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Inactive connections prompt revaluation of Indian mobile market

Up to 30% of Indian mobile subscriptions are technically inactive according to new analysis from Wireless Intelligence, making the country’s mobile market substantially smaller than previously believed.

The Indian regulator TRAI (Telecoms Regulatory Authority of India) has provided new figures which suggest that across the second quarter of 2011, around 250 million Indian mobile connections were redundant. Taking the inactive subscribers into account, the country’s penetration rate drops by 20% to around 48%. Active subscriber numbers are determined via TRAI’s visitor location register (VLR), which provides a temporary record of the areas that subscribers have roamed into.

India has around 850 million mobile connections, so TRAI’s figures would place the number of active subscribers at around 600 million. The country’s inactive subscriber base is therefore of a similar size to the entire markets of countries such as Brazil and Russia.

Wireless Intelligence senior analyst Joss Gillet noted: “The fact that the country's connection base is inflated by some 250 million inactive connections has dampened the growth achievements of many Indian operators, and clearly shows that further investments are still required to expand and improve network coverage.”

The revised subscriber numbers have come to light due to changes in the country’s legislation. In addition to compulsory SIM registration, prepaid services are cut off after a much shorter time if they register no activity. While prepaid users originally had a window of 180 days to top up their airtime or register an incoming or outgoing call, this timeframe was halved in 2010 and has now reportedly dropped to just 20 days.

The operators with the highest percentage of inactive subscribers were the state operator MTNL and Cheers Mobile, owned by Etisalat DB. Inactive subscribers made up around 65% of the total installed base for each of these operators. Meanwhile, the country’s biggest operators generally had a comparatively lower percentage of inactive subs – just 11% for market leader Bharti Airtel (which has a total of 169.2 million connections). Number four operator Idea Cellular boasts the lowest percentage, with just 8% of connections classed as inactive.

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