India's Mobile Ghosts

India crossed 800 million mobile subscribers in March 2011. Or did it? The reality is very different: 501 million users. Here's how

The story continues....and India once again takes pride in adding another 100 mn mobile subscribers to its kitty and reaching yet another milestone of 800 mn subscribers in a total population of 1.2 bn. According to the data released by Trai, the total wireless subscriber base of India at the end of February 2011 was 791.38 mn and taking into consideration the 20 mn monthly additions, the total mobile subscriber base would have easily crossed the 800 mn mark by March-end.

It certainly calls for celebration, but are we sure that the mobile phone penetration has crossed the 800 mn mark that we are so gung-ho about? The ground reality behind the calculation (see table) seems to be telling a different story. An unbiased and fair calculation could tell us where we stand right now!

VLR Does Not Lie

Trai's disclosure of the number of active wireless subscribers based on a visitor location register (VLR) number of 562.98 mn against 791.38 mn subscribers in Feb 2011, provides a clearer view on the subscriber number and other key operating indicators such as teledensity.

What the above VLR figure suggests is that India has around 501 mn active mobile phone users and not 800 mn. The 800 mn number (of subscriptions, not unique users) include over 200 mn inactive subscriptions “in the grace period”. The hitherto acclaimed subscriber number should ideally be called subscription numbers as it does not indicate the number of actual users.

 The VLR defined by the regulator is a temporary database of the subscribers, who have roamed into the particular area which it serves. Each base station in the network is served by exactly one VLR, hence a subscriber cannot be present in more than one VLR at a time. The VLR mechanism keeps track of the active users in any particular service area, and thus is the right method to calculate the number of active users.

“Obviously, 800 mn subscriptions does not mean 800 mn users,” says Kuldeep Goyal, ex-CMD, BSNL. He further adds that the actual number of active mobile phone users would be in the 450-500 million range and the 800 million user is not the correct market size.

“You have the latest VLR figure of Trai, which gives the number of actual active users as 560 mn for February 2011. From that you can reduce another 15% plus as multiple SIM cards,” he adds.

VLR data are calculated on the basis of active subscribers in VLR on the last working day (Monday to Friday) of a particular month.

“To say that the teledensity of India is 800 mn plus is misleading. We should go with the VLR figure of 560 mn plus. Even the VLR figure indicates the peak rate,if we take the VLR average, then the number could be even smaller,” says Deepak Maheshwari, telecom market expert and director, corporate affairs, Microsoft.