Telecoms sector heading into second round of consolidation, report says

Providing services such as broadband connectivity, cable TV, enterprise solutions and payment wallets is the need of the hour for telecom operators, and a second wave of consolidation is on the industry, a said a rating agency on Tuesday.

India Ratings and Research said the industry, which has been battered following the aggressive entry of Reliance Jio, will continue to show signs of recovery in a supportive regulatory environment and have maintained a “stable” outlook for the industry over the past year. exercise 22.

The second round of consolidation (Consolidation 2.0) is taking off in the industry, which will lead to a transformation of the business models of telecommunications companies, leading to the evolution of incumbents from traditional voice service providers to digital solutions complete sets for households, he says.

Along with wireless mobility, telecom operators will need to provide services such as broadband connectivity, cable TV services (direct to home), enterprise solutions, electronic payment wallets / platforms, music applications and the over-the-top transmission platform.

Such bundling of services with traditional mobile wireless services has become the “need of the hour” to ensure customer loyalty and expand the market footprint, the agency said.

It can be noted that the sector was once a very busy area with up to half a dozen operators to choose from. However, over the past five years, operators like Vodafone and Idea have gone for a meger, some have pulled out and some have also been forced into bankruptcy due to financial difficulties.

Among the operators, he said that Jio has a strong or moderate presence in all allied services except the enterprise segment where it is non-existent, while Bharti Airtel lacks a broadcast presence and Vodafone Idea is not present in broadcast, payment and home portfolios.

The increase in data usage and the growing proportion of higher average revenue per user for data customers in the overall subscriber mix indicates that, even without tariff increases, the industry is structurally moving towards a revenue regime. average per user higher, he said.

The intensity of competition has eased over the past year, as evidenced by the narrowing price differentials between telecom operators, he said.

The evolution of the industry over the next few quarters will remain a controllable key as it will determine whether the Indian mobility market will remain a 3 + 1 actor market or move to a 2.5 + 1 actor market and how operators will respond to the next phase of consolidation in the industry, the agency said.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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