Consolidation in the face of disruption

Posted on March 21, 2017  /  0 Comments

Reliance shook up India’s markets once, with what appeared to be an oxymoronic strategy of limited mobility. It worked. The market was transformed and the effects reverberated across the developing world.

In a different guise Reliance is back. The market is being transformed.

The explosion of internet usage has created cutthroat competition among carriers seeking ever faster mobile networks and cheaper data packages in a country where consumers are particularly sensitive to price. And the dynamic has prompted a flurry of investments and deals.

Reliance Industries, an Indian oil conglomerate, is plowing billions of dollars into a new cellphone operation called Jio that offers free data and voice plans. In a bid to compete, Bharti Airtel agreed last month to buy the Indian assets of Telenor, a Norwegian operator.

“Consolidation in the Indian market is the name of the game,” said Rishi Tejpal, an analyst in Gurgaon, India, for Gartner, a technology research company. “The survival of 10 to 12 local operators isn’t a long-term reality.”


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