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Will Smaller Telcos Survive?
Jun 14, 2016

Here's an interesting statistic. Did you know that the telecom industry is moving toward an oligopolistic situation? In other words, the top three players control three quarters of the market! Bharti Airtel, Vodafone India, and Idea Cellular garner about 75% of the industry's revenues. And this trend remains intact.

As today's chart shows, all other players have been steadily losing market share. This is an inevitable fallout of the clean-up that this industry was in need of. The 2G scam had resulted in an unsustainable competitive situation. After the Supreme Court cancelled 122 licences, it was clear to us that only the strongest will survive.

The good news for the consumer is that the growing dominance of these three firms has not resulted in rising phone bills. Competition is still quite fierce and the entry of RJio later this year will lead to even lower rates. This will be good for the consumer. However, RJio's entry will probably be the end of the road for the remaining small players.

Data Source: Business Standard

This Chart Of The Day was published in The 5 Minute WrapUp - Do Long Surviving Companies Make For the Best Investments?

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