In what could be considered a landmark year for the Indian telecom sector, op­erators embarked on a major consolidation drive triggered by the aggressive entry of Reliance Jio Infocomm Limited (RJIL). At the end of the year, the number of players had shrunk to less than half. Against 14 players at one time, only six re­mained: Bharti Airtel, Vodafone-Idea (wh­i­­ch are in the process of merging), RJIL, Bharat San­­char Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL) and Aircel. Of these, the real co­m­­­petition is only amongst the first th­ree, which cater to over 80 per cent of the total subscribers. Both BSNL and MTNL have been witnessing a decline in market share while Aircel is likely to shut up shop sooner or later.

Among the most notable deals since RJIL started commercial services in Sep­tember 2016 is the ongoing merger bet­­ween two of the country’s largest service providers, Vodafone India and Idea Cellular, which is set to end Bharti Airtel’s more than two decade long reign as India’s number one player. As a counter strategy, Bharti Airtel has acquired weaker operators such as Videocon, Telenor and Tata Teleservices Limited (TTSL) in a bid to significantly enhance its revenue and spectrum market share. In all three cases, the sellers were running out of options and Bharti Airtel managed to undertake the acquisition at attractive valuations.

The latest consolidation move has been made by RJIL itself, with the company ag­ree­ing to buy the majority of Reliance Communications’ (RCOM) wireless assets. The deal appears to be a win-win for both companies as RJIL will get more firepower in its telecom business while the Anil Ambani-promoted firm will be able to reduce its debt overhang substantially.

However, the financial health of the industry deteriorated considerably in 2017. Bharti Airtel recorded a decline of as much as 39 per cent in consolidated net profits during the quarter ended Dec­­em­ber 2017 as it strived to match Jio’s offers.

Meanwhile, Idea Cellular posted losses for four straight quarters. Vodafone India too reported a decline on all key financial parameters­ including revenues, earnings be­fore interest, taxes, depreciation and amortisation (EBITDA) and EBITDA margins. In fact, it has reduced its capex guidance for 2018-19 as well.

For RJIL, meanwhile, the consolidation in the sector has worked in its favour. As its latest numbers show, this has helped it gain market share at the expense of weaker players. RJIL today has 14 per cent subscriber market share.

A review of the performance of the key telecom operators and related developments during 2017…

Bharti Airtel

It was a difficult yet interesting year for Bharti Airtel. The operator managed to hold its ground amidst competitive pressures from Jio’s disruptive strategies. However, its efforts to revive its top line bore little fruit. The operator’s net profit declined by 39 per cent from Rs 5.04 billion in the quarter ended December 2016 to Rs 3.06 billion in the corresponding quarter in 2017. Further, its consolidated revenue declined by about 13 per cent from Rs 233.36 billion to Rs 203.19 billion during the same period.

The year saw Bharti Airtel going on a massive acquisition spree to strengthen its telecom and mobile broadband portfolio. It took over Telenor India’s business ­opera­tions, Tikona Digital Networks’ 4G ­busi­ness and TTSL’s consumer business. Un­der the agreement with Telenor, Airtel took over its operations including its assets and customers in seven telecom circles. ­Mean­­while, the acquisition of Tikona Digital Networks’ 4G business gave Airtel access to its broadband wireless access spectrum and 350 telecom tower sites in five telecom ­circles. Further, Airtel took over TTSL’s operations across the country in 19 telecom circles. It also offloaded a portion of its stake in Bharti Infratel Limited. These mer­gers, acquisitions and stake sales are ex­pected to help the operator consolidate its market position and pare its debt.

On the operations side, Airtel ­conti­nued to expand its 3G/4G network in 2017. It deployed dual-carrier technology in the Delhi-NCR, Rajasthan, Bihar and ­Jhar­kh­and­, Andhra Pradesh and Telangana ­circles under its ongoing network ­transformation programme, Project Leap, to deliver enhanced speeds to its 3G ­customers. Fur­ther, Airtel launched 4G ­services in four major cities of Assam (Guwahati, Dibrugar, Jorhat and Tinsukia), and 22 towns across the Kashmir Valley and the Dras, Kargil and Leh regions in Ladakh. In May 2017, the operator announced its plans to invest $2.5 billion in the country during 2017-18, the majority of which was earmarked to ­augment its 4G capacity. Moreover, the operator upgraded its 4G network in the Maharashtra and Goa circle, and launched 4G services using the 1800 MHz band, thereby offering 4G ­services on dual ­spectrum bands.

