India’s mobile phone subscribers topped 1 billion in 2015, making it the only country after China to cross that milestone. Serving this user base are as many as 11 operators, with the twelfth likely to join the bandwagon soon, further intensifying competition.

While there have been concerns about the stiff competition in the sector, which prompted Fitch Ratings to downgrade its 2016 outlook for the Indian telecom in­dustry from stable to negative in Nov­e­m­­ber 2015, the new merger and acquisition guidelines have lent positivity to the sector. In fact, consolidation has already begun despite many of the large telcos being stretched financially owing to huge commitments towards capital for 2G and 3G network roll-outs and spectrum auctions. Experts say this is essential to achieve scale and get access to the capital required for effective competition. It is expected that, following a likely shake-out, only five or six large operators will emerge with smaller players either exiting the market or getting acquired.

In what is likely to be a three-way merger, Reliance Communications (RCOM) is reportedly in merger talks with smaller rival Aircel, and has already closed a deal to acquire AFK Sistema’s Indian wireless unit. Idea Cellular, the current number three wireless carrier in terms of subscriber base, has bought airwaves from Videocon Telecommuni­cations. In December 2015, Bharti Airtel acquired the balance 26 per cent stake in Augere Wireless, which holds 4G spectrum in Madhya Pradesh, making it a wholly owned subsidiary of the company.

Several other positive developments marked the industry landscape in the past one year. Successful spectrum auctions in early 2015 led operators to aggressively roll out 3G networks, which facilitated further growth of data. All 4G spectrum holders, except Reliance Jio Infocomm Limited (RJIL), began commercial roll-outs of these high speed services in 2015. As a result, the industry witnessed data-driven growth, enabling operators to im­prove their top lines.

As of November 2015, Bharti Airtel holds the top position in the Indian wireless market with a 23.85 per cent share, followed by Vodafone India with 19.02 per cent, Idea Cellular with 16.91 per cent, RCOM with 10.58 per cent, Aircel with 8.42 per cent, Bharat Sanchar Nigam Limited (BSNL) with 8.06 per cent and Tata Teleservices Limited (TTSL) with 6.03 per cent. The top three telcos have clearly consolidated their position in the past one year as their combined wireless market share has increased from 57.69 per cent in November 2014 to 59.78 per cent in November 2015. takes a look at the performance of telecom operators in 2015 and the key initiatives taken by them during the year…

Bharti Airtel

In June 2015, Bharti Airtel became the third largest telecom service provider in the world in terms of mobile subscriber base. As of end-2015, its consolidated subscriber base stood at over 330 million across various businesses in India, South Asia and Africa.

During the past one year, the company has strengthened its market as well as financial position. In fact, considering the pressures telecom firms are currently fa­cing, Bharti Airtel appears to be relatively better placed with its improved spectrum assets (owing to its spectrum buy in the 2015 auctions), and strong financial position as reflected in its financial results. It has also partially exited some of its businesses in Africa to consolidate its operations in the continent.

While it has been increasing its 3G footprint at a fast pace, the key highlight of the company’s operations during 2015 was the expansion of 4G services. As of end-December 2015, Airtel had launched these services in over 350 towns and cities.

In 2010, Airtel had acquired airwaves in the 2300 MHz band in Kolkata, Maharashtra, Punjab and Karnataka, and later acquired chipmaker Qualcomm’s airwaves in Delhi, Mumbai, Kerala and Haryana. In 2015, it bought spectrum in the 1800 MHz band through auctions. In these two bands, Airtel has 4G spectrum in 15 circles. In order to further increase its spectrum holding, the operator has recently bought a 74 per cent stake in Augere Wireless Broadband India. Augere had also won a block of 20 MHz of 4G spectrum in the 2300 MHz band in the Madhya Pradesh and Chhattisgarh circle in the 2010 auction.

In November 2015, the company an­nounced the launch of a massive network transformation programme, Project Leap, to improve network quality and deliver the best customer experience. This strategic project will see an investment of Rs 600 billion in the next three years.

