Fear of cartelisation post telecom consolidation ‘unfounded’: COAI


Industry physique COAI has sought to allay fears of cartelisation on account of restricted quantity of Telecom gamers, saying the operators are listed corporations acutely aware of their model worth and the sector regulator retains a good vigil.

“…the three private players are (or belong to) listed Companies…they are very concerned about their brands. They have built up the value of the brand through years of integrity and looking after customers…and they are not about to throw it (away),” COAI Director General Rajan Mathews informed PTI.

He was responding to a question on whether or not three massive non-public sector gamers left within the fray post-consolidation might set off fears of a potential cartelisation.

“The brand value is so high and so important for conducting business in terms of getting the necessary funding from financial institutions that one cannot afford to indulge in these type of shenanigans that will dilute, distort or disrupt the value of fundamental assets,” Mathews argued.

Attracting funds for investments will hinge on safeguarding the model worth, and banks will invariably take a look at integrity of the establishment whereas lending, Mathews added.

“…we expect that the regulator will keep a vigil on what is going on…so the fears in terms of cartelisation are unfounded,” he stated.

On August 31, Idea cellular Ltd and Vodafone Plc introduced completion of the USD 23.2 billion (roughly Rs 1.6 lakh crore) merger of their India operations, creating the nation’s largest Telecom operator to tackle competitors from Reliance Jio.

The merged entity — Vodafone Idea Ltd — with a subscriber base of over 40.eight crore and market share of over 35 per cent shuffled the business’s high deck, dislodging Bharti Airtel from its numero uno spot.

Telecom Secretary Aruna Sundararajan has exuded confidence that the Vodafone-Idea cellular merger will pave the way in which for a “good competitive scenario” in India.

“We expect that with this merger, the market will begin to stabilise. We expect to see robust growth in the Telecom sector with the emergence of three strong private sector players, and one public sector player,” Sundararajan had stated earlier.

The Telecom sector has witnessed a spate of consolidation aimed toward discovering economies of scale after Reliance Jio ploughed USD 25 billion right into a pan-India nationwide 4G information service, providing free voice name and tariffs effectively beneath prevailing charges. Jio has amassed 230 million subscribers in two years of its launch.

Bharti Airtel fired the beginning gun with the acquisition of the Indian enterprise of Norway-based Telenor. It subsequently introduced takeover of shopper cell Companies of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharastra Ltd (TTML).

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