<b>Devangshu Datta</b>: Telecom profits won't improve soon

Ongoing consolidation to benefit the sector over the long run

The “Jio effect” has accelerated an existing trend towards consolidation in the telecom industry. Reliance Communications (RCom)-Aircel, Vodafone-Idea, and now Airtel-Telenor are all potential merger or acquisition deals. RCom-Aircel has run into some trouble due to the ongoing 2G spectrum cases. There have also been credible rumours and denials of talks between RCom, Tata Teleservices (unlisted) and Tata Tele Maharastra (listed).  

If these deals come through, the merged entity, ‘RCom-plus’, would have about 260 million subscribers and about 18 per cent revenue market share. Similarly, if Vodafone-Idea happens, it would have about 395 million subscribers and about 40 per