The drop in subscribers in September comes after the overall user base dipped by 0.56 per cent to 939.57 million in August.
"The number of telephone subscribers in India decreased to 937.70 million at the end of September, 2012 from 939.57 million at the end of August 2012, thereby registering a monthly growth rate of -0.20 percent," Telecom Regulatory Authority of India (Trai) said in a statement.
Total wireless subscriber or mobile phone user base decreased by 0.19 percent to 906.62 million at the end of September 2012 from 908.36 million in August 2012.
Trai attributed the decline in subscriber base "to large scale disconnection by some of the service providers."
State-run BSNL emerged as market leader in new subscribers addition during the month amid the declining trend of subscriber base.
"I am unable to recall if BSNL ever lead market in terms of new subscriber additions. Addition of highest number of customers by BSNL in September acknowledges hard work of BSNL employees and improvement in the network," BSNL Chairman and Managing Director R K Upadhyay told PTI.
Reliance Communications' subscriber base increased to 134.8 million with 213,000 new addition of wireless customers.
Aircel added 655,000 customers followed by Quadrant's 53,607. Uninor added 32,662 new customers.
The highest dip of over 918,000 was in the wireless subscriber base of telecom major Bharti Airtel taking it total number of customers to 185.92 million.
This was followed by Vodafone and Idea Cellular whose subscriber base declined by 686,000 and 508,000 taking there wireless customer base to 152.66 million and 115.46 million respectively.
Tata Teleservices lost and Sistema Shyam lost 276,000 and 249,000 customers which took their customer base to 78.35 million and 16.59 million respectively.
Videocon, Loop and state-run MTNL lost 325,000, 47,000 and 15,000 wireless customers respectively Wireline subscriber base declined from 31.21 million at the end of August 2012 to 31.08 Million at the end of September 2012, Trai said.
Trai said that during September "share of urban wireless subscribers has decreased from 63.32 percent to 63.06 percent where as share of rural wireless subscribers has increased from 36.68 percent to 36.94 percent."
Trai said the dip in overall wireless teledensity at 74.49 in September compared to 77.28 at the end of August 2012.
Total broadband subscriber base grew by 1.71 percent to 15.08 million at the end of September 2012 from 14.82 million at the end of August 2012.