Sunil Mittal: How long will telecom companies kill each other | India Business News – Times of India
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Mittal, who is seen as the man who heralded the telecom revolution in the country, said that while the Indian market has seen data and voice usage shoot through the roof, tariffs are still to see any action, leaving the companies in a financial mess.
“To say that the telecom industry is in a bit of trouble is actually an understatement. It is in a tremendous amount of stress. I hope the government, the authorities, and the telecom department (DoT) focus on this issue and ensure India’s digital dream remains intact,” he said, making a case for support and fiscal relief.
The aggressive launch by Reliance Jio in September 2016 had literally broken the back of the telecom industry as Mukesh Ambani made a re-entry into the business by making voice free and offering data at dirt-cheap prices.
Airtel went through losses for a series of quarters thereafter, while Vodafone Idea are in the middle of deep losses and financial mess despite merging operations.
Mittal reiterated his thought that the country of the size of India needs three private operators. “Ten operators gone out of business, two merged together… gasping for breath right now… How long can you keep on killing each other? The point is, you have a return on capital — even by the best operator — at low single-digit and most of them (are) struggling.”
He said that while Airtel feels that tariffs need to go up, it still “can’t do it unilaterally” as the company needs to be mindful of moves by the competition. Jio, which now leads the Indian telecom market, has been maintaining its hyper-aggressive stance and has not given any clear indications about a consumer tariff raise.
Mittal said that the last 5-6 years had been brutal for the older telecom players, adding that the results are there for all to see.
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