Bharti Airtel thinks that acquisitions, spectrum trading and sharing will finally leave just 5-6 mobile operators standing in India. This report comes less than a fortnight after the company bought Loop Mobile Mumbai, a move which added 3 million more users to Airtel’s kitty.
The acquisition means Airtel is now the biggest telecom in Mumbai based on number of users. The purchase even saw the company getting 2,500 Loop cell sites (it previously had 4,000 of these) to support its network of new and old customers.
The service provider was also the first in the country to boast of a subscriber base crossing 200 million users. Gopal Vittal, Airtel’s Joint Managing Director and CEO of India Operations, explains that India’s spectrum is divided among companies in an unsustainable and fragmented manner.
The operational cost of running and maintaining assets in order to deliver telecom services will naturally be high. Additionally, data-consuming applications like BBM, WhatsApp and Line are pushing profits down too. Providers who can’t give stable and sufficient support for data-hungry subscribers by adopting newer technologies like 3G and 4G are suffering.
The logical conclusion is that smaller brands will be forced to give up and sell to bigger ones since the market won’t have room for them. Apart from acquisitions driving down the number of competitors, network operators will have to trade and share spectrum and other resources, similar to the RCom and RJIL deal.
The Economic Times which got this report through PTI, notes that rating agency Fitch, also supports the 5-6 mobile operators claim.