Project Leap will involve the deployment of over 160,000 base stations over three years, effectively doubling its presence from what it has on the ground today. For 2015-16, Airtel planned a deployment of over 70,000 base stations, making it the largest deployment in a single year by the company.

The company estimates that by March 2016, over 60 per cent of its network will be mobile broadband enabled. It is aiming to provide broadband for all in India and a better indoor experience in every city. As part of the project, Airtel will expand its mobile broadband coverage to all towns and over 250,000 villages by March 2016. In three years, Airtel plans to offer mobile broadband to over 500,000 villages in the country.

Meanwhile, the company plans to deploy over 100,000 connectivity enablers, as part of its strategy, through a combin­ation of Wi-Fi hotspots, small cells and indoor solutions. To meet the growing demand for data services in India, Airtel aims to cumulatively deploy more than 550,000 km of domestic and international fibre to drive down latency, improve customer experience and meet the growing demand for data services.

Financially, the company is in a strong position. It reported a 10 per cent increase in its consolidated net profit to Rs 15.23 billion for the quarter ended September 2015, owing to growth in data traffic. Its consolidated mobile data revenues grew by 49.8 per cent to Rs 38.06 billion, boos­ted by data traffic growth of 76.3 per cent. Its data ARPU increased by Rs 42 to Rs 193 (year on year) in the reported quarter, led by a 35.9 per cent increase in data usage per customer.

The outlook for Airtel remains positive as it has taken several encouraging steps to maintain its leadership position. The acquisition of considerable spectrum across frequency bands will enable it to fill coverage gaps and expand its voice and data services to newer cities and towns. Although its short-term operational performance could be affected by the entry of RJIL, Airtel’s long-term position remains strong, given its pan-Indian reach and loyal customer base.

Vodafone India

Vodafone India is currently the second largest operator in the country, with a subscriber base of 189.48 million as of October 2015. It caters to nearly one-fifth of the wireless market, second only to Bharti Airtel.

Financially, too, the operator is on a solid footing. With buoyant data growth, it posted service revenues of Rs 229.02 billion for the first half of 2015-16, an 11.2 per cent rise in comparison with Rs 206.01 billion in the corresponding period of 2014-15. The company has been going from strength to strength on the 3G front, with its 3G revenues recording a 102 per cent year-on-year growth during the same period. As a result, its earnings before in­te­rest, taxes, depreciation and amortisation (EBITDA) rose to Rs 65.34 billion compared to Rs 61.21 billion during the preceding reporting period, with an EBITDA margin of 29.7 per cent.

Data remains a key focus area for Vodafone, with the company deriving significant returns from its investments in 3G. During the year, it has been working towards modernising its existing 2G/3G network, making it more technology and energy efficient with capabilities of moving to 4G. It added more than 4,000 km of optical fibre cable (OFC) in the first half of 2015-16, taking its fibre footprint to 154,000 km. The company launched 4G services in India in December 2015, beginning with Kochi in Kerala. It has invested Rs 7 billion in network expansion in Kerala for 3G and 4G in the past 18 months.

Vodafone India believes that 4G will initially succeed mainly in the metros where customers are well travelled and exposed to global market trends. It has announced 4G roll-outs in four metros, Mumbai, Delhi, Bengaluru and Kolka­ta, before March 2016. In the February 2014 auction, it had acquired additional 4G spectrum in five circles: Mumbai, Delhi, Kolkata, Kerala and Karnataka. These circles together account for close to 50 per cent of the operator’s total data revenues. Globally, Vodafone has launched 4G in 19 countries.

Apart from data, Vodafone has ventured into several other segments to diversify its growth avenues. Enterprise is fast emerging as a key area, with Vodafone Business Ser­vi­ces, the operator’s enterprise business unit, aiming to double revenues in the next four years. It is also betting big on the machine-to-machine (M2M) space. The M2M market is growing exponentially in India, and industries like automotives, utilities, financial services and transportation are finding huge business value in this innovation. Vodafone’s entry in the 4G technology segment will also help it consolidate its position in the enterprise industry.

