Once the glorious revolutionary that led from the front and a driver of
economic change, the telecom industry in India today is riddled with
high debt, fierce competition, tariff wars and job cuts brought on by
massive technological change. Add to that the convergence of telecom,
media and Internet, or over-the-top (OTT) media services, that has
disrupted the telecom industry landscape. Could this be the end of
Indian telecom as we know it? Well, yes and no.
Over the last half a decade, the telecom sector has been turned upside
down and inside out due to the upheaval caused by policy changes, the
growing influence of Internet and OTT firms, and the disruptive market
entry of Reliance Jio. The "data drive" has made voice calling-until now
the bread earner-almost free. Moreover, data itself is selling at over a
95 percent discount compared with the prices just 18 months ago. In
such a fierce market, the very survival of telcos is at stake, unless they
consolidate and converge.
And consolidate and converge they have. A market of 10-12 national
players has collapsed to a market of just 3+1 players in a matter of six
quarters. Slashed tariff rates may have helped the telecom companies
stay afloat but have diluted their margins. Investments in new network
technologies and convergence-led inorganic moves have further carved
out the profits. Today, telecom companies are squeezed from every side
and are striving to cut costs by building leaner operations.