The year also marked the operator’s foray into the voice over long term evolution (VoLTE) space, with it launching the service in Mumbai in September 2017. It later expanded these services to cover the Madhya Pradesh, Chhattisgarh, Gujarat, Karnataka, Andhra Pradesh, Telangana, and Maharashtra and Goa circles. In a bid to counter RJIL’s 4G feature phone strategy, Airtel launched the “Mera Pehla Smartphone” initiative, and entered into a number of partnerships with device manufacturers such as Karbonn, Celkon, Intex, Samsung and Itel to bring affordable, bundled 4G smartphones to the market. In the fixed broadband space, Airtel expanded the reach of its V-Fibre technology in Benga­­lu­­ru, Hyderabad, Bhopal and Indore to pro­­­­vi­de broadband speeds of up to 100 Mbps.

Airtel also laid the groundwork for the launch of 5G services. To this end, it dep­loyed the massive multiple-input ­multiple-output technology in Bengaluru and Kolkata. Further, it partnered with Nokia to create a strategic roadmap for ­techno­logy deployment. Through the ­partnership, Airtel aims to leverage Nokia’s end-to-end 5G solution. Later, Airtel ­partnered with Ericsson to develop a ­strategic roadmap for 5G deployment. Under the partnership, Ericsson will help Airtel upgrade its ­network to the 5G ­technology standard. Eric­sson will also ­provide its 5G-related technological ­solutions to help the operator identify use cases around the new ­technology. Airtel also entered into a strategic alli­an­ce with ­Korea-based ­operator SK Telecom to evolve ­standards for 5G.

Meanwhile, the operator kept an eye on non-core growth areas for driving future revenue streams. For instance, in a bid to enhance its digital services and content off­er­­ings, the company launched an Android-based set-top box in March 2017. The set-top box can convert a TV into a smart TV and will come bundled with TV channels and inbuilt content-based applications such as Netflix and YouTube. Un­der its digital in­­­no­­vation programme, Project Next, Air­­tel launched several new initiatives in­cluding the redesigning of its 2,500 retail stores and its Postpaid Promise plan. The operator announced plans to invest Rs 20 billion in the project over the next three years.

The year also witnessed the commercial launch of Airtel Payments Bank, the only functional telecom operator-led payments bank in the country so far. The bank offers an attractive interest rate of 7.25 per cent on savings deposits. However, about two-thirds of the bank’s customers are Airtel’s telecom subscribers. The bank has announ­­ced a strategic partnership with Hindustan Petroleum Corporation Limited (HPCL), wherein 14,000 HPCL fuel stations will act as banking points for users. The move will enable Airtel Payments Bank customers to access a range of banking services at these fuel stations.

Despite its many initiatives, Airtel may find the going rough. With a likely change in the telecom pecking order, its pole position in the market could well be threatened once the Vodafone-Idea merger comes through. Bharti Airtel plans to make significant investments in augmenting its network infrastructure, primarily under its ongoing Project Leap programme. Besides, it is working proactively for the launch of 5G networks in order to be future ready.


Vodafone India

Brand Vodafone was laun­ched in India in September 2007, after Vodafone Group Plc acquired a majority sta­ke in Hutchison Essar. Ten years later, in 2017, it decided to partially exit its India operations by entering into a merger agreement with Idea Cellular.

As per the merger deal, the second largest telecom operator by subscriber ­market share will initially hold 50 per cent stake in the merged entity, which will eventually come down to 45.1 per cent, while the Aditya Birla Group, Idea Cellular’s ­parent company, will hold 26 per cent stake. Another notable development was the operator’s decision to sell its stand-alone tower business in India along with Idea Cellular to American Tower Corporation Telecom Infrastructure Private Limited for an aggregate enterprise value of $1.2 ­billion. The transaction is expected to be completed during the first half of 2018, subject to regulatory approvals.

While the group is implementing its broader business strategy for the Indian market, Vodafone India is focusing on ­ex­­panding its 4G coverage to keep pace with its competitors. During the year, the ­operator launched its 4G services in select towns and cities across the Uttar Pradesh (West), Haryana, Tamil Nadu, Punjab, Uttara­khand, Chennai, Maharashtra and Goa, and Assam and Northeast circles. On the network build-out front, Vodafone awarded a 4G deployment and expansion contract worth Rs 36.5 billion to Nokia in January 2017. The contract covered 10 telecom circles – Kolkata, Mumbai, Guja­rat, Tamil Nadu/Chennai, Haryana, Uttar Pradesh (East), West Bengal, Punjab, Himachal Pradesh and Jammu & Kashmir. Later, the operator awarded a $300 million 4G dep­loyment contract to Ericsson covering the Uttar Pradesh (West), Rajasthan, Odi­sha, Northeast and Assam telecom circles. The operator also added over 5,400 tower sites in the Karnataka circle.

