When Mukesh Ambali’s Jio entered the telecom market last year with free voice calls for life and free data for a limited period, it was clear that a shake-up was imminent in the market. At one point, India’s telecom market had close to a dozen players but competitive intensity had already whittled this number down to three large ones – Bharti Airtel, Vodafone India and Idea Cellular – and less than half a dozen fringe players. So when Jio trooped in with a promise of unlimited freebies and a known appetite to absorb losses, it was apparent that the telecom market pecking order had to change to survive.
If the Vodafone-Idea merger happens, then the merged entity and Bharti Airtel will together control over 70 per cent of India’s telecom market share by revenue.This obviously spells doom for remaining small players in Telecom.
We boast of high GDP growth in this country but a high nominal gdp invites more businesses to compete and reduces barrier to entry as allure of growth allows risk capital to chase and compete with behemoths. what is happening in India is completely opposite. Instead of new businesses starting and creating employment we are creating large oligopolies across sectors ( honestly in a country of 1.3 billion people can u name six paint companies?) and this process seems to be accelerating across sectors.