Falling New Subscriber Additions



No surprises here... new subscriber additions growth rate has started to fall; it has been falling for quite a few months now. What is suprising is the questions being asked : high tariffs, lower margins for retailers, document requirements etc. A simple perusal of the data throws up a completely different scenario, one which I have not found being mentioned anywhere:


  • Overall teledensity of 79% approximately
  • 686 million active subscribers out of 921 total connections
  • Delhi has a teledensity of 237%
  • 65% mobile subscribers are in urban areas
From these 4 points, a few interesting realities emerge:

  • Delhi's teledensity percentage means that there will be some states with a much lower teledensity. It does not take a genius to figure out that these states will be the poorer states, where pushing connections will be far more difficult simply due to lower per capita income and other development factors
  • Urban areas are reaching saturation in terms of fresh connections; a major change in strategy is required in the urban areas, with the focus shifting to Average Revenue realised per user, customer retention, coverage quality, proper retail servicing in terms of recharge availability, maintaining channel hygiene in terms of claim settlement, customer issue resolution... in simple terms, ensuring that you cover any and every reason due to which a customer will change his service provider. By and large, a customer will change only because of poor service, non-availability of recharge, influence of the retailer. The focus has to shift to these factors. Sales numbers are of course important: but there is now an urgent need to assess - or rather, re-assess Key Result Areas across departments to reflect the new realities of the telecom business and realign the teams focus along these lines. 
  • More than 200 million connections are inactive: these will actually reside in the second sim slot - at least a large number of them. 
  • Rural areas are the growth regions: but the approach has to be tempered with some degree of realism in these areas, The pace of growth be be far lesser in these areas; they will require time
It is no surprise that new customer additions are falling, A simple recall of some management basics will suffice; in fact, this fall is only to be expected. As per the customer adoption curve below, as the industry grows in time, the rate of new customers being added come down,  as 50% of the population will already have adopted the technology... refer diagram. Recall this from management classes? The fall in new additions should have been expected, indeed should have been foretold! The numbers above tell the whole story! The entire paradigm of business is changing in the telecom space... 


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