India's mobile boom may be exaggerated if one takes into account the large number of mobile connections that are currently inactive.
Of the 771 million mobile subscribers reported by mobile operators at the end of January, only about 549 million were active subscribers, according to the Telecom Regulatory Authority of India (TRAI).
About 71 percent of connections were active at the end of January in comparison to 70.36 percent in the previous month, according to TRAI.
Kamlesh Bhatia, a principal research analyst at Gartner, said there are a large number of inactive connections, particularly pre-paid, that still get counted by mobile operators.
In many cases, users leave their previous pre-paid connections idle, and move on to cheaper connections or better deals offered by other operators.
The revelation of the extent of inactive mobile connections in the country is bound to make investors review their plans for the Indian mobile sector, Bhatia said.
To be sure, mobile operators in many countries have been accused of padding their subscriber figures by continuing to count inactive connections. But Bhatia said the problem of inactive customers in India is likely to be bigger than other countries, such as China. In China, competition is limited to only three operators, while India hosts many operators all competing fiercely by offering rock-bottom prices to entice users to switch.
While reporting monthly subscriber data, TRAI has recently started making a distinction between a Home Location Register (HLR), a central database that contains details of each mobile phone subscriber that is authorized to use the network, and the Visitor Location Register (VLR), a temporary database of the subscribers who have roamed into a particular area.
If the subscriber is active, and is able to send and receive calls and SMSs (short message service), he is available both in the HLR and VLR. However, it may be possible that the subscriber is registered in HLR but not in VLR due to a variety of reasons including that he is either switched-off or moved out of coverage area, according to TRAI.
VLR data is calculated on the basis of active subscribers in VLR on the last working day of the particular month for which the data is being collected.
Bhatia said that users who may be switched off or outside the coverage area at the time the VLR data is collected are likely to be a very small proportion of inactive users recorded. Most inactive users are those that no longer use the connections, he added.