With a lot happening on the consolidation front in the telecom space with high profile business combinations of Bharti Airtel and Telenor India and Idea-Vodafone merger on the cards, Sunil Bharti Mittal,the Founder & Chairman of Bharti Enterprises says that he sees the Indian telecom space at 3 plus one–three major telecom behemoths and the state-run BSNL in the sector going forward. Speaking on the occasion of India Mobile Congress event, Sunil Mittal said, “India will be a market of 3+1 operators, the telecom sector offers a lot of growth potential.”
On similar lines, Airtel’s top man Gopal Vittal had told ET Now, “In the next 12-18 months, we’ll probably be left with only three operators plus BSNL from the current eight players, which is a good thing as this industry needs a lot of investment.”
In his speech, Sunil Mittal outlined Bharti Airtel’s investment plans and said that Airtel will be investing Rs 18,000-20,000 crore this year in infrastructure. Together, the huge telecom players including Reliance Jio Infocomm, AIrtel and BSNL will be investing Rs 50,000-60,000 crore to build infrastructure in the year, he said. In his address, he underlined that the companies must come together for benefits of consumers. Further, he urged the government to take steps for laying fibre and towers to augment India’s digital thrust. According to him, the government is well aware of the shortages in telecom sector in India.
The telecom sector is reeling under massive financial stress, after India’s telecom regulator, TRAI cut interconnect usage charge (IUC) to 6 paise a minute from October 1. Goldman Sachs estimates that Bharti Airtel’s cash flows will reduce by more than $150 million due to the rate cut. Goldman Sachs estimates that the IUC cut will cause a heavy $250 million dent to the annual cash flows of Idea Cellular.
The Indian telecom space is looking to take a big leap. Sunil Mittal said,”Together with Mukesh Ambani, we will build technology for the future.” Reliance Industries, India’s most valued company, is indeed a very important piece in the telecom puzzle.
The government has created an inter-ministerial group to recommend measures for resolving financial stress in the sector that is reeling under Rs 4.6 lakh crore debt. The incumbent operators have blamed that competition intensified by Reliance Jio’s disruptive offering for their financial woes. Email query sent to Reliance Jio elicited no immediate reply.