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Cell users talk more, pay less in India
By agencies
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Friday, 17 June 2005, 19:30 IST
NEW DELHI: Mobile phone users in India talk a lot more than their Chinese counterparts. But, the average revenue per user (ARPU) in India continues to be much lower than that in China.
This indicated that fierce competition in the cellular sector had slashed mobile tariffs to a greater extent in India than in China, said a Telecom Regulatory Authority study.
In 2004, Indian mobile phone customers used their phones for an average of 330 minutes a month, compared with 297 minutes by Chinese mobile phone users.
The usage patterns of both pre- and post-paid customers in India were higher than that of their Chinese counterparts, the study said.
The ARPU for Indian cellular operators was $9.04 in 2004, while Chinese telecom companies generated $9.69 per user a month, the study said.
For landlines, the study said that India's ARPU of $15 was higher, against $9.14 for China. The competition in the landline segment in China is more intense than it is in India.
According to Trai, there is a stark contrast in the subscriber bases of the two countries. China had 325.40 million landlines and 349.10 million mobile phone users, compared with 45.01 million and 52.21 million, respectively, in India.
"China has limited competition, but the Indian mobile market is fiercely competitive. The operating expenditures (Opex) for basic and mobile services are higher for Indian companies," it said.
High salaries, and expenses on advertisement and license fee, were the reasons for higher Opex for Indian companies, the study noted.
Regulatory levies are much lower in China. There was almost nil license fee and spectrum charge, which resulted in lower Opex for Chinese companies, the study added.
In China, the mobile sector accounted for 42.69 percent of revenues, landlines for 31.31 percent, long-distance traffic for 19.46 percent and Internet for 6.26 percent.
In India, however, mobile services contributed 23 percent, landlines 68 percent, long-distance calls 6 percent and Internet services 2 percent, the study said.
Capital employed in China for the basic segment "was almost half of what had been employed in the Indian market, but it was almost similar for the mobile segment". The study said higher capacity-utilization was one of the reasons for this.
Chinese telecom operators were also found to fetching much higher returns on capital employed. This, again, was because of lower Opex and higher ARPUs, the study said.