UBS hosted a 2 day event for the Executives of Indian Telecom Industry. Here are the key takeaways from the meet.

  • The current tariff structure is likely to put pressure on revenue and profitability in the short term. Consolidation is likely to happen in the next 12-18 months
  • New operators have no business case as they can not match incumbent scale with their limited quantity and quality of spectrum
  • 3G auction is likely to happen by March 2010 and will segregate long-term players from newer operators

The current tariff war will lead to consolidation creating winners & losers in the sector. The incumbents are facing high competitive intensity primarily in the urban areas, while there is limited competitive pressure in the rural areas.

3G spectrum is likely to help reduce the spectrum constraints on 2G voice front. The spectrum will initially be used to decongest 2G network and then once applications develop the 3G network can be used for data. [ Where is the constraint for Spectrum for operators other than Bharti Airtel ?]