Another focus area for the operator is the opportunity in the mobile money market. In February 2014, Vodafone applied to the Reserve Bank of India for a payments bank licence to leverage its massive network coverage in the mobile payments space. It was granted the licence in August 2015. The company’s m-Pesa initiative is already a success.

In terms of new subscriber acquisitions, the operator is paying attention to the rural segment. It has launched an SMS-based service called KisaanMitr, which allows farmers to access real-time customised information on agricultural services. This offering is available in 10 languages, and farmers can sign up for getting three free SMSs every day. This initiative has an estimated potential of benefiting 70 million farmers by 2020.

Vodafone India is also preparing to launch an initial public offering. How­ever, it has not announced any timeline for the same.

Idea Cellular

Over the past five years, Idea has come a long way from being a fringe regional player to becoming a pan-Indian telecom major. As per data from the Cellular Operators Asso­ciation of India, Idea’s subscriber base stood at 167.29 million as of October 2015, the third highest in the industry. This exemplary growth has been possible on the back of a robust and ever-expanding telecom network, spectrum acquisitions, leveraging emerging business opportunities, and significant branding exercises.

In December 2015, the company enter­ed the 4G space and has so far launched the service in the Chhattisgarh, Haryana, Madhya Pradesh, Punjab, Andhra Pradesh and Telangana, Karnataka, Kerala, Tamil Nadu and Chennai circles.

In November 2015, Idea Cellular purchased Videocon Telecom’s spectrum in two circles, making this India’s first ever spectrum trading deal. On a broader level, this move can be seen as one that will strengthen the ongoing trend of sector consolidation. It will also help Idea offer 4G services in the Gujarat and Uttar Pradesh (West) circles where the operator did not manage to win spectrum in the 1800 MHz band in the previous auctions.

During the first two quarters of 2015-16, the operator spent Rs 31 billion on network expansion and installed 16,485 sites (2G and 3G). During the same period, it added 7,000 km of optical fibre cable to reach 100,400 km of fibre across the country. Most of its sites are now being integrated on the single radio access network technology, where two technol­ogies can run on the same radio frequency. For instance, in the 1800 MHz band, Idea can provide GSM as well as 4G services to its customers.

To tap the opportunities in the digital payments segment, it has joined hands with Aditya Birla Nuvo to bid for a payments bank licence. The financial venture will profit from the operator’s large rural subscriber base and retail presence in 375,000 villages across India. These services are expected to be launched by December 2016. Idea already has a prepaid payment instrument licence and 150,000 subscribers for its digital wallet.

The company has been on a strong wicket financially. It posted a year-on-year increase of 7.15 per cent in its net profits, from Rs 7.55 billion during the quarter ended September 2014 to Rs 8.09 billion during the quarter ended September 30, 2015. Its revenues grew from Rs 75.69 billion to Rs 86.89 billion during the same period. During the first half of financial year 2015-16, the com­pany generated close to Rs 50 billion in cash, which was partly used to fund the Videocon spectrum buy-out.

Idea plans to roll out its 4G services in at least 750 towns across 10 circles by the first half of 2016. As far as the 3G segment is concerned, Idea is certain that its 3G growth will not be jeopardised as it implements its 4G plans. The operator has also announced plans to expand its 3G coverage significantly, and is in the process of upgrading up to 80 per cent of its 2G sites so that they can handle 3G as well. At pres­ent, the company has 42 million subscribers with 3G-enabled smartphones, but only about 16 million of them are using 3G services.

On the investment front, the company has revised its capex for 2015-16 to Rs 20 billion. This addition is likely to support the expansion of 3G/4G sites and related services. For 2015-16, Idea Cellular has set a target of adding 30,000-35,000 3G/4G incremental sites, which will encourage mobile broadband coverage.

