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RCom’s voice subscribers fall 30% in one year on VLR count

rcom-4gAnil Ambani Group’s Reliance Communications has seen a sharp fall in its subscriber numbers after the migration of its CDMA network to LTE.

According to the latest numbers released by the company, the total number of voice customers fell by 11.6% in the three months from June to September. Voice revenue fell 8.3% from the previous quarter.

If we compare the September subscriber number with the same number a year ago, the fall is 21%.

But these numbers only reveal part of the picture, as RCom includes non-switched-on users also in its subscriber numbers.

However, many people who have been moved to 4G are not switched on because they either don’t have any 4G phones or they are not interested in the company’s plans.

If we look at switched-on users, also known as VLR users, then the fall is even more drastic.

In Sept 2015, RCom had 108.3 mln switch-on, or VLR users. This year, that number has fallen to 76.2 mln, a decline of around 30%.

The company has always maintained that it did not lose any subscriber that it did not want to lose, when it shut down its CDMA network and switched to 4G.

Indeed, many CDMA users belonged to the lower strata of telecom subscribers, and did not generate much revenue for the company.

DATA USERS

While the loss of voice CDMA users may not be a big worry, what should worry the company is the loss of high-speed (3G and 4G) data users since it launched its 4G service in June.

In the June quarter, the company had 25.4 mln 3G and 4G users. Three months on, that number declined to 24.5 mln.

For comparison, during the same three months, Idea Cellular’s 3G+4G subscribers increased from 27 mln to 30.7 mln.

Part of the reason for the loss of high-speed subscribers is the launch of Reliance Jio. Since both companies use the same network, many would simply get a Jio SIM, which offers free services, instead of using RCom’s SIM.

The Jio impact was limited during the July-September quarter because of difficulty in getting the operators’ SIM cards. Since those difficulties were resolved in October, the current quarter (October to December) is likely to see the full impact of Jio’s free service on RCom’s 4G service.

Secondly, the earlier quarter had seen many RCom users getting free 4G data as part of the migration, but the number of users eligible for free data went down drastically in the last quarter.

Out of the total 24.5 mln 3G and 4G users, about 21-22 mln are expected to be on 3G and the remaining on 4G.

RCom will announce a new set of tariffs, but only after its merger with Aircel is completed sometime in early 2017. It is likely to become a serious contender in the 4G market after that.

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