Reliance Comm loses 20.5 mln mobile customers in July

A man makes a phone call on his mobile phone in front of an advertisement for Reliance in Mumbai June 8, 2010.

NEW DELHI (Reuters) - Reliance Communications lost more than 13 percent of its mobile customers in July as it cut off inactive subscribers who have not used their phones for two months, although the firm said the move would have no impact on revenue.

About 95 percent of the mobile phone users in India, the world's second-biggest mobile phone market, are prepaid customers and many have multiple accounts.

For the last year or so, carriers have been cancelling inactive accounts in a clean-up exercise, as focus shifts to increasing revenue rather than flaunting customer base.

Tata Teleservices has reported a decline in customer base several times in the past months after the clean-up began, but the 20.5 million customer cutoff is the first time Reliance Communications reported a fall.

"This is in line with the industry practice and has no impact on customer experience or (the company's) revenues," Reliance Communications said in a statement after the sector regulator released July customer data for the industry on Friday.

Reliance Communications' total mobile subscribers fell to 134.1 million mobile subscribers at the end of July, from 154.6 million in the previous month, pu shing it one spot down to rank No.3 by subscribers.

Sixth-ranked Tata Teleservices also lost 2.4 million customers in July, shrinking its total to 77.8 million. Telenor's India unit, which is set to lose all its operating permits after a court order, saw its customer base declining 1.1 million in July.

Market leader Bharti Airtel gained 1.5 million customers in July to have a total of 188.8 million, while Vodafone's local unit signed up 1.2 million customers in July to boost its total to 154.9 million and became the No.2 carrier by subscribers.

India's total mobile user base fell to 913.5 million at the end of July, 20.6 million lower than June, the Telecom Regulatory Authority of India said. About 76 percent of the industry subscribers are "active" customers, it said.

For detailed customer data, see www.trai.gov.in

(Reporting by Devidutta Tripathy and Prashant Mehra; editing by Keiron Henderson)