Vodafone became the first operator in India to offer 4G roaming services in 40 countries with the help of its 4G partner networks. The operator also forayed into the affordable 4G smartphone space by partnering with Micromax to launch the Bharat 2 Ultra 4G smartphone. Vodafone later extended this partnership to roll out cashback offers on the entire range of Micromax’s entry-level 4G smartphones in a bid to acquire new customers.

As a result of these initiatives, Voda­fone’s­ active data customer base reached 68 million in September 2017 with 14.1 million 4G users. Moreover, the operator’s data usage increased by 2.47 times from 110,430 TB in the quarter ended ­Septem­ber 2016 to 383,841 TB in the corresponding quarter in 2017.

Innovation in branding and marketing has always been a key differentiator for Vodafone. To this end, the operator ­­laun­ch­ed­ a new brand positioning, keeping in mind the changing technology landscape comprising digital technologies like big data, internet of things (IoT), cloud, ­augmented reality, robotics and artificial intelligence. The operator’s IoT segment re­corded a 150 per cent year-on-year grow­th although the base remains small.

The operator also increased its ­colla­boration with the government to extend ­services in rural areas. Following the ­government’s decision to allow operators to ­leverage bandwidth for providing last-mile connectivity under Phase II of the BharatNet project, Vodafone came forward to provide internet facilities in 2,000 villages. The operator paid Rs 1.1 million as advance fee to the Department of Tele­commu­nications (DoT) for leveraging bandwidth. Further, Vodafone Business Services, the company’s enterprise arm, collaborated with the Rajasthan government for the latter’s ­integrated RajNet project. Under the ­partnership, Vodafone has digitally ­connected 33 districts in Rajasthan.

Going forward, the launch of 4G VoLTE services would remain central to the operator’s growth strategy. It has recently announced plans to launch VoLTE services in Mumbai, Gujarat, Delhi, Karna­taka and Kolkata under the first phase of roll-out and plans to subsequently extend coverage across the country. It has also signed an MoU with the West Bengal government to invest Rs 30 billion in capacity augmentation and new business initiatives over the next three years. However, the most-awaited development is the completion of the Vodafone-Idea merger, expectedly in April 2018.

Net, net, having invested billions of dollars in the Indian market over the years, Vodafone now seems far less bullish about its India plans. Post its merger with Idea Cellular, the UK-based telecom company will gradually reduce its stake in the merged entity from 50 per cent to possibly as low as 26 per cent, a clear sign of its lower confidence in the Indian telecom market. Further, Vodafone is also looking at a partial or full disposal of its stake in Indus Towers, which is not included in the ongoing merger deal with Idea.

In November 2017, the company redu­­ced its capex guidance for 2017-18 by 13 per cent to Rs 29.15 billion. It will be interesting to see how the merged company co­pes with the competition from Bharti Airtel and RJIL, which are making significant investments in building their networks.


Idea Cellular

The year 2017 was a significant one for Idea Cellular. In a key move, it decided to merge its operations with Vodafone India to create a telecom giant well-suited to face the stiff competition prevailing in the sector. Further, in line with the industry trend, the data uptake on its networks grew by leaps and bounds, increasing from 297,920 million MB during 2016 to 436,422 million MB during 2017. This was mainly driven by the operator’s aggressive expansion in wireless broadband infrastructure. Accor­ding to the operator, its broadband sites multiplied three times over the past two years and the total number of broadband sites stood at 143,565 as of December 2017.

During the year, Idea expanded its 4G coverage across the Karnataka, Uttar Pra­desh (East), Uttar Pradesh (West), Guja­rat, West Bengal, Jammu & Kashmir, Bihar and Jharkhand, Assam, Rajasthan and Mumbai circles. It achieved a major milestone when it became the only network in Maharashtra and Goa to deploy two carriers on the 1800 MHz frequency division duplex (FDD) band for offering 4G services, making it the largest live 4G FDD network in the circle.

