Monday, March 21, 2011

AT&T to buy T-Mobile. Signs of consolidation in the telco markets??

Source: LA Times

If approved by regulators, this would create the largest telco in US with 130 million subscribers (Verizon - ~94 mil subscribers) and the market will see more such attempts.

IMO, if there is any country with real requirement (from $ & c perspective) that would be India. Right now there are more than 15 operators with licenses and at least 4 to 5 major players in any of the region. Bharti, Reliance, Vodafone, Idea, Aircel & BSNL controls majority share. Regional players like Spice, MTNL, BPL gained respectable share and continue to create competition in their respective markets. New entrants like Etisalat, Videocon, Unitech, S Tel have not started their operations but showed great ambitions. Also TRAI didn't rule out the possibility of opening up for more MVNO's.

I don't think any other country has such a huge number of players in the market and there is a great need of consolidation. Big guys like Bharti, Voda, Rcom may target regional players and small players. But a perfect surprise would be if they manage to merge. They can streamline their operations, reduce their capital expenditure and improve profitability which is good for them as well as the overall market.

Singapore, I don't see any such possibility with the three players in a perfect Oligopoly market. I remember IDA tried to introduce a fourth player but finally distributed the spectrum to the three players.

Malaysia, Thailand, Indonesia, & Philippines markets are similar in nature with high barriers and lots of uncertainties.

So overall in the ASEAN region I don't hope for M&A but in the South Asia I do hope that M&A activities rise and create a balanced market.

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