Second round of consolidation underway in telecom

industry.

Communication is the process in which information is

transferred from one source to another. And
“information” can be of many kinds such as DATA,
VIDEO, GRAPHICS and many more. Voice media is the
simplest way to communicate and similarly Data is the
foundation of any communication that gets exchanged
through various mediums.
One such technology which helps to maintain the
continuity of the same is telecommunications.
Telecommunication consists of electromagnetic devices
and systems for communicating long distance.
Few examples of telecommunications are telephone,
radio, television and many more. Transmitter and
Receiver are the basic elements of telecommunications.

Telecommunication In India
Telecommunication has been the fastest growing sector
in India. And various Government schemes like “Make in
India” has made an way of generating more employment
and making India a good place as having the existence of
such technology.
“Telecom infrastructure providers are going to play a key
role in realisation of transformative and revolutionary
initiatives of the Government of India and will foster
partnerships under its various programs like Bharatnet
and Smart city mission to enhance connectivity by
creation of robust telecom infrastructure,” says T.R.Dua,
Director-General, Tower & Infrastructure Providers
Association.
Historical View of the Telecommunication in India

“The journey had effectively started in 1994, when, in

line with New Economic Policy 1991, the Government
opened the telecom sector for private investments. The
regulatory functions of Department of
Telecommunications were hived off to an independent
regulator, Telecom Regulatory Authority of India in 1997.
BSNL was carved out of Department of
Telecommunication for separation of its policy functions
and telecom operations. Subsequently an Appellate
body, TDSAT, was formed for dispute settlement as TRAI
Act was amended in 2000.
In the beginning the Government issued two cellular
licenses per telecom circle followed by allocation of third
cellular license to BSNL/ MTNL in 2000. In 2001, 4h
cellular license was awarded through auction. Between
2003 and 2008, the Unified Access service license was
awarded based on the price arrived for 4th cellular
license. Pursuant to Supreme Court order in 2012, the
spectrum was auctioned, and auction continue to be the
norm today.

The telecom tower Industry has played a critical pivotal

role in the unhindered growth of India’s telecom sector.
It is quite evident that the growth of telecom services
could not have been possible without a robust and
ubiquitous telecom infrastructure.”1

Current status of telecommunications industry

As of 31 January 2021, there are 1159.42 million wireless

subscribers including inactive users in India according
to Telecom Regulatory Authority of India (TRAI)2 The
amount of service providers got reduced after the
humungous entry of Reliance Jio but the amount of
subscribers increased subsequently.

1
Sources Telecom.com/ India times
2
Telecom Subscription Data as on 31st January, 2021”(PDF). Telecom Regulatory Authority of India 31 st
March 2021
The telecom Industry before Reliance Jio was very much
into safe zone, later on after the entry of Reliance Jio it
literally went into a stressful phase. The customers were
getting diverted. Eventually Vodafone and Idea got
merged.

October, 2017 for Bharti Airtel stood at 285 million

Followed by Vodafone at 208 million, Idea Cellular at 191
Million, and Reliance Jio at 145.9 million making Reliance
Jio the fourth largest telecom operator in India within a
Span of one year. At present, in India, Reliance Jio is the
Only telecom operator that offers fully data centric
services, Entirely based on voice over long-term
evolution (VoLTE) Technology, which enables voice to
carry over an internet Protocol (IP) network at a higher
speed than earlier 2G and 3G traditional networks.
Anupam Srivastava stated that Reliance Jio’s existence
has posed a challenge of survival to Other telecom
operators in India by sharply reducing the Tariffs (Bhatia
and Palepu, 2016).3

Impact of covid(19)
3
Disruptions in Indian Telecom Sector: A Qualitative Study
on Reliance Jio vol11
The emergence of the novel coronavirus (COVID-19) has
also impacted the telecom Industry as badly as other
sectors. People and businesses are shifting to digital
means to manage their work, which has led to an terrific
increase in mobile network traffic and access demands.
Subsequently, the service providers had to balance the
new increased subscribers according to increased
networking requirements of their customers. As a result
of complete lockdown “internet” became the sole
medium to sail through such difficult phase.
Consequently, Customer complaints raised during the
lockdown due to poor mobile network signal reception
and slow internet speeds.
Consolidation in the Industry

As discussed above the telecom industry has changed

drastically since the entry of Reliance Jio in 2016. It
witnessed a wave of consolidation as companies looked
to increasing pressure on subscribers, decreasing
revenues and lower costs, and strived to remain
competitive.
Many small operators, such as Aircel and Reliance were
forced to close operations. Other minor players such as
Tata Teleservices and Telenor were acquired by Bharti
Airtel, while Vodafone India merged with Idea Cellular.
The three big players in the industry now are Reliance
Jio, Bharti Airtel, and Vodafone-Idea.
India Ratings and Research said the sector, which was
battered following the aggressive entry of Reliance Jio,
will continue showing signs of recovery amid conducive
regulatory environment and maintained a "stable"
outlook for the industry in FY22.
The second round of consolidation (Consolidation 2.0) is
kicking-in in the industry, which will bring a
transformation in the business models of telecom
companies, leading to the evolution of incumbents from
the providers of traditional voice-only services to
complete digital solutions for households, it said.
Along with wireless mobility, telecommunications will
have to provide services such as broadband connectivity,
cable TV services (direct -to-home), enterprise solutions,
e-payment wallets/platforms, music applications and
over-the-top transmission platform.
This will provide a complete experience to end consumer
and help India to excel digitally, however, the industry is
still bearing heavy debts and losses which makes it a
challenging task.
Such bundling of services along with the traditional
wireless mobile services has become the “need of the
hour” to ensure customer stickiness and widen the
market footprint, the agency said.
The increasing data usage and rising proportion of higher
average revenue per user data customers in the overall
subscriber mix indicate that, even without tariff hikes,
the sector is structurally moving towards a higher-
average revenue per user regime, it said.

Competition intensity has alleviated over the last one

year, as evident from narrowing of tariff differentials
among telcos, it said.

Conclusion
The telecom industry is going through difficult
transitional phase from being “voice-centric to data-
centric” and will remain under pressure in the near term.
However, in the long term, with consolidation, we expect
it to stabilize, with players undertaking technological
upgradation with support from the government.
Considering the rising consumption of mobile internet
and a likely addition of 500mn (5g) new internet users
over the next five years, the industry is poised for
growth, and represents tremendous potential.