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Cellular operators may weed out dormant subscribers

This is something that would have been perceived suicidal only any year ago.

Other cellular operators who have not been so harsh are actually reporting as much as 25,000-30,000 subscribers less.

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This is because cellular companies have informally agreed that only active subscribers should be reported for purposes of levy of the Rs 6,023 per annum license fee per subscriber payable by an operator to the government.

If this arrangement is not recognised, one could well see these non-active users shown the door.

The latest mantra is to ensure that only those subscribers remain who bring in enough revenue to at least recover the cost incurred by the operator on them.

From November onwards, metro cellular operators who are now in their fourth year of operation have to pay the government licence fee to the extent of Rs 6,023 per annum per subscriber.

In return, all they get as fixed revenue from the subscriber is Rs 156 per month. The extent of losses the operator suffers depends on the extent to which he uses the phone.

In a frantic attempt to bag a large number of potential users initially, operators had gone all out to enrol just anyone.

This led to rates being brought down and attractive packages being offered to lure almost everyone to hold the handset.

What happened is well documented. Thousands of consumers rushed to pick up the phone. It was no longer necessary whether it was needed or not, for it was a status symbol. This resulted in several subscribers barely using the facility.

With the licence fee payment per subscriber norm coming into place, operators can just not afford to have passive subscribers. While some are shedding such subscribers, others have some more time, thanks to the informal agreement being worked out with the Cellular Operators Association of India.

As per this, an operator will, for purposes of reporting the number of subscribers to the government, only take the average active user into account.

This has itself led to the reported figure of subscribers being as much as 25,000-30,000 less for some operators.

As of now, these passive users are still on board the operators' subscriber base, but if the agreement is not recognised they could well be shown the door as well.

The realisation has dawned that it is not just numbers that matter but also enrolling only such subscribers that actually use the facility. Fascel, the operator for Gujarat, has, in the past six months, asked 10,000 subscribers to leave. Despite this, it has managed to touch the 50,000-subscriber base and has one of the highest revenue per subscriber base in the country.

A source close to the operator has confirmed that the subscriber base has been reduced to weed out the non-serious users.

BPL Mobile and Hutchison Max, the two cellular operators for Bombay, too have started putting in place stringent credit risk management systems in place to enrol only the serious users, sources claim.

"Its imperative now that while we tackle the existing lot of non-active subscribers it is also critical that we do not add any more such subscribers to our base," a cellular company executive pointed out.

- Compiled from the Indian media

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