Reliance Communications

In November 2015, RCOM began the consolidation trend in the Indian telecom sector when it bought out Russian conglomerate Sistema JSFC’s Indian mobile telephony business, Sistema Shyam TeleServices Li­mi­­ted (SSTL). This all-stock deal was valued at around $690 million. The merged entity will have a strong standing in India, with 120 million subscribers. RCOM will be able to use SSTL’s 800-850 MHz spectrum to provide better 4G services and compete with companies like Airtel and RJIL. Another advantage will be the increa­sed validity of its spectrum licence.

Over the past year, RCOM has made dedicated efforts to strengthen its hold on the wireless business segment. Its 3G subscriber base and data traffic have grown significantly due to the data explosion in the Indian industry. It experienced a 25.2 per cent increase in the number of 3G customers, which rose from 29.7 million in September 2014 to 37.2 million in Sep­tember 2015. The company’s total data traffic grew from 65.7 billion MB to 97.3 billion MB during the same period. This was largely on account of the greater proliferation of low-cost smartphones and the increased popularity of over-the-top applications. Moreover, RCOM’s voice segment did not suffer significant losses, as was the experience of other domestic operators.

In a bid to increase its revenues from the enterprise segment, RCOM took sev­eral initiatives and entered into partnerships to expand these offerings. In July 2015, it announced the deployment of its cloud delivery network (Global Cloud Xchange) nodes in Delhi, Mumbai, Chen­nai, Bengaluru and Hyderabad. This platform offers network transparency and cloud orchestration features, and is targeted at banking and technology verticals as well as small and medium enterprises (SMEs). RCOM also entered into a partnership with internet of things (IoT) provider Jasper in August 2015 in a move to enter India’s nascent IoT industry. RCOM’s data centre facilities, combined with Jasper’s control centre platform, will allow RCOM’s enterprise users to launch, manage and monetise next-generation IoT businesses. In No­v­em­ber 2015, the company announced its plans to invest $80 million in setting up two new data centres and expanding two existing ones in the next two to three years. It is continuing to aggressively tap India’s growing cloud computing market, having stated that revenues from Global Cloud Xchange can be expected to contribute up to 25 per cent to the fixed line business in the next three years.

In a major development, RCOM reached the final phase of its deal to exit Reliance Infratel in December 2015. It signed a non-binding agreement with Till­man and TPG to sell its tower unit at an enterprise value of Rs 220 billion. Assets will be transferred from Reliance Infratel on an ongoing concern basis into a sep­arate special purpose vehicle owned by Tillman and TPG.

While RCOM continues to aggressively pursue inorganic growth, it needs to reduce its debt so that it can make further investments in next-generation networks. Its relationship with RJIL through spectrum sharing and trading will be critical for the continued provisioning of quality 4G services. Meanwhile, the operator is reportedly looking at a three-way merger with Aircel and SSTL, for which talks are at a preliminary stage.

Bharat Sanchar Nigam Limited

After several failed at­tempts at turning its fortunes around, BSNL showed strong indications during 2015 that its revival could be around the corner. The operator has been undertaking a number of initiatives to boost finances and bring its sluggish landline and wireless businesses back on track.

BSNL’s Phase VII Expansion Project to create an additional capacity of 15 million lines at an estimated cost of Rs 48.04 billion is already under way. As part of this, 14,421 2G and 10,605 3G sites will be rolled out across the country. The project will lend better coverage and cap­acity to its network, which currently covers 72 per cent of India’s population. The expansion will help fix loopholes in the 2G/3G network and also increase data capacity by 30-40 per cent.

The state-run operator is in the process of giving a facelift to its 30-year-old switching technology with next-generation network systems. In doing this, its entire network of wireline local exchanges will gradually be converted to IP-enabled ones.

BSNL’s data services business has been expanding at the rate of 65-70 per cent per annum while data traffic is growing at the rate of 70 per cent. In light of this tremendous increase, the operator is investing further in expanding its 3G network, which currently comprises 35,000-36,000 sites across India.

