Tuesday, 17 July 2018

India's telecoms sector could stabilise before the end of 2018

By Chris Kelly, Total Telecom
Tuesday 10 July 18

India is one of the most competitive markets for telecoms operators to turn a profit anywhere in the world

India's beleaguered telecoms sector could be in line for a change in fortunes, according to India's Information and Credit Ratings Agency. In a note to the Economic Times of India, the ICRA said that it expected market conditions in India's telecoms sector to stabilise in the coming six months…

India's beleaguered telecoms sector could be in line for a change in fortunes, according to India's Information and Credit Ratings Agency. In a note to the Economic Times of India, the ICRA said that it expected market conditions in India's telecoms sector to stabilise in the coming six months, as the proposed merger between Idea Cellular and Vodafone reduces the number of competitors in the marketplace.   

“Consolidation transactions over the last two-three quarters released a sizeable subscriber base which provided opportunities to larger telcos to enhance their subscriber market share, thus keeping the competitive intensity high. From March 2017 to March 2018, the larger telcos together added 202 million active subscribers and a large portion of this – 192 million came at the expense of discontinuing telcos. Now the subscriber base of the discontinuing telcos has largely diminished," Harsh Jagnani, sector head and VP for Corporate Ratings at the ICRA, told the Economic Times of India.

"The impending merger of Vodafone and Idea, and the ensuing integration of the two may see some erosion of subscribers, giving an opportunity to other operators. Thus, we expect that a stable industry structure, with three operators holding more than 90% of the market share, to coincide with the stabilization of Vodafone-Idea merger. Till such time, the pricing levels in the industry are unlikely to witness material improvement," he added.

India remains one of the toughest markets for telcos to turn a profit in, due to ultra-fine margins and an overly crowded market place.  

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