Share of postpaid subscribers may increase by 12% for Indian telcos in FY23

According to the report, the sector's postpaid ARPU is estimated to have declined to about Rs 245 in fiscal 2023 from about Rs 275 in fiscal 2021

IANS Chennai

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The mobile phone industry is expected to see the postpaid subscriber base touching about 12 per cent in FY23 owing to recalibration of tariffs, unlimited 5G data, wider range of over-the-top (OTT) content and the gap between postpaid and prepaid average revenue per user (ARPU) narrowing down, said CRISIL Ratings in a report.

The share of postpaid subscribers in overall wireless mobile subscribers is expected to rise about 12 per cent this fiscal, aided by the recent recalibration of postpaid tariffs by telecommunication companies (telcos), CRISIL said.

"Unlimited 5G data and access to a wider range of over-the-top (OTT) content offered by select plans under the new tariffs, along with narrowing gap between postpaid and prepaid monthly average revenue per user (ARPU), would be the key enablers for postpaid subscription," the report notes.

According to the report, the sector's postpaid ARPU is estimated to have declined to about Rs 245 in fiscal 2023 from about Rs 275 in fiscal 2021.

Meanwhile, prepaid ARPUs moved up to about Rs 170 from about Rs 130, thereby reducing the gap between postpaid and prepaid ARPUs by almost 50 per cent, over fiscals 2021-2023.

This has led to an increase in the share of postpaid subscribers by about 300 basis points to about 8 per cent in the last two fiscals, after staying flattish over fiscals 2017-2021.

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The recent launch of competitive family postpaid plans along with additional OTT access benefits will lead to further narrowing of the gap, the report said.

"We expect the differential between postpaid and prepaid ARPUs to narrow to 1.1-1.2 times this fiscal, compared with 1.4-1.5 times now. That, along with good benefits being offered under renewed postpaid plans, will drive up the share of postpaid subscription to 12 per cent from 8 per cent currently. However, India will continue to lag developed countries such as the US, where postpaid accounts for over 75 per cent of the total mobile subscribers," Naveen Vaidyanathan, Director, said.

According to Rounak Agarwal, Team Leader, the telcos are aggressively targeting postpaid subscribers, as they are seen to be the early adopters of 5G services.

The benefits of increase in postpaid subscription may, however, partially be offset by moderation in postpaid ARPUs in the near term because of competitive offerings now compared with earlier.

Agarwal said the postpaid ARPUs are expected to come down moderately by about 6-8 per cent to about Rs 225-230 in fiscal 2024.

However, the gains would accrue in the medium to long term as postpaid subscribers are stickier in nature.



(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Apr 18 2023 | 5:02 PM IST

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