Telecom sector records lowest ever growth at 6.5 percent in last six years, says COAI

According to a study conducted by the GSM industry body Cellular Operators Association of India (COAI), the revenue of the telecom industry in India stood at 6.5 percent in 2015, which is the lowest since 2010. Even though there was an addition of 79 million new active subscribers since 2010, the revenue declined considerably due to various factors.

Commenting on the development, COAI’s outgoing Chairman and Managing Director of Idea Cellular, Himanshu Kapania, revealed that the industry performed reasonably well from 2010 in a consistent manner by delivering double-digit growth of about 10 percent. However, after years of consistent revenue growth, the revenue has dipped to 6.5 percent, which is a huge cause of concern despite severe push of reforms by the Government.

Kapania disclosed that there is a considerable decline in revenue from voice calls, which is mainly attributed to the emerging growth of text-based services like SMS and WhatsApp. The telecom industry has been aggressively investing in network expansion especially the addition of additional towers with a robust infrastructure to tackle the issue associated with call drops. Moreover, the carriers have slashed the data tariff by 20 percent and voice call rates by 10 percent respectively over the last two years.

Meanwhile, Kapania attributed the major drop in the overall revenue between 8 to 10 percent due to a decrease of interconnection charges from 20 paise per minute to 14 paise per minute, the decline in roaming rates and reduction in SMS rates.

Even though there is a huge growth in subscriber count and incredible volume expansion in minutes in Indian mobility sector, the mobile voice arena recorded negative to zero growth for the first time in the history. We hope Telecom industry will get a huge boost in 2016 with the expansion of network and the possible introduction of additional towers.

At the recently held event, Himanshu Kapania was replaced by Gopal Vittal, who works as Managing Director and CEO of Bharti Airtel India and South Asia as Chairman of COAI.

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