The company, which offers mobile and wired telecom services in Maharashtra, Mumbai and Goa saw its mobile users fall to 69.8 lakh (6.98 mln) on September 30 from 72.4 lakh at the end of August.
The decline comes at a time when the company is surrounded by rumors of an impending shut down as the Tata Group attempts to exit the loss-making telecom business.
On Monday, the company said it had not made a final decision about whether it will close down its operations or explore other options.
The company “continues to explore all options in respect of its business, given the challenging business environment in the telecom industry. At this stage, Tata Teleservices has not made any firm decision on the way forward for its telecom business,” it said.
Tata Tele used to be, at one time, among the top providers of wireless data services on its CDMA platform.
However, with the emergence of cheaper and more efficient technologies such as 4G, the company has been unable to hold on to its market share as prices have crashed.