Global mobile penetration and subscriber numbers

Wondering how many mobile subscribers are there on planet earth??? Well by end of December, 2012 global mobile subscriptions were around 6.3 billion, growing at about 9 per cent year-on-year - as per a report by European telecom equipment maker Ericsson. According to the Ericsson Mobility Report, total mobile subscription in China stood at 1.26 billion, while in India it was 713 million in 2012. The net additions in the fourth quarter of 2012 were 140 million.

So what is Global wireless tele-density. Well, Global mobile penetration reached 89 per cent in Q4 2012. However if you looking for unique users figures, the actual number of unique users were around 4.4 billion, thanks to people having several subscriptions. 

If you are wondering which countries are adding most subscriptions, then the report answers your query. China accounted for about 22 per cent of net additions, adding around 30 million subscriptions, followed by India (11 million), Bangladesh (9 million), Indonesia (8 million), and Nigeria (5 million).

As far as mobile broadband subscribers are concern, In Q4 of 2012, mobile broadband subscriptions grew 125 million to 1.5 billion, reflecting a 50 per cent year-on-year increase. GSM, GPRS and EDGE subscriptions grew 44 million and WCDMA and HSPA grew 70 million. Together these technologies represent 80 per cent of total net additions. That apart, LTE subscriptions grew from 14 million to 57 million in 2012

GSM subscriber figures for Feb 2010 in India

I have never believed in these figures. But for sake of those who follow this blog, here are latest GSM customer acquisition figures in India.

As per data provided by the GSM operators' lobby Cellular Operators Association of India, the GSM mobile user base in India touched a little over 400 million (407 million). The country's GSM mobile subscriber base has increased by 13 million to 407 million in February, with Vodafone Essar adding the maximum number of new customers in the past month. This is, however, less than the total addition of 14.4 million users in January.

The country's second largest GSM player Vodafone Essar added as many as three million customers in the past month, closely followed by Bharti Airtel. Vodafone Essar's touched an user-base of 97 million. Airtel added 2.9 million users last month against 2.85 million in January taking its total mobile user base to 124 million. Bharti has a market share of 30.55 per cent, while Vodafone Essar has 23.84 per cent. Aditya Birla's Idea Cellular added 2.25 million new users during the month, taking its total subscriber base to 62 million. It has a market share of 14.96 per cent.

State-run BSNL and private operator Aircel added 1.5 million and 1.8 million new users respectively in the month with their user base at 61 million and 34 million each. BSNL's market share reached 14.96 per cent. The major gainer in the month has been MTNL which added 86,706 new users in February from 45,067 in January.
(Note - Figures are courtesy TRAI reports and Economic Times news)

Justifying tele-density in India ? Are the numbers reported by Indian Telcos inflated?

In some of my older posts, I have shown my concern on the numbers reported for users of mobile service in India. For example with entry of DoCoMo on Indian scene, the numbers Tata reported to have added last month was more than 3 million. Bharti & Vodafone continue to claim the same number of addition that they were claiming in new month. Strangely it means that with entry of new operators the existing will not loose market share. Somewhere fundamentals of economics have been defied. In other words the teledensity in India can reach 100% in ayear or so, if 10 more new operators join, as they will each add 2 to 3 million connection without decrease in the number of additions by existing operators. WoW! It seems the tele density figures in India need to be justified some how.

Recently in one of the articles published in ET,findings of a survey by online market research company JuxtConsult were reported. It says - One out of every three (57 million) urban mobile users in India now own two or more mobile connections. Believe it or not. After all this is a survey. JustConsult claims that it's the first time an estimation on the size of this segment has been attempted, as none of the industry associations––Cellular Operators Association of India (COAI) and Association of Unified Service Providers of India (AUSPI)––or sector regulator Telcom Regulatory Authority of India (Trai) have any estimation of the number of multiple connections per user.

Understanding the size, composition and motivations of this huge segment of mobile users is critical. It is needed by mobile operators in designing their marketing plans. It is also needed by handset makers and department of telecom (DoT), which is in a fix as to estimating the true teledensity of India. JuxtConsult's estimation of mobile connections in the country (till July) at 343-million is lower than TRAI's estimates of 441.6-million (August). JuxtConsult attributes the difference between its estimate and TRAI numbers to many inactive connections. Says Sanjay Tiwari of JuxtConsult: "The discrepancy is also because about 15% of reported additions by mobile operators and their associations are inflated." There are credible reasons behind operators inflating subscriber numbers. Market cap, valuation and spectrum allocation based on number of subscribers are key reasons along with the pressure to cut tariffs. It also helps attract subscribers to one's own network. A new user is likely to join a large operator as network calls come cheap.

