oppn parties Idea-Vodafone Merger: Welcome Consolidation

News Snippets

  • Trouble brews in Bihar JD(U)-BJP alliance as Bihar police asks special branch officers to keep tabs on RSS activities
  • Trust vote in Karnataka assembly today. With rebel MLAs deciding to stay away after the SC order, the Congress-JD(S) government is likely to fall as it does not have the numbers
  • Amit Shah says the government will identify and deport illegal immigrants from all parts of the country
  • Reports from Pakistan confirm that Hafiz Saeed has been arrested and sent to jail
  • After the SC order, Karnataka Speaker says he will go by the Constitution in deciding on the resignations of the 16 MLAs
  • Rebel MLAs say they will not attend the trust vote on Thursday
  • Supreme Court rules that rebel MLAs cannot be forced to attend the assembly and vote in the floor test
  • Both the Centre and the Assam government have sought re-verification of up to 20% of draft NRC data
  • Pakistan opens its airspace for Indian planes
  • Dilapidated building collapses in Mumbai, killing more than 10 people while many were still trapped
  • Kulbhushan Jadhav case verdict to be delivered today by the ICJ
  • A Vistara flight landed in Lucknow with just 5 to 10 minutes of fuel left in the tank
  • Supreme Court to decide on Karnataka MLAs plea today
  • Karnataka alliance to face floor test on Thursday
  • China says that the next Dalai Lama will be appointed by it
International Court of Justice agrees with India, stays Kulbhushan Jadhav's execution. It asks Pakistan to allow consular access to the accused.
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.