Indian Telecom sector started witnessing turbulent time post 2G scam. The entry of additional service provider added fuel in fire by escalating tariff war. It resulted in deep recession in Telecom sector. The incumbent private service provider lost major ground to regional and challengers in all circles. It prompted Incumbent to introspect their service offering and area of concern which resulted in fall of revenue attributed by multiple factor. The MNP regulation was used by low earning subscribers as a tool to get the freebies from competitors and get the communication service literally free of cost. The tariff war and easy way to get the connection offered subscribers a way to acquire multiple connections to avail lower tariff from multiple service providers. It also helped them to bypass roaming charges while being on other service geographies of service provider. The revenue sucking environment prevailed for more than year till 2G scam surfaced. The speedy trial and greater scrutiny of subscriber address forced many subscribers to stop using multiple connections. The sudden changes in regulatory environment dramatically increased non active subscriber base. In FY11-12, the VLR active subscriber base stood at 30-32% of total subscriber base. Post license cancellation by Supreme Court, the incumbent got an opportunity to realign their strategies to get back their lost subscriber base through multiple point of action. The decision initiated major write off of non VLR active subscriber and subsequently total subscriber base started going down steeply in first half and early second half of FY12-13. Bharti Airtel, Reliance communication, Vodafone, Tata and Idea shed out around 50 Million non-active subscriber base whereas Aircel, Uninor, Videocon and other lost millions of subscriber due to the license cancellation. The unexpected move by Incumbents took everyone by surprise and all analysts scrambled to re-access the growth potentials in Indian Telecom sector. The government also struggled to project their India Telecom growth story afloat. During all these period, I failed to see any write down by government PSU telecom players. The TRAI Feb 2013 subscriber data clearly indicates the same. In Feb 2013, Indian wireless sector again started showing net positive subscriber addition which also includes positive net addition by major PSU Telecom Company. On detailed analysis of VLR active subscriber base, it is evident that PSU company VLR active subscriber % is only 54.17 of their 100.6 Mn subscriber. The incumbents VLR active % are running at higher than 93 % and current VLR active subscriber base is 712 million out of total subscriber base of 862 million. It translates to a conclusion that PSU contribution in non-active subscriber base is currently running at 30.5%. Based on the TRAI directives and release of number, incumbent were directed to indicate non VLR subscriber data as well as to initiate the clean-up process. The non-initiation of process by PSU might be a reason to keep the Indian wireless sector growth story intact. I believe that proactive approach by PSU to clean up the non-active subscriber base would bring down Indian wireless sector subscriber base by another 7-8% to 820 – 840 Mn range by the end of FY13-14
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