IT's a shakeout!

20th March 2017
IT's a shakeout!

 Two merger announcements on the same day  speak of a coming together of India's telecom providers. That can only be good for the consumer
March 20 2017: All within one hour on Monday, March 20,  two key mergers in the Indian telecom industry, sharply reduced the number of players and  created large groups with the staying power to  survive and succeed in  what has become an increasingly   challenging business.
Idea Cellular and Vodafone India said that their respective boards have approved their merger,  to create India’s largest telecom company with a total revenue of over Rs 80,000 crore.
Says Vodafone Group  CEO Vittorio Colao: “The combined company will have the scale required to ensure sustainable consumer choice in a competitive market and to expand new technologies—such as mobile money services—that have the potential to transform daily life for every Indian.”
The combined company would become  the dominant  telecom provider  with some  400 million customers,  and a  35% market share of customers.  It would push Airtel ( which has already bought out the business of Telenor)  into second place,  with  270 million customers
At almost the same time, Reliance Communications  said it had  obtained an approval of the Competition Commission of India (CCI) for the proposed scheme to bring together its  telecom business  and that of Aircel  and Dishnet Wireless. The Company has already received approval from the Securities and Exchange Board of India (SEBI), BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) for the proposed scheme.  The combined entity  would have assets worth Rs 65,000 crores,  making it possibly the number 3 player in India.
Many of these mergers  may have been in part triggered by the aggressive entry of Reliance Jio. This is headed by Mukesh Ambani, not Anil who heads Reliance Communications. Jio claims it signed up over 100 million subscribers in 100 days but they are all on free plans and it remains to be seen how many stick as paying customers, come April 1.
Tata Teleservices is as yet a solo player but for how long?   It may join Reliance Comm- Aircel -- that is the wisdom in the bourses.
At any rate,these consolidations  may see even more aggressive pricing unleashed in India  for  data services, with voice virtually free.  That can only good for the consumers. Let the price games begin!