India raced past the capture the fastest growing mobile market in the world but operators say that the average revenue per user (ARPU) has steadily fallen correlating to steep declines in tariffs because of intense competition and cheaper short-message service.

Industry officials say that this trend is likely to continue for more time till consolidation or drop in operation costs stabilize and raise the ARPU again; current ARPU level is at Rs. 346.59. They anticipate value added services such as downloadable ring tones, music, wallpapers will increase ARPU by 15-17%.

Delhi and Mumbai were the highest ARPU cities (Rs. 465 and Rs. 430) while Gujarat, Tamil Nadu, Uttar Pradesh (East), Bihar, and Himachal Pradesh all posted an impressive 15% increase. The seven private GSM operators all posted a 14% increase in growth indicating that while margins may be the shrinking revenue base is growing.