Consolidation to further help telcos like Airtel: Report

By May 15th, 2016 AT 9:46 PM

Brokerage CLSA, in a note, said that the consolidation drive will further accelerate as Norwegian operator Telenor’s India unit is expected to either merge its operations or sell its spectrum, which will help bigger telcos like Bharti Airtel, which has been chipping away the revenue market share from players such as Telenor India.

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“Smaller operators like Telenor may either have to merge, curtail their operations further or trade their spectrum (like Videocon did),” CLSA said.

Telenor India is currently struggling for growth in the country. CLSA said that Telenor is facing subscriber churn at the top end due to its lack of 3G/4G offering is impacting revenue growth, driving the need for data spectrum.

Over the past year, Telenor’s revenue market share has been stagnant despite a 110 basis points increase in subscriber market share, indicating a fall in average revenue per user, CLSA said.

“Telenor India’s revenue growth has moderated sharply from more than 30% during the calendar year 2014 to 6-7% over the past four quarters, mainly due to a decline in Arpu over the past six consecutive quarters to Rs 90 per month during the first quarter of calendar year 2016,” CLSA said.

The note added that capacity issues are one big limitation holding Telenor’s growth back in the country currently experiencing a massive data mobile surge.

Recently, Telenor’s management said that while it needs more spectrum in India, it will do so only if the returns are commensurate.

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tonpe vijayMahmood JunaidKaushikNiranjana NKRhishav Kumar Das Recent comment authors
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tonpe vijay
tonpe vijay

I think AVOID is as one big telco another BSNL and third is RELIANCE(rcom,jio) out of which jio will give competitive price for about two years. In the present scenario india need at least one new pan india operator.

Rhishav
Rhishav

I want better services from every operator. We pay for the service we want then we should be able to fully use it. If the need is less serious operators to close down and more serious operators to stay then that is what should be done. Prices may rise. My pick of the opertors that will be there in the market after all the consolidations are Airtel, Vodafone, Idea, BSNL, Jio. With enough spectrum and fiber back haul they can give us a truly international experience.

Rohit
Rohit

Don’t forget rcom coz it can alone maintain competition in the market

Rhishav Kumar Das
Rhishav Kumar Das

I am not sure. But I feel that RCom will merge with Jio in the future. This is just a thought.

Kaushik
Kaushik

Doubt it, because RCom already has ownership from Maxis and Sistema. I doubt those companies would be too happy with a merger with Jio which will almost certainly lead to their total disappearance from the Indian market. India is too important now to just leave, this is why Telenor is thinking twice right now….

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