Entry of Reliance Jio in September 2016 and its free promotional offers have forced the industry to work towards consolidation. Some experts are of the view that consolidation is the only answer to battle a newcomer like Reliance Jio.
However, there is a flip-side to consolidation as it would mean an increase in tariff in the future.
Once competitive pressures ease in the next year or so, the current tariffs would start inching upwards, a Mumbai-based analyst said.
Consolidation is being driven by intense pricing, competitive pressure, and other such mathematics, Hemant Joshi, partner, Deloitte Haskins & Sells said.
On January 30, UK-based telecom giant Vodafone announced that it was in talks for an all-stock merger of its unlisted Indian subsidiary with rival Idea Cellular. The proposed move would make the merged entity India’s largest telecom company in terms of revenue, at 43 per cent.
Disconnected from India
In 2006, Hutchison exited the Indian market with Vodafone buying a controlling stake in the company.
In 2012, Dubai-based telecom major Etisalat shut operations of its Indian arm, following SC judgment to cancel 122 licences.
