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.
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.
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.