There has been a steady decrease in the number of mobile users in rural areas over the last six months. According to data available with the Telecom Regulatory Authority of India (TRAI), 20 million mobile phone users have disconnected their subscription since December 2018.
From 528 million mobile users in December 2018, the number of mobile users in rural areas had come down to 508 million by June 2019. Fixed line telephony also declined from 3.11 million to 2.85 million during this period. The combined fall in fixed line telephony and mobile user base has resulted in the overall rural tele-density to fall from 59.50 in December to 56.99 in June 2018.
Factors affecting user base
According to industry analysts, there are two factors that has led to the decline of rural user base. “Consolidation in the mobile industry has meant that a number of players have either shut shop or have been acquired by larger players. This has also consolidated the user base as subscribers with dual SIMs now do not have too many options to pick from,” said an executive of a mobile operator. Operators such as Tata Teleservices, Reliance Communications, Uninor and Aircel, which had considerable rural operations have exited the market due to unviable business environment.
The second reason is that some of the remaining players are beginning to let go of low paying subscribers in a bid to push the average revenue per user. “Many of the existing operators have withdrawn the low value Recharge coupons. In some cases, the minimum recharge required has gone up three times. Many of the 2G-only users may have given up multiple connections which they had earlier,” said another industry executive.
Fixed line telephony has been on a steady decline with Bharat Sanchar Nigam Ltd going through its own financial crisis. “BSNL is the only player offering fixed telephone services in rural areas. But some of these connections are unviable and were being offered to meet social obligations. However, with the losses mounting for the PSU, it may be finding it difficult to sustain operating these connections any more,” said a former BSNL offical.