Pre-paid cellular phone user ratio declines

Card subscribers decline to 74% in 2004 from 80% year ago

The proportion of pre-paid cellular phone subscribers has, for the first time, decreased with those using cards accounting for 74 per cent of the total subscriber base at the end of 2004 as against 80 per cent in the previous year.

There were 48 million GSM cellular phone subscribers at the end of December 2004 as against 22 million at the end of 2003.

According to the Indian Cellular Benchmarking Study 2004, prepared by PricewaterhouseCoopers, 73 per cent of the subscribers in the metros use pre-paid cards. They account for 71 per cent of the connections in the A category circles and 79 per cent in the B category circles.

"The trend indicates that the market is maturing," said PWC Executive Director Deepak Kapoor in a presentation at the Cellular Summit 2005, organised by the Cellular Operators Association of India, here today.

According to company executives, a large number of subscribers start with pre-paid connections and shift to monthly bill plans that suit their needs. The share of pre-paid customers has been rising continuously from 26 per cent in 1999 to 53 per cent in 2001, and 63 per cent in 2002.

Though pre-paid cards continued to drive the new subscriptions, 59 per cent of the 35.5 million pre-paid cellular service users at the end of December 2004 had a monthly spend of less than Rs 250.

"Five per cent pre-paid subscribers do not make any calls from their phones and just keep it to stay connected", the study said.

On the other hand, only 19 per cent of the post-paid subscribers have monthly bills of less than Rs 250 and 31 per cent spend between Rs 2,000 and Rs 4,000 a month on cellular phone bills.

In terms of revenue from value-added services, for the pre-paid subscribers value-added services revenue as a percentage of the net service revenue was estimated at 8 per cent compared to 10 per cent for post-paid connections.

For the pre-paid users, the use of value-added services like SMS shot up from 3 per cent in 2004. For the industry as a whole, the value-added services revenue accounted for 9 per cent of the total revenue in 2004 as against 7 per cent in 2003.

A bulk of the value-added services revenue""65 per cent ""accrued to operators due to the use of SMS, while 8 per cent was on account of caller line identification. For the first time general packet radio service revenue assumed significance, the study said without disclosing the details.