Airtel pips Vodafone in rural areas, but loses urban customers

India added net 3.5 million mobile subscribers on the GSM platform in April, largely driven by an increase in subscribers in rural areas, according to data released by the Cellular Operators Association of India on Friday.

The association, which represents the bulk of Indian telecom companies operating on the GSM platform, said rural India added 3.8 million subscribers.

Of these, 1.66 million signed up with Bharti Airtel, helping it to regain its top position in rural markets.

However, on an all-India basis, Airtel added merely 601,252 subscribers in April. The Sunil Mittal-promoted company lost around a million customers in urban areas, COAI said.

Nonetheless in terms of overall subscribers, Airtel continues to be the leader with 188 million, followed by Vodafone with 153 million and Idea with 122 million.

Vodafone had pipped Bharti Airtel as the largest rural operator in March, but in April Bharti had 83.8 million rural subscribers compared with 83.4 million for Vodafone.

In March, Vodafone, which had tweaked its distribution model to boost sales in the villages, had 82.24 million, a shade above Airtel's 82.16 million.

For a few operators like Aircel and Tata Teleservices, subscriber figures fell because customers stopped using their second mobile connections. Typically in rural areas many users take two connections to avail of discount plans offered by newer operators.

The overall largest gainers continue to be Vodafone India and Idea Cellular, with 1.4 million and 1.3 million subscribers.

Subscribers on its network were earlier the standard yardstick for measuring growth and profitability of a telecom operator. But in recent months the focus has shifted to revenue figures, as a higher number of low-end subscriber additions may also result in added costs for the operator due to cheap introductory plans and processing.

Given the high churn and dual phone connection phenomenon in India, some of these customers leave the operator's network before they start making a profitable contribution to revenue.

Rural subscriber addition is seen as a sign of revival of investment by operators in those areas.