Industry consolidations could result in 3 telco superpowers in response to Reliance Jio.

0
298

Reliance Jio moves over 32.26 Petabytes of data every day to service the needs of its 100 million customers through its pan-India 4G LTE, all-IP wireless broadband network. To keep pace, players in the field are considering joining hands to offer competitive deals and reclaim lost market share.

grid-1511494_960_720

India quickly jumped up to the number one spot in mobile data consumption and the financial opportunities this market presents are nearly limitless. The space is estimated to have 600 million potential customers by mid-2017 thanks to the availability of inexpensive smartphones.

Starting April 1, 2017, Reliance Jio will no longer be a paid service for new customers, opening a window for players like Bharti Airtel and Vodafone to add competing products.

Intense consolidation could be the name of the game in the coming months thanks to Jio’s quick domination of the space with over 100 million customers in 170 days. Mobile Number Portability (MNP) and better offers from Jio resulted in a lot of movement between operators.

On February 1, 2017, Vodafone and Idea Cellular officially announced that they were in negotiations to merge forces. Although communications from both parties clearly state that negotiations do not guarantee a merger, the respective second and third largest players in the industry joining hands would destabilise Bharti Airtel from its 15-year domination of the number one spot.

Reliance Jio has also reportedly prompted Reliance Communications CEO Anil Ambani to initiate talks with Tata Teleservices to merge with RCom-Aircel and MTS.

Issues such as Tata Telecom’s current debt of roughly Rs.30,000 crore and the NTT Docomo exit are expected to be challenging factors during negotiations.

Telenor, an operator with a small market share has considered exiting the telecom industry and has initiated talks with RCom-Aircel and Bharti Airtel.

LEAVE A REPLY

Please enter your comment!
Please enter your name here