It is also undertaking large-scale de­-

p­loy­ment of Wi-Fi hotspots with the intention of taking their number to 40,000 over the next two or three years. It is planning a 4G strategy that involves integrating Wi-Fi hotspots with the mobile network so that they virtually act as 4G hotspots. In add­ition to deploying these services on its own, BSNL is open to revenue sharing agreements with private players.

Apart from enhancing its own network, BSNL is undertaking some large-scale government projects. Among these is the provision of mobile services to uncovered villages in Arunachal Pradesh and two districts of Assam at an estimated cost of Rs 19.75 billion; the implementation of a transmission media plan for the north-eastern region at an estimated cost of

Rs 2.95 billion; and the provision of mobile connectivity in 2,199 identified locations in areas affected by left-wing extremism at an estimated cost of Rs 35.67 billion. BSNL is already playing a key role in the BharatNet project, which will be a stepping stone towards Digital India.

Going forward, the operator is aiming to increase its revenues from Rs 280 billion in 2014-15 to Rs 420 billion by 2018-19. It also expects the contribution of the mobile segment to go up from the current Rs 130 billion to about Rs 190 billion in 2018-19, while the revenues from its landline business will likely remain flat at

Rs 110 billion. The company is optimistic about growth in its enterprise segment, which currently accounts for 10 per cent of the total revenues. BSNL expects this to reach 18-20 per cent over the next three years as an increasing number of banks turn to rural areas and more smart city projects come up. It has earmarked a capex of around Rs 70 billion for 2016, with plans of investing nearly Rs 390 billion over the next five years.

BSNL’s keenness to shed its “loss-making” tag is a positive sign. However, overcoming a decade’s growth lag with several private players to contend with will not be an easy task.


With 3G spectrum holdings in 13 circles and 4G in eight, Aircel Limited remains a key telecom operator in the industry. However, the company has suffered a downturn in recent years owing to its alleged involvement in the 2G scam and delayed returns from its 3G services, launched in 2011. The company is now moving towards recovery with its recent efforts being aimed at improving its credibility and market position.

In 2014, Aircel achieved a major milestone with the launch of 4G services in six of the eight circles for which it holds licences in the 2300 MHz band. However, the company offered these services to enterprise clients primarily via leased lines and Wi-Fi devices. The company has an edge over many operators as far as Wi-Fi is concerned as it has a network of over 50,000 Wi-Fi hotspots, which will help the company ease network congestion once 3G and 4G services gain traction.

During 2015, the company was in the process of moving its 4G enterprise users from the Wi-Max platform to the LTE-TD platform. As of September 2015, the company had completed erecting 7,400 sites of the 13,000 that were planned to be completed by December 2015. Of the 13,000 sites, around 5,400 were for 2G networks, while the remaining sites were to be dedicated for 3G and 4G networks.

The operator also adopted aggressive marketing strategies and introduced innovative bundled offerings to improve its market position.

Recently, it has launched relatively low-cost mobile data packs for 2G and 3G internet services, starting at Rs 9 per day. In another development, in October 2015, Aircel partnered with e-commerce website Snapdeal, mobile insurance provider Ingram and NexGTV to provide new services and relevant content to its customers. The partnerships were aimed at augmenting data consumption on the company’s networks.

The efforts paid off as the company’s subscriber base increased from 7.87 million as of December 2014 to 8.46 million as of October 2015.

As per estimates of the Telecom Regu­latory Authority of India , Aircel has shown a consistent rise in its gross revenue, which includes revenues from all licensed operations. The company’s gross revenue grew at 8.36 per cent from Rs 32.05 billion in the quarter ended September 2014 to Rs 34.73 billion in the quarter ended Sept­ember 2015.

