Paradigm Shift from Voice to Data Services in the Indian Telecom Sector

Indian telecom market is the second largest telecom market in worldin terms of the number of telecom subscribers¹. According to the recent reports by Telecom Regulatory Authority of India (TRAI), Indian telecom sector has the lowest tariffin the world². Indian telecom market has got more than 10 service providers striving for the market share in the 14 circles at any point of time. Intense competition to grab subscribers has put pressure on service providers to reduce tariff prices at which the subscribers are charged. India being a developing country, people are more bothered about the out of pocket expenses for the telecom services, because of whichthe telecom service providers (TSP) have come up with charging plans on a per second basis in addition to the conventional pay per minute charging model. This is in accordance with the implementation of pay per use tariff concept. Recent studies in the Indian telecom scenario have shown growth in the number of subscribers but at the same time the average revenue per user (ARPU) has been falling down consistently. Average revenue per user is one of the key performance indicators of market performance of the service provider. Here, it is quintessential to understand the various factors which affect the average revenue per user so that the Telecom Service Providers can formulate new strategies to increase their average revenue per user.