The recent financial results from telecom service providers indicating early sign of recovery and also indicating future trend of sector. Post going through horrible four years of tariff war, license cancellation, ICR issue telecom sector was termed as kneel down sector by many analysts. On a contrary to the same, Industry incumbent players such as Bharti Airtel, Vodafone, Idea and RCOM took this period as an opportunity to realign their business model to reduce cost and at the same time started putting effort to shift the revenue dependency from voice to data. The recent results from top four players indicate that all of them managed to improve ARPU for both voice and data. Bharti Airtel ARPU is still the best and running at 200 INR whereas Vodafone and Idea is 192 and 174 respectively. On the ARPM, Idea and Reliance communications performed well whereas Bharti Airtel and Vodafone is in the process of realignment of free minutes. It is expected that Bharti Airtel or Vodafone may choose to raise voice tariff rates to improve on ARPM. In the data segment, Bharti Airtel ARPU is around $1 ( 60 INR plus) whereas the other players are more or less on the same level. The persistent concern area of Incumbent players are Mobile VAS and it is expected that they may observe another cycle of revenue fall from that business unit post stringent MVAS regulation amendment and implementation of consent gateway. With repositioned product, delivery and roadmap by Incumbent player, it would not be harsh to say that Challengers Mobile Service Providers would face uphill task to maintain their subscriber base even with free bees. Post the license cancellation, re-auction and limited geographical presence may play spoiler of challenger. It would be interesting to observe, how and when incumbent player launches subscriber sniffing services or products or plan to attract subscriber from Challenger service providers. In my point of view, Indian Telecom sector would again lead the growth trajectory of India very similar to 1990’s post liberalization.
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