Despite the steady growth in revenues, the company’s finances continue to be impacted by heavy debt. It reportedly had a debt burden of about Rs 260 billion as of December 2015. As a result of its weak financial health, the company is viewed as a potential acquisition target by large players. Aircel is likely to merge its business with that of RCOM and SSTL. Even as the entities have written to the Comp­etition Commission of India for its approval, both RCOM and Aircel are working on lowering their debt, which they have agreed to cap in the new entity at Rs 200 billion. SSTL has also agreed to settle its liabilities ahead of the merger.

Tata Teleservices Limited

Like most telecom operators, TTSL largely focused on strengthening its data service business in 2015. It has also been betting big on its enterprise business segment, so much so that it believes the non-availability of a 4G licence will not pose a threat to its growth in the segment. TTSL’s enterprise business is growing annually at the rate of 17 per cent while the industry rate is 8 per cent. The segment also accounts for 30 per cent of the company’s total revenues. TTSL is putting a significant amount of focus on SMEs and the higher adoption of the IoT platform, location-based services and M2M solutions to drive business growth.

Another segment in which TTSL has a strong foothold is the Wi-Fi hotspot business. The company began ins­talling these hotspots in mid-2013 and has been instrumental in setting them up at India’s top airports. It is also providing Wi-Fi at key public spaces, including Con­naught Place in Delhi. It recently launched its high-speed public Wi-Fi service at the Bombay Stock Exchange, and is also in talks with several government agencies for implementing Wi-Fi solutions under the government’s Smart Cities Mission.

Financially, the company is now turning towards a growth curve. It managed to narrow its net losses from Rs 19.6 billion during the first half of 2014-15 to Rs 14.2 billion in the corresponding period of 2015-16. Its operating margins improved to 19 per cent in the first half of 2015-16 from 8.9 per cent in the first half of 2014-15.

TTSL benefited from a reduction in termination charges and a cost-cutting exercise. It also scaled down its operations in loss-making circles. The operator is expected to receive Rs 28 billion from selling part of its stake in telecom tower firm Viom Networks, which will help it repay its Rs 324 billion debt. It is also expected to sort out its arbitration case with NTT DOCOMO to buy back its shares and go ahead with a merger with Telenor in the coming weeks.

Going forward, TTSL will be required to capitalise on opportunities in data as well as the enterprise mobility business to turn around its fortunes in the long term. This will not only help it prepay loans and reduce its interest burden, but also enable it to compete effectively with peers. Its current margins of 19 per cent are still very low in comparison with industry leaders Bharti Airtel, Idea Cellular and RCOM. At Rs 174, even TTSL’s ARPU is less than that of its rivals’ Rs 200.

Telewings Communications

In September 2015, Norway-based Tel­e­­nor Gro­­up ch­an­ged the name of its Indian subsidiary from Uninor to Telenor. During the quarter ended June 2015, Telenor turned profitable at the operating level for the first time since its entry into the Indian market in 2008. This can be largely attributed to the significant increase in mobile subscribers, even though the average voice usage has remain­ed almost stagnant. A major reason for the company’s continuous growth in terms of subscriber base and revenues has been its focus on being a low-price operator in the market through the Sabse Sasta and Internet for All campaigns. While the majority of service providers have been targeting high-ARPU customers, Telenor has been concentrating on a few circles with its mass market strategy.

The operator has been able to increase its subscriber base by aggressively expanding its distribution network and launching customer-relevant products and services at affordable tariffs. For instance, instead of offering monthly data packages that could be costly, Telenor has been offering hourly, daily and weekly plans. It has also been educating the masses about its services and the associated benefits. In add­ition to this, it has laun­ched a campaign, “Inter­net on Wh­ee­ls”, in the Uttar Pradesh (East) circle, hiring vans with trained personnel that travel across the circle and offer free internet to people for a day so that they become aware of its benefits.

During 2015, the operator firmed up its plans to upgrade its infrastructure with the aim of improving the efficiency of its network and making it future-ready. It selected Huawei to transform its 24,000 base transceiver stations across its oper­ational circles. Through this network transformation deal, Telenor is targeting a 30 per cent reduction in its network opex. The operator believes that the new equipment will entail lower bandwidth consumption and ensure more extensive network coverage.

