Opportunities and Challenges for Telecom Operators in India

India has several telecom operators operating in all telecom circles across India. These include Indian as well as foreign telecom operators. The reason for huge interest in this sector is that India has a huge market for telecom services.

But the competition in this sector is also intense and requires huge capital investments to build infrastructure especially if you want to cover the non-urban areas in the country. The cost of acquiring spectrum required for operating telecom services has also gone up as the companies now have to bid for it. To make things worse, the top Indian company Reliance Industry’s super cheap Jio service has put extreme pressure on other telecom operators.

All these factors created burden on the balance sheets of smaller telecom players who either sold off their businesses to bigger players or are looking for partners. Telenor was among the first to quit India and other are following. The stage is set for further consolidation in the telecom sector in India. And I see only 2 to 4 companies operating in this sector going forward.

The companies I see surviving this competition are: Airtel, BSNL, Idea/Vodafone Mobile and Reliance Jio. Amongst them, each company has its strong and weak points. Some have a country wide network, some have a quality network with minimum call drop, others have most competitive call rates and others have most attractive data plans. So, each company has its strong point based on which they get their customers.

So, which company should you go for? The table below shows a comparison of strengths and weaknesses of these companies

OperatorCostVoice QualityData Speed
4GCall Drop Ranking
BSNLEconomicalPoorGoodOfferedVery Poor
Idea / VodafoneReasonableGreatGoodStartedExcellent
Reliance JioSuper CheapGoodGreatYesGood

Call Drop Source: Trai Report of March 2015

Update: As expected Jio, has disrupted the market and  Reliance Communication, Aircel, Telenor, Tata Docomo, Tata telecom maharashtra, all have been forced to either stop operations, file for bankruptcy or sell out assets to others. Idea and Vodafone have decided to merge and hence there are only three reliable telecom companies left in India now.. Jio, Airtel and the merged company of Idea-Vodafone.  BSNL is now in fragile condition as first landline, then mobile and now its broadband business is seeing downfall. Its been struggling to pay salary to its staff.

R-Jio was able to beat old telecom players because they did not upgrade their technology. VoLTE was the trick that changed fortunes for Jio. Now, fibre broadband and 5G provides another chance to these companies to beat the competition. Hopefully, Airtel, Idea-vodafone, and BSNL would be better prepared this time and it won’t be a single company show this time.

Another way to beat R-Jio is to provide better customer support. R-Jio has poor customer support, one has to wait in long queues to talk to people at Jio stores, email requests get answered only after 3 to 4 days. So there is an opportunity for  other telecom players to provide better support and boast of their better support in advertisements.

Overall, the tough time is not over for telecom sector yet. 2019-20 would see even more competition and the end uses will be the winner no matter who wins the race.

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