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Reliance Communications sees sharp fall in active users after 4G upgrade

Reliance Communications Ltd, the telecom arm of the Anil Ambani group, has reported a sharp fall in its active user base (VLR) for the April-June quarter.

BEFORE UPGRADE

RCom had 93.24 mln active users — going by the company’s visitor location register — for the January-March quarter, before the 4G upgrade began. The total subscriber base of the company, including switched off users, was 103.6 mln at the time and 90% of the total subscribers were registered on VLR, indicating that they were switched on and active.

Out of these total 104 mln RCom subscribers, around 24 mln were CDMA subscribers.

In May and June, RCom shut down its CDMA service and tried to move as many of its CDMA users to its 4G GSM network.

AFTER UPGRADE

According to its latest filing, while the total subscribers of the company has declined only slightly, the number of active (VLR) users has fallen drastically.

Total subscribers on the network fell only marginally, going from 103.6 mln at the end of March to 99.9 mln at the end of June, indicating that most of the users are being counted as migrated to 4G.

However, to be counted as active users according to VLR data, these subscribers must then insert their new 4G SIM into any GSM handset and use it. If they don’t, then the VLR subscriber number falls.

RCom’s VLR subscriber percentage has fallen to 72.5% in June — when the 4G upgrade happened — from 89.1% in May.

Thus, the switched on active users in RCom’s network fell from 93.2 mln (90% of 103.6 mln) at the end of March to 72.4 mln at the end of June.

Though this shows a decline of about 21 mln users, RCom has written off only 1.1 mln subscribers in May and 2.7 mln subscribers in June according to TRAI data.

However, the TRAI data does reflect the sharp decline in the number of active VLR subscribers.

While the percentage of active subscribers on Reliance Communications’ network remained largely the same from April to May (slipping only slightly from 89.5% to 89.1%), it shows a sharp drop in June, when it fell from 89.1% to 72.5%.

rcom-vlr-may

rcom-vlr-june

While it was never expected that all the CDMA subscribers would move to the GSM network, there was still a chance that a substantial chunk of them would.

For now, the company seems to be unwilling to write off the upgraders even if they are not ‘switched on’ and is choosing to take a hit on the VLR statistics instead of on subscriber number statistics.

It is possible that the company’s VLR numbers will start climbing back due to in-roaming from Reliance Jio’s network. VLR includes all subscribers, including in-roamers.

Jio and RCom have an intra-circle roaming agreement under which Jio subscribers can use RCom’s 4G network. Jio, on its part, is reportedly adding 3-4 mln subscribers every week.

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