Telcos run up huge costs to retain prepaid subscribers

Kolkata: India’s top telcos are struggling to hold on to mainly their pre-paid subscribers, underlined by their rising monthly churn that has triggered a sharp rise in customer acquisition costs, say industry executives and analysts.

Customer churn, they said, has almost doubled in the last two years, which has resulted in the likes of Vodafone Idea (Vi), Bharti Airtel and Reliance Jio seeing sharp jumps in SG&A (selling, general & administrative) expenses in the September quarter as they strive to hold on to customers and poach new ones from rivals. Pre-paid users make up well over 90% of Airtel and Vodafone Idea’s user base, and most of Jio’s subscriber base.