What does telecom consolidation mean for you and me?

By November 22nd, 2015 AT 4:20 AM

Well, there’s too much of buzz around consolidation in the telecom industry with cash-rich Reliance Jio’s entry, but what does it actually mean for a mobile user like you and me?

mobile

Firstly, the good news for mobile users is that with consolidation there would be some improvement in the quality of services. When there are too many players in the sector, the resources gets badly divided and which means limited spectrum has to be shared among too many players.

“We want the right number of players, neither too few nor too many. No city in the world has so many operators like we do in India, which means we have excessive competition. Also this fragments scarce resources like spectrum,” says Mahesh Uppal, Telecom Consultant and Director of ComFirst.

It also means there’s too much pressure on the prices threatening the viability of business, he adds. On the other hand, industry experts also say that with consolidation there would be less number of choices for the customers and they have to select within the left out four-five players in the industry.

Faisal Kawoosa, Lead, Telecoms and SemiTronics (Semiconductor & Electronics) Practices at CMR, opines that “There is no doubt that when a big player enters the market then clearly it’s a big challenge for smaller players to respond to the challenge. The exit of weaker players from the industry will indicate limited choice for customers and that might not go down well with the customers as they might miss the services of some of the incumbent players.”

With RCom and SSTL merger, the industry has seen its first consolidation and the deal is likely to set the ball rolling for more such deals. Experts say that with RJio coming into the market, consolidation is something inevitable. RJio is a cash rich company and it is quite difficult to predict how it’s going to change the entire landscape of Indian telecom.

Recently, Fitch Ratings has said in its report that with Rjio’s entry the credit profiles of top four telcos will be under tremendous pressure and unprofitable players are likely to seen an exit from the sector.

Having over six years of experience in business journalism, Krishna has a knack for writing on telecom and IT. She believes that tryst with technology is the best thing that has ever happened to the mankind. Krishna is a telecom analyst with CMR

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Sanjit RoyDUANES GopalsaurabhRhishav Recent comment authors
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Sanjit Roy
Sanjit Roy

Off topic- Good news for Rcom gsm users of rowb, rcom has struck a icr deal with vodafone to continue it’s 2g services across rowb post 12th december 2015.

DUANE
DUANE

Can a network work on ICR when the main networks license has expired?

Sanjit Roy
Sanjit Roy

@Duane- You have asked a very good question, currently they have 3g spectrum in rowb, as we know that dot has delinked the license with spectrum. So they can continue their services because they have spectrum which gives the right to operate in rowb even 2g via icr route like idea cellular in rowb for their 3g services via icr with airtel. We know that jio is looking for 2g icr with bsnl for voice, just take a look to Bihar&Jharkhand circle , jio don’t have any 2g compatible spectrum there but they can roll 2g services via icr platform… Read more »

saurabh
saurabh

small player should make MAHAGATHBANDHAN…

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