Indian telecom market crowded by new entrants
Monday, 14 December 2009
NEW DELHI, Dec 13 (Economic Times): Stein-Erik Vellan, head of Norway's Uninor, the newest Indian mobile phone operator, insists his company will be one of the survivors in what has rapidly become a very crowded market.
Uninor, controlled by Norwegian telecom company Telenor, is the 14th player to enter India's cellular market, where subscriber numbers are rising so fast that in October the country added a record 16.67 million users.
But after soaring growth, industry revenues are flattening as rivals slug it out in a savage price battle. Analysts predict a brutal shake-out in the next 18 months.
"We know this is only the beginning of our journey - we're here for the long term," Vellan said at Uninor's launch earlier this month in New Delhi.
Using the slogan "My time is now," squarely aimed at India's burgeoning youth, Uninor says it is unfazed by forecasts of consolidation in the market, which in 2000 had just two state-owned players.
"This is the fastest growing (mobile) market in the world. We want to be part of this story," said Vellan, managing director of Uninor, a joint venture of Telenor and Indian property developer Unitech.
Telenor is among a clutch of foreign telecom companies along with Britain's Vodafone, Japan's NTT DoCoMo and Russia's Sistema JSFC that have beaten a path to this country of 1.2 billion people in the past couple of years hoping to boost revenues and make up for saturated domestic markets.
The Cellular Operators' Association of India forecasts the country's mobile phones will number one billion by 2013, up from around 500 million currently.
Another four such launches are expected by March as new players tap the market. Among those in the wings are Emirates Telecommunications Corp, or Etisalat, along with India's Datacom Solutions and Loop Telecom.
But industry leaders and analysts say the market, even with leaping subscriber numbers, is getting too congested.
"The industry cannot support this many operators. Consolidation is the only way forward," TR Dua, director general of the Cellular Operators' Association of India, told the reporter.
Already a no-holds-barred price war has driven down billing rates to under a cent a minute, hitting revenues and profits of market leaders such as Bharti Airtel and Reliance Communications.
Uninor, controlled by Norwegian telecom company Telenor, is the 14th player to enter India's cellular market, where subscriber numbers are rising so fast that in October the country added a record 16.67 million users.
But after soaring growth, industry revenues are flattening as rivals slug it out in a savage price battle. Analysts predict a brutal shake-out in the next 18 months.
"We know this is only the beginning of our journey - we're here for the long term," Vellan said at Uninor's launch earlier this month in New Delhi.
Using the slogan "My time is now," squarely aimed at India's burgeoning youth, Uninor says it is unfazed by forecasts of consolidation in the market, which in 2000 had just two state-owned players.
"This is the fastest growing (mobile) market in the world. We want to be part of this story," said Vellan, managing director of Uninor, a joint venture of Telenor and Indian property developer Unitech.
Telenor is among a clutch of foreign telecom companies along with Britain's Vodafone, Japan's NTT DoCoMo and Russia's Sistema JSFC that have beaten a path to this country of 1.2 billion people in the past couple of years hoping to boost revenues and make up for saturated domestic markets.
The Cellular Operators' Association of India forecasts the country's mobile phones will number one billion by 2013, up from around 500 million currently.
Another four such launches are expected by March as new players tap the market. Among those in the wings are Emirates Telecommunications Corp, or Etisalat, along with India's Datacom Solutions and Loop Telecom.
But industry leaders and analysts say the market, even with leaping subscriber numbers, is getting too congested.
"The industry cannot support this many operators. Consolidation is the only way forward," TR Dua, director general of the Cellular Operators' Association of India, told the reporter.
Already a no-holds-barred price war has driven down billing rates to under a cent a minute, hitting revenues and profits of market leaders such as Bharti Airtel and Reliance Communications.