India’s richest man shakes up telecoms market

AFP, MUMBAI: Buyouts, mergers and quick exits -- as India's richest man shakes up the country's ultra-competitive mobile market, telecommunications companies are scrambling to either consolidate or cut their losses and run.
Norwegian multinational Telenor recently became the latest to quit India and analysts expect other brands will disappear as intense price wars sparked by tycoon Mukesh Ambani mean thinning profit margins.
"Most of the smaller players will find it difficult to grow by themselves and will be looking for exit options," Bhasker Canagaradjou, head of research at Ipsos Business Consulting in Mumbai, told AFP.
India's multi-billion dollar telecoms sector had a dozen companies battling for customers as recently as 2010. Now, there is around half that number and industry watchers say soon there will be only four.
The race to consolidate has hastened since Ambani sent shock waves through the sector in September when he launched Reliance Jio's 4G network with a free service for the rest of 2016 that was later extended to April.
The audacious offer was followed by vastly cheaper data plans and free voice calls for life, forcing rattled competitors to slash their own tariffs to maintain market share while also seeking extra investment.
India's telecoms sector, which global research firm International Data Corporation estimates will have market revenue of $37 billion this year, has long been a risky and costly endeavour for companies.
Network operators have to overcome regulatory difficulties to purchase expensive wireless spectrum to provide services that are often plagued by dodgy reception, frequent call drops and fluctuating internet speeds.
But Jio's arrival has added a new dimension as major players, including Vodafone and Idea, explore tie-ups to match the deep pockets of the Reliance Industries-backed telecoms company, while others are being forced to call it a day.
Telenor announced in late February that market leader Bharti Airtel would acquire its Indian operations, saying the amount of investment needed to compete in the crowded sector would not offer a worthwhile level of return.
The withdrawal came after Videocon Telecom told subscribers in January that it planned to cease operations and pull out of the market. Aircel and Mobile TeleSystems (MTS) have sold up since the beginning of 2016.

Indias richest man shakes up telecoms market

AFP, MUMBAI: Buyouts, mergers and quick exits -- as Indias richest man shakes up the countrys ultra-competitive mobile market, telecommunications companies are scrambling to either consolidate or cut their losses and run. Norwegian multinational Telenor recently became the latest to quit India and analysts expect other brands will disappear as intense price wars sparked by tycoon Mukesh Ambani mean thinning profit margins. Most of the smaller players will find it difficult to grow by themselves and will be looking for exit options, Bhasker Canagaradjou, head of research at Ipsos Business Consulting in Mumbai, told AFP. Indias multi-billion dollar telecoms sector had a dozen companies battling for customers as recently as 2010. Now, there is around half that number and industry watchers say soon there will be only four. The race to consolidate has hastened since Ambani sent shock waves through the sector in September when he launched Reliance Jios 4G network with a free service for the rest of 2016 that was later extended to April. The audacious offer was followed by vastly cheaper data plans and free voice calls for life, forcing rattled competitors to slash their own tariffs to maintain market share while also seeking extra investment. Indias telecoms sector, which global research firm International Data Corporation estimates will have market revenue of $37 billion this year, has long been a risky and costly endeavour for companies. Network operators have to overcome regulatory difficulties to purchase expensive wireless spectrum to provide services that are often plagued by dodgy reception, frequent call drops and fluctuating internet speeds. But Jios arrival has added a new dimension as major players, including Vodafone and Idea, explore tie-ups to match the deep pockets of the Reliance Industries-backed telecoms company, while others are being forced to call it a day. Telenor announced in late February that market leader Bharti Airtel would acquire its Indian operations, saying the amount of investment needed to compete in the crowded sector would not offer a worthwhile level of return. The withdrawal came after Videocon Telecom told subscribers in January that it planned to cease operations and pull out of the market. Aircel and Mobile TeleSystems (MTS) have sold up since the beginningof 2016.