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India’s mobile sector gets a reality check

02 марта 2010

The number of Indian mobile phone users is up to 40 per cent lower than the official numbers suggest, industry figures and analysts estimate, raising questions over the true extent of India's telecoms boom and the valuations of its wireless operators.

Many Indian users are buying multiple Sim cards, a large number of which are “lifetime” cards that are considered to be active even when they are no longer being used.

Analysts say some newer operators are also sending Sims to retailers that have been activated even before they are sold to end users. All of this is inflating estimates of the total number of subscribers in India.

“It’s the reality of the market,” Syed Safawi, president of wireless at Reliance Communications, India’s second largest mobile operator, said of the multiple Sim phenomenon. “It’s for companies like us [to work out] how we can leverage that to our advantage.”

Gearing up for ‘hyper-competition’

Syed Safawi, the head of the wireless division at Reliance Communications, says it is a fact of life that Indian telecoms subscribers now constantly switch between networks in search of the best deal, Joe Leahy reports from Mumbai.

The question is, how to get the most out of each subscriber for the few days a month when he or she might be using a Sim card bought from Reliance, India’s second largest mobile operator.

“Having multiple Sims . . . is not necessarily a bad thing as long as we can get revenue out of those multiple Sims,” Mr Safawi says in an interview at Reliance’s headquarters on the outskirts of Mumbai.

Like the rest of India’s mobile operators, Reliance is gearing up for a second year of “hyper-competition”, in which operators are no longer focusing only on adding new subscribers but also on securing existing users.

With the auction of third generation wireless spectrum expected as early as April, the coming months will be critical in deciding which among the India’s more than 12 operators emerge victorious in the world’s fastest-growing mobile market.

India is the fastest-growing large telecom market in the world, adding nearly 20m subscribers in January to bring the total to more than 545m. This is equivalent to wireless teledensity of over 46 mobiles per 100 people, according to the government's industry watchdog, the Telecoms Regulatory Authority of India.

The rapid growth of India’s market has attracted operators from around the world, including Vodafone of the UK, Japan’s DoCoMo, Norway’s Telenor, Russia’s Sistema and the Gulf’s Etisalat, most of which have teamed up with local partners

The creation of national mobile networks is also a rare infrastructure success story for a government still struggling to build enough roads, power stations and airports to support India’s swift economic expansion.

But the flood of the new operators, with up to 12 competing in some regions, has led to a price war that has driven prices down to a fraction of a US cent per minute.

This in turn is encouraging users to habitually switch operators in search of the best deal.

The lack of number portability in India, which prevents customers from keeping the same phone number while switching operators, means subscribers instead buy new Sim cards. The trend has been accelerated by the introduction last year of phones capable of handling more than one Sim.

Operators such as Mr Safawi estimate the ratio of Sims per actual user in India at about 1.25.

But analysts believe that once active but unused Sims and activated but unsold Sims are taken into account, the genuine number of end users in India at present could be up to 40 per cent lower than the government's figures.

This level of duplication in the figures would be double the average of mature markets, but similar to the situation in some rapidly growing emerging markets.


Источник: Financial Times

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