The new head of India’s GSM lobby group Coalition of Cellular Operators Association (COAI), TR Dua, is urging the government to amend existing M&A regulations to pave the wave for much-needed operator consolidation.
India is in the midst of a damaging mobile price war.
The price war has been raging since June, when Tata Teleservices (TTSL) launched the country’s first per-second billing option.
The tariff battle has left the country’s operators – there are now some 12-14 cellcos per circle following the recent launch of several new GSM1800 operators – struggling for profits.
“We need a progressive mergers and acquisition policy that doesn’t present barriers to consolidation,” Dua said in an interview in New Delhi. “The market now is hyper competitive.
“There should be only about four, at best five players competing [in a given circle], as is the case in any developed industry.”
Dua said India is likely to see domestic consolidation this year if the Telecom Regulatory Authority of India (TRAI) relaxes M&A norms, especially one mandating that no two mobile operators merge until three years after their spectrum licenses expire.
Dua was promoted to Director General of COAI in late-November, replacing TV Ramachandran, who is now director regulatory affairs for operator Vodafone India. Dua was formerly COAI’s Deputy Director General.
“The industry needs to see revenues,” said Dua. “Profits are declining even as subscriber numbers increase. This is not sustainable in the long-term.”
In November, India added record mobile net additions of 17.6 million subscribers, a 6% growth on October, which was also a record month for the industry.