Sharp ARPU fall makes consolidation look real in telecom

Talk of consolidation is partly due to Reliance Jio, which started a price war with its tariffs

The heady days of rising ARPU (average revenue per user) are long over. But the ARPU decline now is sharp and steady, which, combined with falling profits and in some cases serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.

Consider the latest financial numbers of Idea Cellular, which is already in merger talks with Vodafone. Idea has reported a consolidated net loss of Rs 383.87 crore in the quarter ended December 31, 2016. Sequentially, its ARPU fell nine per cent to Rs 157, from Rs 173 in the