In mobile penetration, press 1 for Chennai

The city is far ahead of the other metros.

Chennai, often an afterthought in the list of metropolitan cities, has emerged at the top in a study of mobile phone penetration by the Cellular Operators Association of India, or COAI.

The number of mobile phone subscribers as a percentage of the city’s population is the highest here, at 111 per cent, which means a fair number has more than one mobile phone.

Mumbai is a distant number two with 90 per cent, followed by Delhi at 83 per cent. The fourth metro, Kolkata, is way behind with 67 per cent.

The four metros account for 16 per cent of the country’s mobile subscriber base, but 25 per cent of the total revenue. That means their residents use their phones more and pay fatter bills than subscribers elsewhere in the country. This is the user profile that rings a bell for mobile phone marketers.

The data will also provide the handful of service providers that are joining the fray in several cities more food for thought.

The data is based on overall mobile subscriber figure for February and includes both GSM as well as CDMA users.

Operators say that in Bangalore (separate data on subscriber numbers is not available for the city as it is part of the Karnataka circle) would be around 80 per cent.

“Chennai had started as a very conservative city, with consumers reluctant to have a mobile. But it has changed dramatically in the last few years, which is reflected in the fact that there are a lot of people who have more than one mobile phone,” says T V Ramachandran, COAI’s secretary-general. He adds that the churn, the migration of subscribers from one service provider to another, has been even.
   

METRO TELEDENSITY
	Total population mn	DEC 08	FEB 09
	total wireless	wireless teledensity	total wireless	wireless teledensity
Chennai	8.1	8.67	108%	8.93	111%
Delhi NCR	25.4	19.84	78%	21.02	83%
Kolkata	16.6	10.34	62%	11.15	67%
Mumbai	20.9	16.93	81%	18.74	90%

Telecom companies say that the numbers reflect new challenges, especially for the new operators that are launching services in these cities. They have only two choices, either to wean away customers from other operators or ensure that consumers get hooked on to a second phone.

Says a senior executive of a leading telecom company: “New operators face a tough challenge to get new consumers, especially with three to four new players coming in these cities. The problem has become bigger because the churn rate in the country is actually coming down or is stable (it is at 3.4 per cent currently).”

Add to that rock-bottom tariffs and there is very little scope left.

For incumbents, too, there are new challenges-how to push up average revenue per user which has been falling in the metros. Because with the market already saturated the best way to increase revenue is to ensure that customers spend more.