oppn parties Idea-Vodafone Merger: Welcome Consolidation

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  • Supreme Court approves two-child norm for government jobs in Rajasthan
  • DMK issues rocket ad with Chinese flag, PM Modi slams party
  • BJP alleges that Congress workers raised slogans like 'Pakistan jindabad' outside Karnataka assembly after the results for the RS polls were declared. CM Siddaramaiah promises stern action if claim found true
  • Calcutta HC says any agency can arrest absconding Sandeshkhali TMC strongman Sk Shahjahan
  • Himachal Pradesh Speaker suspends 15 BJP MLAs for unruly behaviour
  • Joint teams of Navy, NCB and Gujarat ATS seized a boat with 3200kgs of narcotics in high seas off Gujarat coast. Five crew members were also arrested
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  • Sunil Bharti Mittal of Bharti Enterprises was conferred the honorary Knighthood by Britain's King Charles III for services rendered in furthering business relations between the UK & India
  • RIL to merge Viacom18 with Disney's Star in $8.5bn deal, Nita Ambani to lead the board of merged entity
  • Vodafone Idea shares fall nearly 15% over fears of huge fund raising
  • Stock markets crash on Wednesday: Sensex loses 790 points to 72304 and Nifty 247 points to 21951
  • BCCI gets tough, removes Shreyas Iyer and Ishan Kishan from central contracts for missing Ranji Trophy. In a first, it starts fast bowling contracts to reward emerging players like Akash Deep and four others
  • Tennis: Sumit Nagal loses in first round of Dubai Duty Free tournament
  • WPL: UP Warriorz beat Mumbai Indians by 7 wickets
Bengal police arrests TMC leader Sk Shahjahan, the prime accused in the Sandeshkhali disturbances
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.
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.