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Chart: ARPU vs Minutes Of Use For India’s CDMA & GSM Mobile Base – March 2007 to September 2012

Between March 2007 and September 2012, the Average Revenue Per User (ARPU) for India’s CDMA mobile users declined by 61.5% whereas the decline in the ARPU for GSM mobile users has been 68.1%. The minutes of usage per user (or connection) for GSM has decreased by 27.38% while CDMA users reported a decline of 52.22%.

Note that ARPU as a metric has become irrelevant because of multi-SIM usage and inactive connections. The split between GSM and CDMA operators, in terms of active-inactive users, is not known.

Observations:

–  Minutes of use for CDMA users has declined more than that for GSM. It’s also worth noting that except for a peak in 2008, the minutes of use for CDMA users has been showing a decline since 2007 and has continued to decline till September 2012. However, after being the lowest in June 2011, the  ARPU has been showing a slow but steady increase touching its highest in September 2012. It seems that the minutes of use have continued to decline irrespective of the rise or fall in ARPU.

CDMA

 

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– Note that after the 2G spectrum allocation in 2008 at throwaway prices, the minutes of use began to drop drastically from December 2008, finally steadying again in September 2011. During that period, ARPU declined by 42.1% and minutes of use decline by 30.7% for CDMA users, while the ARPU declined by 57.7% and minutes of use declined by 33.3% for GSM users. The decline could be attributed to the tariff war that took place during that period, which saw increase in multi-SIM usage pattern.

– It’s interesting to note that after a steady fall from 2007 to 2010, the ARPU for GSM connections has more or less remained steady since 2011, even after telcos increased their tariffs multiple times during the period. It is also worth noting that the minutes of use has been increasing from November 2011, even with the ARPU being more or less constant.

– Since February 2012, when the Supreme Court cancelled 122 2G licences issued in 2008 spectrum allocation, both minutes of use and ARPU have remained more or less constant for both GSM and CDMA users. This could mean that consumers are consuming services as per their personal requirement irrespective of the tariffs set by the telcos. There may be a demand for these services irrespective of their pricing.

 

GSM

Data Source: TRAI

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