When Two Isn’t Always Better Than One.

After the fallout from Reliance Jio’s entry into the Indian mobile market, investors in Indian telecom companies got excited over the weekend with the news of a potential tie-up between Vodafone Group Plc’s mobile unit in that country and Idea Cellular Limited, currently India’s third largest mobile provider.

While India has a massive population and offers significant long-term growth potential in the form of both voice traffic and data (not even considering mobile money applications like MPesa), the billions of dollars needed to build out networks and continually invest in spectrum combined with 11 mobile providers meant that profits remain far lower than had hoped for.

Cell phones in India have become a commodity, and its not uncommon to see people with two mobile phones. Consolidation in the market was long overdue and while I was expecting the likes of Telenor India and Tata DoCoMo to lead a march toward consolidation, I’m glad the possibility of it actually happening is increasing.

You can read the Bloomberg article here:

https://www.bloomberg.com/news/articles/2017-01-30/vodafone-in-talks-to-merge-india-unit-with-idea-cellular

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