oppn parties Idea-Vodafone Merger: Welcome Consolidation

News Snippets

  • The Army conducts an operational alert exercise in eastern Ladakh
  • The IAF reopened the Vijaynagar advance landing ground, an airstrip in Arunachal Pradesh near the Chinese border
  • Amit Shah says he never sought to impose Hindi
  • Government bans the manufacture and sale of e-cigarettes in India
  • Mamata Banerjee seeks an appointment with Home Minister Amit Shah today
  • Bengal CM Mamata Banerjee meets PM Modi in what she later described as a government-to-government meeting
  • Supreme Court sets a deadline of October 18 for completing the hearings in the Ayodhya case
  • Pakistan rejects India's request for use of its airspace when PM Modi flies to the US later this week
  • Crude prices fall sharply as Saudi Arabia assures normal production in a few weeks. Prices fall by 5.4% to $65.30 per barrel
  • Sensex tumbles 700 points over fears that rising crude prices will deal a body blow to the tottering Indian economy
  • As Rajeev Kumar fails to appear before the CBI despite several notices, the agency forms a special team to locate and apprehend him
  • S Jaishankar says Pakistan is not a normal neighbour and its behaviour is a "set of aberrations"
  • External Affairs Minister S Jaishankar says PoK in Indian territory and the country hopes to have physical jurisdiction over it one day
  • Barasat Sessions court near Kolkata rejects Rajeev Kumar anticipatory bail application citing lack of jurisdiction as the reason
  • PM Modi celebrates his birthday with Narmada aarti and later has lunch with his mother.
Sunni Wakf Board and Nirvani Akhara write to the Supreme Court for a negotiated settlement to the Ayodhya dispute
oppn parties
Idea-Vodafone Merger: Welcome Consolidation

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The merger of Idea and Vodafone is a step in the right direction, despite the merged entity being a telecom behemoth controlling 41% of the market. For, a fragmented market with many small players has meant poor services. Indians have for long suffered call drops and atrocious data connectivity, even in metros. In fact, market leaders like Airtel and Vodafone are the biggest culprits in this regard. Hence, with this merger, the telecom sector will now see four major players – Idea-Vodafone, Airtel, Jio and BSNL. The other smaller players are also talking merger, with Anil Ambani owned Reliance Com working to get Aircel and MTS under its wing. A few big players are both a boon and a bane, depending on how the road pans out in terms of competitiveness, market share, regulatory policies and growth.

There is always a risk that the consumer will suffer if a few big players play with the rates as part of a silent and unofficial cartel. Further, if one of the players strongly dominates in a particular circle, it can skew the rates to make monopoly profits. Thankfully, telecom regulator TRAI has been a very effective watchdog in this regard. Consumers will largely benefit from the consolidation as competition between the few large players will keep the rates down.

The telecom sector is heavily dependent on investments as it is driven by technology. The technological space is changing fast, with upgrades for most things available every few months. Even as India has embraced 4G, there are already whispers about 5G. Consolidation will mean that companies will offer better technology and hence better services jointly. It remains to be seen how consolidation will work if one of the players, namely Jio, continues to disrupt the market with offerings that the others will be hard pressed to match, mainly because it will be a huge drain on their finances.