The Average Revenue Per User (ARPU) for telecom companies has started moving up for the first time in many years.
According to the Telecom Regulatory Authority of India, operators got Rs 100 a month from each user on an average during the September- December 2011
quarter compared with Rs 98 in the previous quarter.
Though the increase is marginal, this is good news for telecom companies that have been dealing with declining revenues for the past two years.
ARPU is one of the key factors used to determine the health of the industry. This number has been constantly declining over the past five years to fall
below the Rs 100-mark last year.
Mr Mohammad Chowdhury, Leader Telecom, PwC India, said, “It is encouraging to see ARPU going up for cellular operators, by almost 3 per cent for GSM
service providers. Since minutes of use have remained stable, this reflects a slight uptick in average revenue per minute, probably a result of the
tariff increases seen in the market some two quarters ago.”
“This is encouraging since it reflects increased stability in tariffs at a time when operators have struggled to maintain profitability,” he said.
Mobile companies had increased tariffs by 25 per cent in a bid to improve its margins. The industry had got itself embroiled in a financial mess after
new players dropped tariffs to one paise a second in 2008. Although incumbent players followed suit initially, they increased the tariffs last year.