Freebies from Reliance Jio hasten Indian mobile consolidation

New entrant Reliance Jio has changed the economics of the mobile market

India’s largest operator, Bharti Airtel,  is to acquire the Indian mobile business of Norwegian carrier Telenor, in an apparent move to counter the impact of disruptive pricing by new entrant Reliance Jio Infocomm.

The deal is the latest among carriers aiming to consolidate their operations in India. Vodafone Group confirmed recently that it was in talks with Indian operator Idea Cellular for a merger, while earlier Reliance Communications entered into an agreement in September to merge its wireless business with Aircel, a smaller mobile operator.

The consolidation could help users as larger companies will be able to use spectrum more efficiently and invest in new technologies quickly, according to analysts.

A unit of the large Reliance Industries with deep pockets, Jio upset the plans of entrenched rivals by offering 4G services free for close to six months, garnering 100 million customers in the bargain.

The company, which plans to start charging from April 1, has indicated it will continue to undercut its rivals.

The competition from Jio has led companies to rethink their strategies, but there are also other factors at play in the consolidation, said Amresh Nandan, research director at Gartner. There were far too many players in the market and they were holding chunks of spectrum that they were not using efficiently, he added.

A number of companies were also not able to make the large investments required in new technologies like 4G and convergence and may have looked at an exit instead, Nandan said.

A deal with Telenor will give Airtel, with over 269 million subscribers, access to the Norwegian company’s running operations in seven service areas across six Indian states, apart from boosting Airtel’s spectrum in the seven areas by the addition of 43.4MHz in the 1800 MHz band. Telenor India has about 44 million subscribers.

Jio’s winning streak so far may begin to slow down after it starts charging, as customers will start looking for value for their money from the service, Nandan said. In the long term it is better for the consumer to have an industry where there is no predatory pricing but instead well-capitalized companies compete and innovate, he added.

Every time a player enters with predatory pricing it may appear to help customers in the short term, but it is not the best thing for the industry and the consumer, Nandan said.

India had 1.1 billion mobile subscribers at the end of December, according to data from the Telecom Regulatory Authority of India. It added nearly 28 million new subscribers in that month.

The financial terms of the deal between Airtel and Telenor, which is expected to close within 12 months, were not disclosed.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments



Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?