ET also reported that the government suspected that all operators were inflating their customer figures by about 15-20% and that the DoT is planning to monitor the user base of all telecom operators to ensure that operators do not inflate subscriber numbers to grab additional spectrum. Well all this will be sorted out shortly - I hope! For the time being Justconsult deserves appreciation for trying to help in profiling the multiple user customer, whose average age largely falls between 25-35 years. According to the survey, Delhi and the national capital region account for over one in ten of all 57-million MCMU’s at 12% of the total base followed by Mumbai (8%), Bangalore (7%) and Chennai (6%). Most are actual genuine connections.

The survey, also for the first time, makes a distinction between a user and a connection, hitherto taken as one in reporting India’s teledensity and average revenue per user. As reported by ET - According to Rajat Mukherjee, chief corporate affair officer at Idea Cellular, about 20% of all telcos’ customers carry more than one SIM. The carried / thrown in dustbin SIMs remains to be distinguished

JuxtConsult’s India Mobile 2009 estimates are based on a very large sample data of around 285,000 urban and rural Indians, covering all states and union territories––574 districts, 3,175 towns and over 2,800 villages. With at least 30 plus sample each from 323 districts and 419 towns, and 100 plus sample each from 184 districts and 155 towns, the study is one of the most representative, independent enumeration of mobile phone usage in India.

With over two mobile connections per user (2.4) amongst multiple connection mobile users (MCMU), this segment account for a majority (59%) of all 235-million odd urban mobile connections. JuxtConsult’s survey did not estimate MCMU numbers for rural India. TOO MUCH TOO SOON !!

With increased urbanisation and migration from distant parts of the country to the cities, long distance calling has been on the rise across the country. ET reports that Airtel will also soon be launching a family plan where in three members of a family can buy Airtel postpaid connection but pay rental for only one. This plan is justified by the survey which shows that joint families have the highest ownership of mobile phones, with about 65% of their members owning more than one connection.

The socio economic class (SEC) A & C mobile users show higher tendency to have multiple connections, says the survey. Migrant workers and youth form a large part of the target audience. This push is also having an impact on more Mobile phone sales and launch of newer models. Sunil Dutt, country head, Samsung Mobile says he is seeing a rise in sales of Samsung’s dual mode GSM/GSM and GSM/CDMA handsets. While Nokia and Sony Ericsson don’t have such phones in the market, Spice Mobiles, has 50% of its portfolio as dual SIM phones. Such phones contribute a good 80% of the company’s revenues, says Kunal Ahooja, CEO, Spice Mobiles. The survey says that about 41% MCMUs need another spare handset for ease of use. But switching between GSM and CDMA handsets is cited as a reason by 30% buyers.

Growth in Indian rural tele-density not an easy task - says E & Y !

Research firm Ernst & Young (E&Y) has said while the government and private operators continue to push for rural telephony, its proliferation in the hinterland will be faced with many challenges. “The cost of delivery is likely to be high in view of the specifics of the Indian reality. Hence, connecting rural India would mean incurring a much higher cost per subscriber to capture low ARPU subscribers,” said E&Y telecom industry practice leader Prashant Singhal.

Telecom operators may be banking big time on the untapped rural markets for the next wave of growth, but the number of connections in hinterlands will not increase beyond 150 million by 2011, according to a study. “Mobile connections in rural geographies will be constrained by coverage of network infrastructure and affordability of handsets which will limit consumption,” London-based Centre for Telecoms Research (CTR) has said. The government has set a target of 500 million cellular connections by 2010 and DoT expects a fifth of these will be in rural areas. While operators are rolling out extremely low-cost handsets, industry analysts feel driving usage in rural areas will not be easy. Network management itself remains a challenge in the difficult terrains and this is topped with erratic power supply leading to high genset costs. The main stumbling block in rural areas is the high cost of building infrastructure versus low revenue opportunity. However, government initiatives like the Universal Service Obligation fund (USOF), shared infrastructure and managed network services would help to address these issues. All operators contribute 5% of their revenues to the USOF, used to provide rural telephony. Recently, the government has finalised contracts for setting up 8,000 towers in rural India with support from USOF. This is expected to help the government in providing an additional 50m connections in rural India. Currently, the rural teledensity is nearly 2% while urban teledensity is over 40%. This hyper growth in urban areas will also make things difficult for operators going forward. The CTR study expects urban populations of India to reach high levels of mobile phone saturation in the next five years, to the extent where many phone users will have two or more handset connections. A large portion of this growth will arise from pre-paid connections, driven by the increasing affordability of handsets and tariffs amongst India’s lower middle classes. “The phenomenal growth in the Indian mobile phone market has largely been driven by urban consumption. We expect this to continue with urban geographies achieving saturation levels similar to current Western European markets in the next five years,” said CTR research director Raj Modi.