TRAI: Indian Telecom Industry Is About To Hit New Heights
The Telecom Regulatory Authority of India or TRAI has spoken about the merger of Vodafone and Idea, stating that the situation in the telecom industry is going to change soon, and operators won’t have to succumb to the competition that is on. TRAI has also said that the telecom industry is moving towards a new era.
Analysts, however, have a different opinion altogether, and state that it will b all the harder for the new merger to emerge as a leading telecom operator given the situation that Reliance Jio has brought in with its pricing strategy. However, a senior official has said that, given time, this merger will prove otherwise as the two operators are giants in the sector, and are strong companies, nonetheless.
A bright future for the Indian Telecom Industry: TRAI
The official also says that although there is intense competition which has led to such a merger, the sector is seeing a new upcoming landscape in the country, through which companies can undergo a major restructure, which they find suitable for the new requirements and demands of the customers. He has also said that a slump for the sector in the coming months is quite unlikely. The official was asked about the revenue downfall in the industry, owing to the entry of Reliance Jio, and not to mention, the intense competition offered by Bharati Airtel. The official was posed a question as to whether the increasing heat of the competition would only make the situation worse for the industry, or not. The new Vodafone-Idea merger however, seems to be losing revenue, which has become a major concern for the newly merged company.
Merger will settle down all in time: TRAI
There has been an internal note from JP Morgan about the whole situation. The note, as read by ET, states that the aftermath of the merger will not be good, as we could see no growth, given that Reliance is not backing down on its pricing. The official went on to say that reorganization and restructuring of any kind is painstaking, requiring the routine to be changed completely. Although this is happening, one must understand that there should be a minimal number of choices in the market for the consumers.
Also, it is noteworthy to mention here that telecom giant, Bharati Airtel has stated in an investors’ meet that the current situation may be harsh, but the opportunities in the upcoming Indian telecom market are huge, nonetheless. Airtel, which was formerly a leader in the telecom sector in India, has also said that the ARPU, which is the total amount of revenue per subscriber has declined by 40% due to heavy investing in the past. As one may recall, Airtel had put in a tremendous amount, Rs. 23,800 crores to be precise, into its capital expenditure for the year 2017-18, allocating Rs. 24,000 crores as an additional capex for the present financial year.