No industry has perhaps seen so much underlying discord before this as the telecom industry. India now has three private service providers and one government owned operator. The journey to consolidation has not been easy. Not for the respective telcos that fell by the wayside, not for the policy makers, the regulator, the judiciary and above all, not for the Indian banks, that are still struggling to somehow recover the USD 5.7 billion, their exposure to this sunrise industry.
To say the outlook of the four players is absolutely different is an understatement. Reliance Jio, flush with funds, on the prowl for acquisitions, confident of its home-grown 5G technology, awaiting the spectrum auctions that cannot come fast enough, delaying tariff increases, dangling subsidy carrots, lobbying to shut down 2G services is rearing to become a monopoly. Bharti Airtel, raising funds conservatively, not seeking auctions-4G perhaps in 2021 but 5G not for another couple of years, in favor of a price increase is comfortable with competition. Voda Idea, getting its act together, relaunching its merged brand, reiterating its commitment to the Indian market now that the AGR issue is somewhat resolved and the international arbitration has gone in its favor, is desperate for tariff hikes and has adequate spectrum. BSNL, reeling under losses is struggling to keep its head above water.
The government, of course, would love to somehow hold the auction and get its hands on the anticipated ₹ 44000 crore for the expired spectrum and perhaps another ₹150,000 crore for 5G spectrum.
On the vendor front, the country is yo-yoing between going ahead with Chinese vendors or partnering with the US in ostracizing them. And, heading toward a duopolistic vendor situation or an Atmanirbhar Bharat are perhaps not the best options for an industry on which so many other industries ride. While India must keep pace with the rest of the world, neither the consumer nor the two telcos see any reason to go ahead with 5G yet.
To end on a cheerful note, the brokerage firms are once again unanimous that the sector will report sequential improvement in revenue. The industry seems to be more stable than it has been for a long time, with increasing ARPUs, AGR issue out of the courts, the COVID ride being better than for other sectors, and the need for connectivity like never before.
We wish our readers a happy and prosperous Diwali!