Telecom industry consolidation spree

Tata Teleservices and Reliance Communications(RCom)-Aircel-MTS combine are considering joining forces to counter the tough competition coming from Reliance Jio. The launch of brand Jio kicked off fierce competition in the telecom space and gradually it has led to a phase of consolidation in the telecommunication industry. It may be recalled here that Vodafone and Idea Cellular are already in advanced stages of working out a merger.

If RCom has its way then the combined entity (with the four players RCom-Aircel-MTS-Tata Tele) will become the third largest telecom player in the country after the proposed Vodafone-Idea combine and Bharti Airtel.

Out of the 12 telecom players in India, Tata Teleservices ranks ninth with a subscriber base of roughly 53 million. If the merger gets through, then the combined entity Tata Teleservices and RCom-Aircel-MTS will have around 260 million subscribers and a market share of over 18 per cent.  On the contrary, Airtel has 266 million users and it holds 31 per cent share. At the same time, Vodafone has 205 million users and 23 per cent market share and Idea Cellular has 190 million users with 19 per cent market share in terms of revenue.

The share prices of Tata Teleservices and RCom increased by 6.95 per cent at Rs 6.46 and 4.68 per cent at Rs 34.8 in an intraday basis on Monday.