The Telegraph
Since 1st March, 1999
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Cellular baits for post-paid switchover

New Delhi, Aug. 5: Cellular operators have cobbled a slew of crossover plans to persuade pre-paid subscribers to cross the Rubicon and become post-paid users.

The crossover plans — which carry no rentals and no processing fee giving subscribers a longer airtime — have been prompted by a desire to stop an alarming trend: the shrinking of the post-paid subscriber base.

“During the quarter ending March 2003, the (post-paid) subscriber base declined by 5.5 per cent,” says the first report of the Telecom Regulatory Authority of India (Trai) on performance indicators of the Indian telecommunications industry in 2002-03.

At the end of December 2002, there were 22.48 lakh subscribers on the post-paid platform. It has since dropped to 21.05 lakh at the end of March 2003.

“It is not only the market share which is going in favour of the pre-paid platform because new operators are opting for pre-paid schemes, but the subscribers are (also) shifting from the post-paid to the pre-paid platform,” says the report.

“The pre-paid subscriber base grew 13.44 per cent during the quarter ending March 2003,” the report adds.

The cellular operators claim that the new post-paid schemes are aimed to lure the first-time cellular subscribers from pre-paid schemes.

The Trai report says one reason for the stampede out of post-paid schemes is the high rentals that the subscribers have to pay.

That is why two of the leading cellular operators — AirTel and Hutch — recently launched two post-paid schemes without rentals, while Idea claims that these two operators are following its trend.

Manoj Kohli, president mobility, Bharti Tele-Ventures Ltd, said, “Around 20-30 per cent of the new mobile users end up choosing pre-paid plans since they are not confident of the usage. We want to change this trend and draw them to the post-paid schemes.”

The Trai report has also pointed out that the post-paid rentals per subscriber increased by around 6.94 per cent. In the metros alone, there has been a spurt in rental per subscriber by 40 per cent.

Rentals in A, B and C circles have risen by 3.66 per cent, 1.34 per cent and 2.30 per cent, respectively.

A senior Trai executive said, “This is an indication that the operators who have felt the need to stop the churn are now announcing tariff plans to bring back the deserters and also to ramp up the post-paid subscriber base. Pre-paid schemes have captured around 72 per cent of the all-India cellular market share.”

There has been a 13 per cent fall in the average rate per user (ARPU) for the cellular market. However, the ARPU for the post-paid platform increased by 0.30 per cent. The ARPU for pre-paid subscriber base dropped by 18.12 per cent. The report says the decline can be due to the free incoming call regime that has been introduced early this year.

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