Telenor is planning to launch 4G services and has stated that it could leapfrog from 2G to 4G directly, using LTE-frequency division duplexing technology. With this intention, it acquired additional spectrum in the 1800 MHz band in most of its operational circles in the February 2014 auction. With this, it increased its total spectrum holdings to 43.4 MHz as of March 2015 and ensured that it held more than 5 MHz of airwaves in each operational circle.

To augment its spectrum holding and increase its footprint, Telenor could also opt for mergers and acquisitions. In light of the cabinet’s recent approval of the spectrum trading guidelines, the company could prefer to acquire spectrum from other operators to purchasing an entire company, as most of the players have massive debt on their balance sheets. Trading will also enable the operator to buy specific-frequency airwaves to make its spectrum holdings contiguous. This will help it offer better user experience in terms of data services. Telenor is reportedly planning to enter into a spectrum trading deal with Videocon Telecom.

The operator seems well placed to achieve significant growth in the near fu­ture. Its constant focus on offering targeted services at affordable rates and optimising operations will improve profitability.

Sistema Shyam TeleServices Limited

SSTL, the Indian telecom arm of Russian conglomerate Sistema JFSC, has been part of the Indian telecom industry for the past eight years. It is now beginning to gain a foothold in the market, focusing on data to achieve growth while continuing to remain a pure-play CDMA operator. This strategy seems to have paid off as SSTL broke even at the operating level in six of its nine operational circles during the quarter ended March 2015. According to the company, this was due to the growing share of non-voice revenues and data services, with data making up 51.1 per cent of its total revenue during the quarter.

SSTL attained a positive operational income before depreciation and amortisation in the Tamil Nadu, Delhi, Kolkata, West Bengal, Rajasthan and Karnataka circles. However, it posted net losses of

Rs 4.06 billion for the quarter ended Septem­ber 2015 and Rs 4.38 billion for the corresponding quarter in 2014. Meanwhile, taking a clear stand on net neutrality, one of 2015’s main topics of debate, SSTL laun­ched its OpenWeb data plans starting at Rs 299, which allow users to equally access all websites and services on its network.

In a strategic move, the operator did not participate in the latest spectrum auction held in February 2015 as it felt that the reserve price of Rs 36.46 billion per MHz for 800 MHz spectrum was too high and did not make a strong business case. It also felt that there was no point in acquiring additional spectrum if the spectrum it won during the latest auction was not made contiguous.

The company has now turned its attention to the 2020 auction, when a lot of spectrum is expected to come up for sale. Over the next two to three years, it will carefully evaluate its strategy for making a transition towards becoming an LTE technology-based service provider. In fact, it has been reported that SSTL is in talks with RCOM and Aircel for merging their Indian telecom businesses through a stock swap. The three-way joint venture, if it comes through, will be able to offer 3G services in 18 circles, launch 4G services in the 2300 MHz band in eight circles and hold 2G spectrum in 22 circles. The next few years will be crucial for SSTL as it tries to further establish its position in the Indian telecom market.

Videocon Telecom

During 2015, Videocon Telecom decided to scale down its oper­ations in the country. In India’s first ever spectrum trading deal, the company sold 5 MHz each of spectrum in the 1800 MHz band in two of its seven operational circles, Gujarat and Uttar Pradesh (West), to Idea Cellular for

Rs 33.1 billion. Videocon is also learnt to be in talks with several operators for the sale of 10 MHz of 4G spectrum in the Uttar Pradesh (East) and Bihar circles. It, however, has stated that it has no plans to exit its telecom business in India and will continue operations in its other three operational circles – Punjab, Haryana and Madhya Pradesh.

