Bandwidth War of Telecom Operators in India

The data speed war has multiplied with tough competition from telecom operators. India is experiencing a phenomenal growth in data usage. In 2016, the best bandwidth for 4G internet i.e, 700 MHz was priced at a premium price. Telecom operators are competing over data services rather than voice calls. The telecom industry already witnessed few exit of telecom operators such as Videocon and Reliance Communications.

 Key components

M&A – The telecom industry in India witnessed few major M&A activities in last 3-4 years. Airtel acquired Telenor and thus brand Telenor made an exit from the Indian market. Airtel also acquired the spectrum of Aircel and Videocon. Airtel has gained strength in India with two more acquisitions, Qualcomm’s broadband business in India in 2013 and Augere Wireless in 2015. Airtel also acquired Tikona and its broadband wireless access spectrum.

5G – India has huge potential to witness growth in 5G as India has a huge customer base of telecom operators and telecom operators are competing to create revenue from data services. The Indian government is all set to auction 5G spectrum and roll out services by 2020. While Reliance Jio wants the government auction to be held immediately, Vodafone however has requested the government to hold the auction till 2020 as they need clarity what radio waves would be most beneficial for the 5G infrastructure.

The telcos are enhancing the 4G experience of the customers and are looking to bank on 5G roll out in 2020. The telecom market is expected to rise with wider adoption of data services in rural India. With 4G being adopted, India is expected to consume more data as demand for high definition videos is growing exponentially. It would be interesting to see whether 5G technology becomes successful in India and who takes the leap ahead of competition among players including BSNL, Vodafone Idea and Airtel.

– Swarup Bhowal,
Research Analyst – ICT,
Infoholic Research