Questions for 2020: Telecom becomes a duopoly?

Likely, if Vodafone idea will get no aid. Vodafone Idea chairman Kumar Mangalam Birla lately warned the struggling telco can be pressured to close store if no authorities aid is forthcoming on its AGR-linked statutory dues.

The loss-making telco is hit hardest by a latest Supreme Court verdict – that backed the federal government’s wider definition of adjusted gross income (AGR) – and faces Rs 53,039 crore of statutory dues it must clear in a few month.

So will the brand new 12 months hasten additional consolidation and ring in a two-player telecom market?

The reply is sure, if Vodafone Idea doesn’t get aid on its AGR dues from the federal government or judiciary. Especially as there was a gentle fall within the firm’s buyer and income shares amid decrease comparative 4G capex spends. A duopoly construction, comprising Reliance Jio and Bharti Airtel as the one two non-public telcos, may enhance telecom tariffs, leading to an upside for Airtel, which has additionally been stung the apex courtroom’s AGR verdict.

But is the state of affairs doubtless? Experts doubt it, on condition that the federal government has publicly said that three non-public gamers are required to serve over 1 billion mobile phone customers. GoI, the truth is, can unwell afford a Vodafone Idea collapse, as it could badly harm India’s picture amongst international traders and led to large job losses.

This, although, wants motion from each side: Vodafone Idea’s promoters — Vodafone UK and Aditya Birla Group – have to have a change of coronary heart and pump in contemporary fairness into the telco. At the identical time, the federal government, after giving some money stream aid by permitting a two-year spectrum cost moratorium, wants to chop some levies.

Another silver lining, consultants say, is the chance of a possible ground worth for voice and knowledge companies subsequent 12 months, which on the again of the deferment of zero IUC regime, may show a veritable lifeline for older carriers, significantly Vodafone Idea, and enhance its enterprise continuity prospects.

All issues stated, at greatest, Vodafone Idea is more likely to find yourself a distant third participant after the mud lastly settles.

This story is part of the ’20 Questions for 2020′ package.

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Tarun Banerjee

Professional Web Designer & Developer,Expert in SEO & Digital Market, Founder of Tech Hunt.

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