The average revenue per user (ARPU) for telecom companies fell in the first quarter of the current financial year, hit by a fall in user additions and tariffs.

Migration of low ARPU users to existing operators and social media taking over voice calls were the other reasons.

The ARPUs for GSM operators fell by about 2-2.5 per cent and that of rival CDMA players were lower by about 1-1.3 per cent in the quarter ended June 30, 2012. The blended ARPUs for GSM players hovered at Rs 95 during the quarter under review and that of CDMA was at Rs 74, industry analysts told Business Line.

The ARPUs, a metric to gauge the financial health of a telecom company, had recorded a rising trend in the quarters ended December and March after declining constantly over the past five years. The metric, which had constantly declined over the past five years, fell below the Rs 100-mark last year.

“The Minutes of Usage (MoUs) during the quarter were lower compared with the previous quarters due to a dip in net subscriber additions. Additionally, a fall in tariffs led to lower revenues per minute,” Ankita Somani, sector analyst at Angel Broking said.

Why ARPUs rose earlier

“The rise during the previous quarters was due to an increase in tariffs, slash in 3G prices and the number of vouchers launched by these companies.

However, new vouchers that will bring in higher MoU would be launched only after the existing vouchers are exhausted,” Somani added.

According to a Mumbai-based analyst, ARPUs of GSM operators Bharti Airtel and Idea Cellular declined by 2.5 per cent each, while that of Reliance Communications – which offers both CDMA and GSM services - fell by about one per cent.

It is the Telecom Regulatory Authority of India (TRAI) that normally collates this data, including that from unlisted firms such as Aircel and Tata Teleservices Ltd.

The regulator is expected to release the data by mid-September.

ARPUs, a measure of the revenue generated from one customer per month, fell also due to subscribers moving from new to existing operators.

“These were low ARPU users. Apart from this, the substitution effect in voice – with subscribers opting for social media and instant messaging in place of calls – were the other reasons,” Gartner Research Director Kamlesh Bhatia said.

The industry expects ARPUs to be under pressure for the rest of the fiscal year, Bhatia added.

(This article was published on August 17, 2012)
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