Indian Govt Won’t Allow Airtel and Jio Duopoly Ever

Airtel Jio

The talks around the arrival of a duopoly in the Indian telecom market have revived, given the position of Vodafone Idea (Vi). It must come as a huge disrespect now and again for the state-run telco, Bharat Sanchar Nigam Limited (BSNL), which isn’t even considered competition at all. Jio and Airtel are the only telecom operators that are able to give a return to their investors. Also, Jio and Airtel are the only ones that are adding subscribers, rolling out 5G, have a strong fixed-line broadband business and expanding into other offerings with their mobile apps. To be fair, even Vodafone Idea is doing well in offering more value to customers through the Vi app on smartphones. But that hasn’t created a shred of difference for Vi.

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Kotak Institutional Equities said in a recent report that Airtel and Jio duopoly could become a reality if the tariff hikes are delayed in India. Because of the low tariffs, telcos can’t get sustainable returns from their subscribers, even after investing thousands of crores into building telecom infrastructure across the country.

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Airtel and Vi have been quite vocal on the matter of tariff hikes. But Vi can’t just hike the tariffs without Airtel and Jio taking the first big steps. While Airtel has removed the base plan of Rs 99 from all telecom circles and made the new base option the Rs 155 plan, Vi can’t do the same. It is because it would lead to higher subscriber churn, something it has not been able to control in the last few years.