Maximum subscriber growth from Category C circles not translating into revenues

With maximum growth being recorded by the circles of Jammu & Kashmir, Bihar, and Assam, category `C’ are recording the maximum subscriber growth. However, this subscriber growth is not translating into revenue growth

Jammu & Kashmir recorded a subscriber growth of 16% with the number of subscribers increasing from 8.25 million at the end of June 2014 to 9.6 million at the end of June 2015, as per data released by Telecom Regulatory Authority of India. J&K circle is closely followed by Bihar where the subscriber base grew from 63.16 million at the end of June 2014 to 72.6 million at the end of June 2015. Bihar recorded a subscriber growth of 15% if one compares the total number of subscribers in June 2014 with subscriber number in June 2015.
On the other hand, Assam, which is also a category `C’ circle recorded a growth of 13% with subscribers increasing from 15.5 million at the end of June 2014 to 17.5 million at the end of June 2015.

However these three circles continue to record one of the lowest revenues for telcos. J&K recorded revenue of Rs 518.7 crore in AMJ 2015 while Bihar recorded revenue of Rs 2558.8 crore in the same time period. On the other hand, Assam recorded revenue of Rs 839 crore in AMJ 2015.

Jammu & Kashmir has a teledensity of 76.9% while Bihar and Assam have teledensity of 51.1% and 53.9% respectively, underlining a need of network expansion and addition of further subscribers from these circles.

Experts have been saying for long that the next wave of subscriber growth is going to come from the rural segment. The top three circles recording maximum revenue growth are predominantly rural. Telcos have largely ignored the country’s hinterland because Average Revenue Per User (ARPU) continues to remain low. The investment in rural expansion usually translates to long gestation period before a telecom operator is able to generate revenue or break even.

However it is a chicken and egg situation. Unless and until they expand more users will not come on board and revenue from existing subscribers is unlikely to increase if products specifically targeted at them are launched.

With 84.75 million (at the end of June 2015) subscribers, UP (E) has the largest subscriber base in India. UP (E) circle is closely followed by Tamil Nadu (79.96 million subscribers-June 2015) and Maharashtra (76.89 million, June 2015).