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Help All new telcos have less than 50% active users, finds Trai
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All new telcos who obtained licences under controversial circumstances in 2008 have less than 50% active customers on their networks, indicating that subscribers who opted for their services are either multiple SIM users, or had signed up only for the freebies that came bundled with the start-up kits.

Figures released by the telecoms regulator reveal that a mere 25% of S Tel’s customer base are active users, while it is 31% for Uninor and 39% for Videocon. Sistema Shyam has a 46% active users and Etisalat, whose subscriber is under a lakh, has about 43% active users. Even Tatas who launched GSM services last year under the DoCoMo brand has only 46% active customers on this technological platform.

This is in sharp contrast to the national average of 70% active users on the operators’ network. Incumbent GSM operators are showing strong numbers on this front – India’s largest telco by both customers and revenues, Bharti Airtel’s has 90% active customers, Idea Cellular at 88%, followed by Vodafone Essar at 75%, Trai’s data adds.

“Most of the new operators are in the business of throwing SIMs to collect a customer base and Trai’s data is therefore no surprise. The industry was aware of this,” said BK Syngal, senior principal, Dua Consulting, and former chairman of VSNL.

This is also the first time that the telecoms regulator is releasing the percentage of active customers on operators’ networks. Trai calculated these numbers based on the visitor location register (VLR) figures released by all operators on September end. VLR is a temporary database of the subscribers who have roamed into the particular area which it serves. Each base station in the network is served by exactly one VLR, hence a subscriber cannot be present in more than one VLR at a time.

Admitting that the ratio of active users on their networks were low, Uninor, in which Norway’s Telenor holds a majority stake, said that high churn and a multi-SIM situation were challenges that a new operator faced.

“This is true for every operator that is new in any circle – irrespective of its vintage elsewhere. Our aim continues to be to move towards a primary SIM status, and we have seen encouraging results with our dynamic pricing concept where a customer needs to keep our SIM switched on in the phone to enjoy the benefits of location changing discounts. This is already resulting in improved VLR ratios and good revenue growth,” the company added in its reply to an ET query.

The CDMA operations of Reliance Communications and Tata Teleservices score lower on the active customer ratio, at 68 % and 44% respectively, when compared to the incumbent GSM operators.

Etisalt and S Tel did not respond to an ET query on this issue. BSNL and Aircel both have 59% active users on their networks.
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