‘Consolidation has to take place in telecom’ | business | Hindustan Times
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‘Consolidation has to take place in telecom’

While new telecom service providers have kicked off a price war in the competitive market, established players are feeling the pinch. Sanjay Kapoor, the deputy Chief Executive Officer of Bharti Airtel, the country’s largest telephone service firm, spoke to Hindustan Times on the charged scenario.

business Updated: Dec 07, 2009 22:50 IST
Manoj Gairola

While new telecom service providers have kicked off a price war in the competitive market, established players are feeling the pinch. Sanjay Kapoor, the deputy Chief Executive Officer of Bharti Airtel, the country’s largest telephone service firm, spoke to Hindustan Times on the charged scenario. Excerpts from the interview:

There are about 10 service providers in a circle today and a price war out there. Is there a pressure on revenues?

Yes, there is pressure on revenues. But the good news is that India still remains one of the most attractive markets in the world. In India, minutes of usage is growing. Rural teledensity is only 19 percent. However, the bad news is that the number of operators far exceeds what the market can sustain. In my opinion, India is passing through a phase of hypercompetition.

How long will this situation continue?

I cannot guess on it. Whatever is happening is not sustainable in the long run. We produce close to 1.6 billion minutes daily. We are the largest network in the world. We know the cost of providing services. We believe that most of the players are not playing on a cost-based economy. Consolidation has to take place.

Do you think this will have an impact on your revenues?

In any hyper competitive market, revenues do take a hit in short run. We are prepared for that. Revenue and market share is of prime concern to us. We will offer the best to the customers.

What will be your strategy?

Bharti has a distinct edge in the market. Over 113 million customers give it leverage. Airtel enjoys the best cost structure and network factory that an operator runs in any part of the world. Whether it is outsourcing partnership and alliances, its brand is Numero Uno. We have a healthy balance sheet. I think all these factors will help in maintaining Airtel’s leading position.