The ‘golden age’ of telecommunication nears its end in India

The ‘golden age’ of telecommunication nears its end in India

  • Data published by the Telecom Regulatory Authority of India (TRAI) shows that the user base of subscribers in India is finally shrinking.
  • Indian telecom companies had already been struggling with revenue due to Reliance Jio’s aggressive pricing strategies.
  • While some experts feel the reason may be that connection density in India is now at 88%, others believe it’s because users no longer have the requirement for multiple SIM cards.
There was a time when everyone would have at least two SIM cards and a Wi-Fi connection at home that came with its own home phone line. But, things seem to be changing with the telecommunications sector in India grappling with a shrinking user base.

Falling revenues has been a concern ever since Reliance Jio made its entry into the market with free calling and cheap data rates, but users growth had been exponential with it growing from 873.36 million to 1.14 billion over the span of five years.

That being said, it’s not all that surprising since telecom density is now at nearly 90%. Especially since every other operator, aside from Reliance Jio, seems to be growing smaller in terms of market share and market revenue.

Data published by the Telecom Regulatory Authority of India shows that wireless connections were already on a downward slope with consistent falls over the past few quarters.

The switch from voice to data

More than everyone having access to a phone with internet and network connectivity, the real trigger in the falling user base seems to be because users are switching over to data plans that are coupled with free calling.

Experts speculate that even the telecommunication companies are more keen to switch feature phone users into smartphone users rather than acquire new users altogether.

And, with the bigwigs consolidating the market by buying out smaller players, users have fewer options and alternatives when it comes to their call and data subscriptions.

Rainbow along the horizon

While the number of users may be shrinking, the prices finally seem to have have stabilised. Experts largely attribute that to Reliance Jio not making any disruptive moves. In the past, it’s the company’s aggressive pricing strategy, that’s been good for consumers, but a pain for other players in the industry.

And, with other market pressures building under the rupee’s depreciation and rising bond yields, it might not be so easy for Reliance, or any telecom company, to roll out freebies to its consumers anymore.

Experts predict that some companies might even go so far as to re-introduce separate plans for data and voice calling.