The Indian telecom market at risk of turning into a duopoly

With Vodafone Idea and BSNL both struggling to compete with rivals like Reliance Jio and Bharti Airtel, concerns of a duopoly forming in the Indian telecom market have resurfaced. Vodafone Idea, in particular, has been losing subscribers at an alarming rate. The company’s lack of expansion in 4G services and failure to launch 5G have severely impacted its health. In May alone, Vodafone Idea lost 2.81 million wireless subscribers and experienced a net active subscriber loss of 1.8 million.

Reliance Jio, on the other hand, added 3.03 million new wireless subscribers in May, while Bharti Airtel added 1.32 million. The launch of Jio Bharat, an internet-enabled phone, is expected to further erode Vodafone Idea’s market share. As a result, analysts predict that by the end of the fiscal year, Jio and Airtel will jointly dominate the market with 83% of the revenue market share, leaving Vodafone Idea behind.

BSNL, which is in the process of launching 4G services, may also struggle to gain traction in a market where Jio and Airtel are already focused on 5G. It remains uncertain whether BSNL will emerge as a strong player in the long run.

Vodafone Idea desperately needs a capital infusion of $8-10 billion to strengthen its 4G network and launch 5G. However, fundraising efforts have been stalled, despite the government’s equity investment in the company. The success of Vodafone Idea’s fundraising plan will play a crucial role in determining whether it can remain a strong contender in the telecom market.

As it stands, the Indian telecom market is at risk of becoming a duopoly unless Vodafone Idea can secure the necessary funds in the near future. Without significant investment, Vodafone Idea’s ability to compete with Jio and Airtel will be severely limited, potentially resulting in a market dominated by only two major players. ClaytOn County Register