Indian telecom industry is already experiencing a throat cut competition and profits are mitigating day by day. Increased competition from new telco’s who are initially only looking to poach subscribers and the expenditure incurred on 3G spectrum and on purchase of equipment will be an add-on to ongoing deficit of Indiantelecom operators.
All telcos have already paid exorbitant amount for 3G auction and equipments. Bharti spent Rs 12,295 crore to get the 3G licence in 13 circles whereas RCom spent over Rs 11,000 crore and same is paid by Vodafone to acquire a licence in 10 circles. Vodafone also spent about $450 million to procure necessary 3G equipment.
After the launch of 3G services by private operators, sooner or lator competition will surely happen and it may lead to a wrost ever situation in Indian telecom industry. With 143 million users, Bharti Airtel is expected to post 19 per cent drop in profit for the second quarter of 2010. RCom is expected to report 45 per cent drop in profit. Moreover situation may not improve even in the next year as internet penetration very low in the country and still there is a huge need for affordable 3G enable devices which may kick start usage of 3G services in masses
After the launch of 3G services by private operators, sooner or lator competition will surely happen and it may lead to a wrost ever situation in Indian telecom industry. With 143 million users, Bharti Airtel is expected to post 19 per cent drop in profit for the second quarter of 2010. RCom is expected to report 45 per cent drop in profit. Moreover situation may not improve even in the next year as internet penetration very low in the country and still there is a huge need for affordable 3G enable devices which may kick start usage of 3G services in masses
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