Indian telephone use declines for the first time

The number of telephones being used in India fell for the first time in July as the growth of mobile subscriptions begins to taper off after years of stellar performances.

At the end of July the number of telephone subscribers in India fell to 944.81 million from 965.52 million a month earlier, according to figures released by the Telecom Regulatory Authority of India (Trai).

This decline was led by the wireless sector, in which subscriber numbers fell by more than 20 million.

The sharp drop was partly triggered by strict government guidelines on allocating new numbers, which is forcing operators to deactivate millions of accounts that have not been used for 60 days or more.

"They were running out of numbers because we're now going into billions, so there was a real crunch on telephone numbers," said Rajan Mathews, the director general of the Cellular Operators Association of India.

Another factor is the Supreme Court's cancellation of 122 second-generation, or 2G, licences this year, which prompted Etisalat to leave the Indian market completely, while the operator Uninor has been reducing its footprint. The licences were issued to companies in 2008 but were cancelled because of a corruption scandal surrounding the sale of the licences.

"With the new entrants that came in 2008, a lot of folks took multiple [Sim cards]," said Mr Mathews. "When some of these businesses got their licence cancelled, a lot of people then gave up the sims that they held with these companies."

But there has also been a wider drop off in the mobile phone sector, he added.

"There has been a general slowing down as a result of the general uncertainty on the economic front and general policy uncertainties and regulatory activities," he said.

The Trai said the latest figures showed a decline in the overall subscriber base in India's telecommunications industry for the first time, the Press Trust of India (PTI) reported.

Reliance Communications (Rcom), which suffered the biggest drop by far, losing almost 20.5 million users in July, cited the cancellation of inactive users as the reason for the slump.

"With an objective to release the substantial blocked resources of number series and in context of [the department of telecommunications'] stringent guideline on the issuance of fresh numbers, Rcom has decided to deactivate the inactive paid subscribers who have not had any usage in the last 60 days," the operator told PTI, an Indian news agency.

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