With competition on Indian telecom space increasing, chance of a major overhaul going to happen soon. According to various media reports India’s major telecom operators Tata Teleservices which operate Tata Docomo, Aircel and Sistema which operates MTS are in initial talks for a three-way merger. If in any way this merger goes through it will create India’s third-largest telecom operator by mobile subscribers base behind market leader Bharti Airtel and Vodafone India.
“There was a fair amount of discussion between Tata Teleservices and Sistema. The discussion between Tata Teleservices and Aircel is very new. These are early days.” said an unknown source to Economic Times.
While checking the operators performance in the first quarter of 2013, all were losing mobile subscribers in mass. In addition Tata Teleservices which is actually a joint venture between Tata Group and Japan’s largest mobile company NTT DoCoMo have their debt of around Rs 23,000 crore and similarly Aircel have been struggling to pare their debt of Rs 22,000 crore. As of TRAI‘s latest telecom subscription data as on 31st May 2013, Tata Teleservices have only 7.50% of the telecom market share in India followed by Aircel with 6.94% market share and Sistema with 1.16% market share.
“The Indian telecom market was ready for consolidation and one shouldn’t be surprised to see more than two operators come together,” said Vsevolod Rozanov, Sistema Global Chief Financial Officer recently in a press meet.
If the merger goes through successfully then the three companies can cut costs, share their infrastructure and pool maximum capital. This merger will be surely bring competition to Indian telecom leader Bharti Airtel and Vodafone India, but may more effect Govt run BSNL and MTNL which are struggling hard to keep up the phase with private operators.