Statistics show increase of Mobile subscribers base increasing every month but strangely the revenue that must also increase with addition of subscribers is on the decrease. What can be the reason? "Business Line" analyzes it as follows:--
" The two figures mirror each other — the quarter-on-quarter rise in the number of mobile subscribers and the quarter-on-quarter drop in average revenue per user.
Yet, the fall in ARPU is not simply a mirror image of the growing subscriber base. It lives a life of its own.
New users use their phones less intensively than existing subscribers. However, this is only a small part of the story. More important are ‘life time' subscribers, who get double counted when they migrate to a new service provider. According to an industry insider, the churn — the total number of subscribers that has to be cropped to arrive at the correct figure — is 20 per cent.
Still, talk time went up 20 per cent in 2009. Not as fast as the 11-14 per cent quarter-on-quarter rise in the number of subscribers, but the important thing is that the market is growing rapidly. It is not a zero sum game.
However, competition that drives the numbers, has led to a price war that makes the whole thing more than just another numbers game. ARPU has fallen faster than minutes of talk time per user. So the increase in talk time has failed to translate into an increase in revenue."
No comments:
Post a Comment