Three private players offer ideal, healthy competition: Vodafone Idea CEO

The telecom sector has witnessed a spate of consolidation aimed at finding economies of scale after Reliance Jio stormed into the market ploughing in billions of dollars into a pan-India national 4G data service, offering free voice call and tariffs well below prevailing rates.

Vodafone Idea has said the Indian telecom market with three private players is an "ideal scenario" in terms of healthy competition. Image source: Reuters

Vodafone Idea, which is in the midst of Rs 25,000 crore mega fund-raising, has said the Indian telecom market with three private players is an "ideal scenario" in terms of healthy competition, dismissing any possibility of cartelisation or duopoly. "It is three private players plus one (BSNL and MTNL) and that is the ideal scenario to be. There are four players here...It is an ideal level of competition," Balesh Sharma, CEO of Vodafone Idea told PTI. Worldwide, markets with three private players are known to be markets where constantly there is an ongoing war but a healthy level of competition exists, he added.

Sharma said a market with three strong players almost equal to each other "is an ideal place to be" as "they all want to become bigger and are fighting with each other". "There is absolutely no concern for duopoly also...Because I believe in a democracy all policy makers, politicians, and everyone understands that for consumers' rights there needs to be at least three strong private players and hoping that the government player also continues to be in that...," Sharma said. Such a scenario will keep the competition level at an "optimal", he noted.

The telecom sector has witnessed a spate of consolidation aimed at finding economies of scale after Reliance Jio stormed into the market ploughing in billions of dollars into a pan-India national 4G data service, offering free voice call and tariffs well below prevailing rates.

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This triggered a massive consolidation in the industry. Bharti Airtel, then number one operator, fired the starting gun with the acquisition of the Indian business of Norway-based Telenor. It also subsequently announced takeover of consumer mobile businesses of Tata Teleservices Ltd (TTSL) and Tata Teleservices Maharastra Ltd (TTML).

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Last year, Idea Cellular and Vodafone Plc announced completion of the USD 23.2 billion (approximately Rs 1.6 lakh crore) merger of their India operations to create the country's largest telecom operator -- Vodafone Idea -- to take on competition from Reliance Jio.

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