Vodafone India’s chief executive Marten Pieters has expressed his belief that the market is heading for widespread consolidation as operators are not turning a profit.
“There are currently about a dozen players, with many of them making losses,” noted Pieters, without confirming whether Vodafone India would be interested in M&A.
Pieter’s views are shared by many observers across the industry. Competition has long been fierce in India, inflaming price wars and driving down profit margins.
There has been recent speculation that some of the market’s larger players may buy up their smaller rivals, with Vodafone India rumoured to be in negotiations with Tata Teleservices. In February, Bharti Airtel confirmed that it would acquire Loop Mobile once it received regulatory approval.
India’s recent spectrum auctions saw Bharti Airtel, Idea Cellular, Vodafone India and dark horse Reliance Jio Infocomm acquire the most. This may be an indication of which players will be driving consolidation in the market.
Pieters also noted that the country’s revisions to its M&A regulation would also encourage consolidation. The new rules are favourable to merged entities, raising their market share limit for subscribers and revenue from 35% to 50%.