Jio revolution: Biggest victim Idea loses identity

India Infoline News Service | Mumbai | March 20, 2017 13:25 IST

The recent mergers and acquisitions taking place in the telecom sector will form a heavy competitive environment for the new entrants. It has also hiked the internal rivalry in the sector.

The recent mergers and acquisitions taking place in the telecom sector will form a heavy competitive environment for the new entrants. It has also hiked the internal rivalry in the sector.
 
The much-hyped Idea-Vodafone merger, due to which Idea stock has gained nearly 65% on YTD basis, has received nod from the board of Idea on Monday and now this has kicked off a fierce battle in the sector for sure. The Reliance Jio’s ‘Welcome offer’ and Happy New Year offer’ shook the telecom industry. Now, Jio has come up with the new unlimited data and voice plans at reasonable prices.
 
The other telecom players are trying to strengthen their presence in the Telecom domain by acquiring small players.
 
One of the largest telecom player in the country Bharti Airtel’s board has recently approved the acquisition of Telenor India. The company is also preparing to acquire the 4G airwave spectrum from Tikona Digital Networks.
 
The state-owned telecom companies BSNL and MTNL are also in the limelight, since the merger of these two companies was tabled in Lok Sabha. The Department of Telecom (DoT) has also supported the merger to bolster the financial health of these companies.
 
India is currently the second-largest telecommunication market and has the third highest number of internet users in the world. India’s telephone subscriber base expanded at a CAGR of 19.96 per cent, reaching 1058.86 million during financial years 2007 to 2016.
 
The telecom industry’s financial health has weakened with the massive debt burden of more than Rs 4.5 lakh cr. With the new mergers and acquisitions in the sector, the telecom industry of India is undergoing the historical transformation. According to a study by the industry pundits, India is expected to have over 180 million smartphones by 2019. The rural markets are still untapped in terms of smartphone sales and internet usage. The telcos have huge market available in the country.

Disclaimer: The contents herein is specifically prepared by ‘Dalal Street Investment Journal’, and is for your information & personal consumption only. India Infoline Limited or Dalal Street Investment Journal do not guarantee the accuracy, correctness, completeness or reliability of information contained herein and shall not be held responsible.

 

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