Meanwhile, the company exhibited a strong financial performance during the quarter ended September 2015. It reported a 42 per cent decline in its net loss from Rs 813 million for the quarter ended September 2014 to Rs 470 million for the quarter ended September 2015. This was on account of a 27 per cent growth in the company’s consolidated revenues from Rs 4.88 billion to Rs 6.21 billion during the same period. With this, Videocon achieved 95 per cent of its targeted gross revenue for 2015-16 in the quarter ended September 2015. Further, the operator reported a 12 per cent growth in its minutes of usage and a 29 per cent growth in its subscriber base on a year-on-year basis.

Data continues to account for app­rox­i­­mately 12 per cent of Videocon’s gross revenue. In order to increase the uptake of its data services, it launched a double data offer in 2015, under which its customers get double the amount of data that is currently available on all standard data packs. This is applicable during night hours (12 a.m. to 7 a.m.). Videocon expects the double data initiative to increase overall customer data consumption by over 50 per cent and data revenue by around 25 per cent. It also expects data consumption per user per month to increase by up to 20 per cent. With this new offer and several other micromarketing initiatives for data services, Videocon Telecom aims to take up the share of data in its gross revenue to 15 per cent by the end of 2015-16.

The company expects to achieve revenues of Rs 30 billion by March 2016. It also intends to acquire 8 million new subscribers in the Punjab, Haryana and Madhya Pradesh circles by March 2016. Further, the operator is planning to soon launch 4G services in the Haryana and Madhya Pradesh circles through spectrum sharing with other operators. It is also seeking to expand its footprint in other geographies and has already expanded coverage in some pockets of Himachal Pradesh.

Mahanagar Telephone Nigam Limited

Mahanagar Telephone Ni­gam Limited (MTNL) has been the subject of discussion ever since it was dec­lared a sick PSU by the government in March 2015. The company’s operational performance has been poor, which has adversely affected its financial situation.

This has largely been due to stiff competition from private companies, particularly in the wireless segment. Over the past three years, MTNL has made limited investments in its network infrastructure, which has impacted its ability to provide quality services. MTNL’s poor quality of service has come up repeatedly. In Nov­em­ber 2014, the government had set a deadline of a period of six months for the company to meet the necessary benchmarks before it took action.

After a series of negotiations, in August 2015, Nokia Networks agreed to install eq­uip­­ment that would enable MTNL to ex­pand its network in Mumbai and Delhi, as well as improve the quality of various services. Under the project, MTNL decided to add 1,080 3G sites and 800 2G sites in Delhi; and 1,080 3G and 566 2G sites in Mumbai to its network. To this end, it sec­ured a loan of Rs 12 billion from IDBI Bank.

On account of these initiatives, the com­pany’s mobile subscriber base increa­s­ed from 3.45 million in December 2014 to 3.6 million in October 2015.

In the wireline segment, the subscriber base has remained more or less stagnant over the past few quarters, to stand at 3.52 million as of October 2015. MTNL, however, holds a large market share in the fixed broadband segment. As of October 2015, it had the third highest number of fixed broadband subscribers (1.13 million) after BSNL (9.94 million) and Bharti Airtel (1.61 million). In order to improve the uptake of these services and boost future revenues, the company is laying an intra-city fibre network in Mumbai and Delhi at a cost of Rs 600,000-Rs 700,000 per km of fibre.

In terms of financial performance, MTNL reportedly earned revenues of Rs 36 billion in 2014-15 and reported an operating loss of Rs 30 billion.

The company’s current strategy to recover from its bad financial situation is to reduce its expenditure in areas that are not profitable or are not contributing to im­proving revenues. Employee costs account for around 70 per cent of the expenditure undertaken by the company. MTNL has stated that close to 27,000 of its employees will retire in the next 10 years, which will ease the company’s finances. It is also gradually reducing its stake in Nepal-based telecom operator United Telecom on account of the latter’s poor performance. Such measures can help reduce expenditure; however, in the long run, MTNL will have to improve its networks and provide better quality services in order to hold its ground as an important player in the metro circles.