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  1. Tata Tele and Telenor India candidates for consolidation; Idea may consider merger with an incumbent: Fitch

Tata Tele and Telenor India candidates for consolidation; Idea may consider merger with an incumbent: Fitch

Fitch Ratings sees Tata Telecommunications and Telenor India as candidates for consolidation in the telecom space.

By: | Published: September 14, 2016 1:38 PM
Fitch Ratings, Fitch telecom, Fitch Reliance Jio, Fitch Idea Cellular According to the ratings agency, the telecom sector may see some consolidation soon.

Fitch Ratings sees Tata Telecommunications and Telenor India as candidates for consolidation in the telecom space. According to the ratings agency, the telecom sector may see some consolidation soon. “Tata Tele does not have the required spectrum to launch 4G services. It is difficult for Tata Tele to defend its markets share,” Fitch has said. It is of the view that the telecom industry cannot accommodate more that four to five players in the long-run. “Incumbents will have to careful with future investments,” Fitch added.

Talking about the prospects of Idea Cellular, Fitch has said, “Idea is an efficient player operating in the market. It may look at a merger with an incumbent in the long-run.” Fitch’s statement comes at an interesting time when there is buzz in the market that Idea Cellular and Vodafone may be exploring merger options. Idea, however has denied any such speculation. Vodafone has declined to comment.

On the entry of Reliance Jio, Fitch said that data revenue may fall with the Mukesh Ambani-owned telecom venture introducing competitive rates. At the time of Jio’s launch, Fitch had said, “Jio’s bundled offerings are very compelling. The tariff is cheaper than anticipated by almost 25-30%. We believe that lower tariffs will hurt the margins of existing telcos. We expect pain for existing telcos for the next 12 months, but they will also benefit from the high data market created by Jio.” Fitch had also said that it sees the industry blended tariff falling by 10-15 per cent in the next year.

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  1. Xerxes Shah
    Sep 15, 2016 at 11:34 am
    Telenor is much better than tata Docomo. Docomo has a pathetic network, and that with not so compeive tariffs. Hope the possible merger doesn't ruin it for Telenor users.
    Reply

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