Telecom Lead India: Tata Docomo is planning to stop post-paid services in West Bengal (except Kolkata) and Bihar from June 17. The mobile operator will continue pre-paid services.
The new initiative is part of Tata Teleservices’ aim to optimize profitability in each market it operates.
Tata Teleservices, according to TRAI data, has posted gross revenue of Rs 2,294 crore in the third quarter of fiscal 2013, up 0.15 percent as compared with the previous quarter.
ARPU of Tata Teleservices is Rs 136 compared with the industry average of Rs 140 a month. For the nine months ended December 2012, Tata Teleservices reported an operating loss of Rs 190 crore (operating loss margin of two per cent), compared with Rs 247 crore (margin of three per cent) in the same period the previous year.
As appropriate in each market, TTSL has taken several steps including on increasing pricing and reducing costs to optimize its overall returns from that geography.
Tata Teleservices had a total debt of Rs 29,300 crore as on December 31, 2012.
Kolkata and West Bengal are considered as separate telecom circles. Tata DoCoMo has 29 lakh subscribers in Kolkata. While post-paid services will be discontinued in West Bengal, those in Kolkata will not be impacted, The Hindu Business Line reported.
Tata Teleservices, in fact, has already started reducing exposure from non-viable telecom circles in North East. Tata Teleservices has the lowest market share in North-East, Assam and Jammu & Kashmir circles comparing with Airtel, Aircel, Vodafone, Reliance Communications and Idea Cellular.
Tata Teleservices’ wireless market share in India is around 8.59 percent against Airtel’s 20.05 percent and Reliance Communications’ 16.55 percent.
The company has already issued messages asking customers to switch or move to another operator (called port out).
Around 3-4 per cent of its subscribers in Bengal (out of 21 lakh) and Bihar (37 lakh in Bihar & Jharkhand) are post-paid users, as against an industry average of 5-7 per cent. Bihar & Jharkhand together form a telecom circle. The remaining 97 per cent are pre-paid users.
