Bharti Airtel Expects Number of Indian Mobile Networks to Halve
Published on: 3rd Mar 2014
By: Ian Mansfield
Consolidation in the Indian telecoms market is likely to see the country left with just six major mobile networks. That is about half the current total.
The claim was made by Bharti Airtel's Joint Managing Director and Chief Executive Officer (India Operations), Gopal Vittal who suggested that the shake up would be a combination of acquisitions, spectrum trading and sharing.
He said that the consolidation was needed as individual mobile networks were holding insufficient radio spectrum and would need to buy up smaller networks with surpluses.
"If you look at the spectrum that is made available to operators in India, it is only around 40 per cent of the global average. This amount is divided into many operators, so the holding of individual operators is very small. Now the consequence of that is higher cost, more cost, more towers, more diesel," he told the PTI news agency..
The debt ratings agency has repeatedly said that it expects that spectrum pricing issued will lead to consolidation in the industry.
The rating agency also believes that India's telecom sector can afford six profit-making operators at the very most.
The government's recent decision to allow foreign investors to take full control of local mobile networks should also spur mergers, as they will no longer need to secure supporting funding from their Indian partners before making additional investments.