Is Duopoly a Possible Scenario for Indian Telecom Industry

While Vodafone Idea isn’t in a good position right now, it is a company that’s too big just to be wiped off the market. The market scenario is not the same as the 2016-17 period when many telcos went bankrupt, only to be never seen again. Vodafone Idea, even if it goes bankrupt, can be revived by one major conglomerate in India – the Adani Group. Note that this is highly speculative, and things might not even reach this point.

If Vi’s promoters pitch in additional capital, everything around the funding from external investors will fall in place for the telco; at least, that’s what the developments suggest.

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One party that wouldn’t want the Indian telecom industry to go into the duopoly mode is the central government. It would be disastrous for the consumers as the two players would then be easily able to drive market prices and standards of services. A third prominent player would always be required to keep the balance in check for the Indian telecom industry.

There are more parties that wouldn’t want Vodafone Idea (Vi) to go out of business. These parties would likely be the banks/lenders, who have given the telco thousands of crores in loans. Even Airtel, which owns a significant stake in Indus Towers, would want Vi to stay in business and keep paying its dues to the tower company.

If Vi goes out of the market, it would be a catastrophe for the Indian economy. The telco employs thousands of Indians and offers digital services to many enterprises, which contribute to the economy of the country. Note that whether Adani Group is planning to buy out Vodafone Idea or not is a very highly speculative matter and cannot be treated with any degree of certainty.