The Telecom 'Voice' Story

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Jan. 10, 2022

The telecom story in India is all about data. Since the launch of Jio and largely because of the disruption caused by Jio (and the introduction of 4G), data consumption in the country has exploded. In the last 5 years, mobile data consumption has grown over 50-fold. An average user today consumes 13GB of mobile data per month. This is a 25-fold increase in the last 5 years.

Having said this, an ignored aspect of the telecom story also is the huge increase in voice usage. And this increase has broadly run parallel with the growth in data consumption. Since 2016, the average minutes of usage (MoU) per subscriber has more than doubled. An average subscriber now spends eight hundred minutes per month talking to others (incoming and outgoing calls) – almost half an hour each day. And this increase has come after almost 6 years of stable voice usage.

One would have expected that with data becoming so cheap, people would have shifted to data-based usage to interact and stay connected with others. They would have turned to messaging apps, social media, VOIP calling etc to stay connected with people rather than speaking. But evidently, that has not been the case. Or is it?

What makes this trend even more interesting is the divergence between the two sets of telecom subscribers - prepaid users and post-paid users. The post-paid subscribers are the more intensive users of telecom subscribers – they spend more than two times what prepaid subscribers pay as their monthly mobile bill. Historically, post-paid subscribers had a higher voice usage than prepaid subscribers. In 2016 for example, post-paid subscribers had almost nine hundred minutes per month of voice usage, more than 2.5x of prepaid subscribers.

But the growth in voice usage since 2016 has been entirely due to prepaid customers. Their monthly average voice usage has increased from 345 minutes per month in 2016 to 825 minutes per month in the first half of 2021. In contrast, the voice usage of post-paid subscribers has fallen from almost nine hundred minutes per month in 2016 to 620 minutes per month in the first half of 2021. Prepaid subscribers have more voice usage now than post-paid subscribers.

So, it is likely that for a certain segment of users, the substitution of voice by data, is happening. The voice usage by post-paid customers has fallen by a third in the last 5 years. But this is a relatively smaller segment of the market. For a much larger segment, their overall usage of telecom services – both data and voice – has expanded due to the fall in prices.

So, will this trend continue before it reverses, or will it not reverse for a certain set of users? Five years down the line, would the usage of voice calls have increased further, remained around the same or reduced, compared to the current level?




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