The Hindu Business Line : Lower ARPU, but cell cos earnings up 14 pc

DESPITE the steadily declining average revenue per user (ARPU) of GSM service providers on account of the sharp fall in tariffs, there has been a 13.72 per cent increase in the gross revenues during the third quarter of the current fiscal.

As per the financial details of all cellular companies submitted to the Telecom Regulatory Authority of India (TRAI), the ARPU has declined by 5.67 per cent to Rs 479.15 as against Rs 507.97 in the previous quarter, while the operator revenues increased to Rs 2,219.57 crore from Rs 1,951.77 crore.

The top three private GSM service providers, Bharti, Hutch and Idea Cellular have registered revenues of Rs 858 crore, Rs 636.66 crore and Rs 280.66 crore, respectively compared to Rs 573.10 crore, Rs 536.91 crore and Rs 240.52 crore, respectively.

On the other hand, their ARPUs have declined to Rs 477.55 (Rs 481.63), Rs 606.87 (Rs 612.71) and Rs 451.97 (476.96). It should be mentioned here that the figures of Bharti that have been submitted to TRAI differ from those mentioned in the quarterly report that was issued by the company recently in relation to its financial results.

According to industry sources, this trend of declining ARPUs and increasing revenues is purely on account of the rising subscriber base. Even as more and more customers are going mobile, they are spending less on talk time. However, the base has expanded resulting in revenue increase to operators.

Here it should be kept in mind that TRAI is keeping a close watch on the subscriber base that is submitted by the operators, since there could be some overstatement by them. As of now the Authority has not found any such overstatement.

As per the data that has been submitted to TRAI, among the four metros, which account for a big proportion of the GSM cellular subscriber base, the ARPU in Chennai is the highest at Rs 572.24 (as against Rs 578.30 in the previous quarter), followed by Mumbai at Rs 539.71 (Rs 606.22), Delhi Rs 528.43 (Rs 539.29) and Kolkata Rs 477.66 (Rs 513.42).

Does this mean that among the big cities, the consumer in Chennai is providing more returns to the operators?

May be not. ARPU is the revenue divided by subscribers, if both the figures are small the end result could still be high.

For that matter, among these cities, Delhi contributed the highest cellular revenue of Rs 413.16 crore, followed by Mumbai Rs 352 crore, Kolkata Rs 104 crore and Chennai Rs 102.09 crore. During the quarter, these cities had a subscriber base of 29.34 lakh, 25.07 lakh, 7.92 lakh and 7.7 lakh, respectively.