oppn parties Idea-Vodafone Merger: Welcome Consolidation

News Snippets

  • Former Pakistani cricketer Shoaib Akhtar proposes an Indo-Pak ODI series to raise funds for fighting coronavirus
  • Maharashtra government says many Tablighi Jamaat members who attended the Markaz and returned have gone into hiding
  • West Bengal government identifies hotspots in Kolkata and the rest of the state, inclined to extend the lockdown in those places only
  • Prime Minister Modi holds a video conference with floor leaders of opposition parties, hints at extending the lockdown
  • UP seals hotspots and makes masks mandatory
  • Masks made compulsory in Mumbai, violators will be arrested
  • ICMR says an infected person can infect 406 people in 30 days without social distancing and lockdown
  • Stock markets make a smart recovery. Sensex up by record 2476 points on global cues
  • Schools, colleges and shopping malls likely to remain closed for a further period of one month, says empowered group of ministers
  • PM Modi tells BJP workers that India is in for a long battle against the coronavirus and there is no scope to feel tired or defeated
  • PM Modi asks ministers to focus on exports and new areas and sectors
  • PM Modi asks ministers to prepare business continuity plan post the lifting of the lockdown
  • Corona cases in India cross 4000 and the death toll stands at 124
  • The government decides to double the testing of corona suspects from 10000 now to 20000 in the next three days
  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
COVID-19: 773 new cases and 32 deaths in the last 24 hours, reports the health ministry
oppn parties
Idea-Vodafone Merger: Welcome Consolidation

By Sunil Garodia
First publised on 2017-03-22 11:46:37

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.