Telecom companies disconnect inactive subscribers

Telecom companies disconnect inactive subscribers

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After an earlier warning, the Indian mobile phone companies which are being led by Reliance Communications and Tata Teleservices have deactivated many inactive subscribers from their phone numbers. The telecom companies have now lost around 43 million subscribers, which accounts for almost 5% of their stated customer base during the second half of 2012.

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After the increased allotment of precious radio-waves which are no longer linked to subscriber addition, the telecom companies have started dumping inactive subscribers to unclog their systems and also reduce costs. Sivarama Krishnan, the executive director of consultancy Price Waterhouse Coopers India said that “industry wide, operators would be able to save costs amounting to about 2% of their revenues, somewhere around 300-400 crore”.

An analyst from another consultancy said that an operator spends at least $0.034 per day for it to offer continuous service to an individual. This accounts to about $12 per year. The figure has been calculating with the assumption that the subscriber spends around $100 on capital expenditure to create a network capacity for every customer.

Till the year 2012, the policy of the government was to allot an additional spectrum to handle the need for growing customers, which was based on the number of subscribers added. This resulted in many operators offering numbers at minimum costs, some of them for free in the year 2009.