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Mobile carrier consolidation in India

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Earlier this month Essar Group snapped up ailing BPL for $1 billion. Today, Tata-Birla combo bought out Cingular’s 33% stake in Idea Cellular for $400 million. Idea is India’s fifth largest mobile service provider with a subscriber base of 5.7 million. That puts the value at $210 per subscriber … a bargain even if the average ARPU in India is around $12 a month. In comparison Essar paid about $370 a subscriber.

2 Responses to “Mobile carrier consolidation in India”

  1. Hi,
    I thought you take figures seriously. You have mentioned that tata-birla combo bought cingular’s stake in $400 million, while the FE story you linked (guess you based your comment on that story only!) says the deal amount was $300 million. Now, who is corrent? The original source or the interpretor?
    Typo only? But we can’t take chance with figures! One digit can change the entire story.

  2. Carrier consolidation has a long way to go in India. Even if Idea, Spice, and Aircel disappears, and if BSNL and MTNL merge, this is just a start. This would leave five players in India: Hutch/Essar, Bharti, Reliance, Tata Teleservices, and BSNL/MTNL. Ultimately, this will be a four carrier market, and all four carriers will be integrated providers: ie fiber, Internet, Voice, ILD etc. Of all five majors, Hutch/Essar looks increasingly out of place as a pure-play mobile provider.

    Mark my works: Bharti, as a fellow GSM provider with a strong foreign backer Singapore Telecom, will eventually buy Hutch/Essar assets. BSNL/MTNL as state owned dinosaurs are too slow, and Reliance and Tata have staked their eggs in CDMA, not GSM.

    A bold prediction, I know, but I think five is too many: four is just right for India.