The Hindu Business Line : `Growth in cell user base may be exaggerated'

The number game
Subscriber list being higher than handset sales seem to indicate exaggeration in subscriber list.
But high price of handsets may lead to subscribers having two connections and one handset is COAI's counter argument.

New Delhi , April 15

The phenomenal growth in mobile subscriber base being reported by the operators every month may not be entirely true.

According to a new study done by the US-based research and analyst firm Yankee Group, the addition of new cellular subscribers in the country may be exaggerated by about 10-15 per cent.

The report points out that the number of mobile handsets sold in the market is lower than the number of new subscribers being added by the operators.

Speaking to Business Line Mr Farid Yunus, Senior Analyst, Wireless/Mobile Asia Pacific, said, "In any market the handset sales are always higher than the number of subscribers added. However in India, the new subscriber list is higher than the number of handsets being sold which means that there is some level of exaggeration in the subscriber levels being done by the operators to increase their valuation."

"We feel that the Government or the regulator should do well to put in place an auditing system in place to check on the numbers being reported by the mobile operators," said Mr Yunus.

COAI response

Reacting to the report Mr T V Ramachandran, Director-General, Cellular Operator's Association of India (COAI), said that reports from China has also pointed out lower handset sales as compared to new subscribers added.

"This could be because there are subscribers who have two connections but only one handset due to high price of the devices.

"Therefore the conclusion that lower handset sales are indicative of exaggeration in the reporting by the operators is not entirely correct."

COAI also said as per Indian Cellular Association, number of handset sold were 32 million for the period January-December 2005 and 37 million for FY April 05 - March 06.

"It may be noted that the TRAI has reported 37.7 million mobile subscriber additions for the period April 05 to March 06.

Hence the handset sale and the subscriber additions seem to be more or less tallying," said Mr Ramachandran.

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