 25.5 per cent, 17.3 per cent and 4.1 per cent of the market share, respectively.

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