The year saw Idea betting big on digital content to strengthen its 4G portfolio. It launched digital content applications like Idea Music, Idea Movies and Live TV, and Idea Games under its “Digital Idea” initiative. Further, it partnered with Zee Digital Convergence’s live television platform dittoTV to launch its flagship entertainment application, “Idea Movie Club”. The operator also took steps to revamp its mobile money application Idea Money and set up a USSD-based platform for con­­­ducting digital transactions.

Idea entered into partnerships with Nokia and ZTE to strengthen its network infrastructure. While a contract for dep­loy­ing optical transport network solutions with Nokia will help in addressing its bandwidth needs, the deal with ZTE will upgrade Idea’s existing network from a 10G system to a 10G and 100G hybrid trans­port system to ensure large-capacity long-haul service transport capability.

That said, the year was quite a ­challen­ging one on the financial front. During October-December 2017, the operator posted losses for the fifth ­consecutive ­quar­ter. The sharp cut in ­interconnection char­ges eroded its ­revenue ­during the ­quarter, resulting in a net loss of Rs 12.84 billion. With this, the operator’s cumulative loss for the ­first-nine months of 2017-18 stood at over Rs 30 billion ­compared to Rs 780 million a year ago. The operator’s ­revenues de­clined by around 25 per cent, from Rs 86.62 billion during the quarter ended Dec­­­­­em­ber 2016 to Rs 65.09 billion during the corresponding quarter in 2017. Mean­while, the EBITDA declined by 44.2 per cent from Rs 21.91 billion to Rs 12.23 billi­on during the period under ­conside­ra­tion.

After a turbulent year, Idea can look forward to some financial stability, once its merger with Vodafone India comes through. Besides, the Aditya Birla Group recently announced its plans to infuse up to Rs 32.5 billion into the telecom company by issuing preferential equity to a host of promoter group companies. Operationally, it will be a busy year for Idea. The ­company intends to launch VoLTE services by March 2018. It also plans to launch ­payments bank services during the year.


Reliance Jio Infocomm Limited

The past year brou­ght several moments to cheer for new entrant RJIL as its disruptive strategies finally started to yield some of the expected benefits. The operator recorded its first net profit during the quarter ended December 2017, in less than 18 months of commercial launch. On a stand-alone basis, it posted a net profit of Rs 5.04 billion during the quarter ended December 2017, as compared to a net loss of Rs 2.71 billion during the quarter under September 2017. Meanwhile, the operator’s revenue from operations stood at Rs 68.79 billion in the quarter ended Decem­ber 2017, a growth of 11.9 per cent over the previous quarter. Further, its ARPU stood at Rs 154 during the same period, which is the highest in the industry.

As of December 31, 2017, RJIL had a subscriber base of 160.1 million, making it the fourth largest telecom operator in the country within a year of its commercial launch.

RJIL took the price war to the handset space as well, launching its own brand of a 4G feature phone, JioPhone, in July 2017.  The device could be purchased by depositing a sum of Rs 1,500 that is refundable on returning the phone to the company after three years, effectively making it a free purchase. The launch took the handset market by storm and received an overwhelming response in the pre-booking phase, which led to delays in order deliveries. By October 2017, RJIL had shipped 6 million JioPhones. The company resumed JioPhone bookings in December 2017 by opening bookings to about 10 million people who had earlier expressed interest in buying the phone.

In November 2017, the operator an­n­oun­ced its plans to build a large Wi-Fi network comprising 1.5 million Wi-Fi hotspots across the country over the next 18 months. It has already rolled out over 90,000 such hotspots and is adding about 2,000 new hotspots per week. Following in the footsteps of its arch-rivals, the operator announced its plans to launch Jio Payments Bank, a 70:30 joint venture bet­ween RJIL and the State Bank of India.

In the 4G space, RJIL partnered with Samsung for its Infill and Growth project. Under the project, Samsung will help RJIL to extend its services in rural areas and ensure seamless indoor and outdoor coverage in dense urban areas, thereby covering 90 per cent of the population. Further, the two companies would work to bring 5G technology in India. RJIL also partnered with Ace Technologies, Cisco, Ericsson, Nokia and Ciena during the year to either expand its existing capacity or deploy technologies that would enable its network to handle the massive data grow­th. In addition to partnerships with equipment vendors, RJIL signed contracts with telecom operators across the world to enhance its global presence. For instance, the operator collaborated with telecom operators from Europe, the Middle East and Asia to launch the Asia-Africa-Europe submarine cable system. Under the partnership, RJIL will be responsible for network operations and management of the cable system in Mumbai.

The year 2018 looks as promising for RJIL as the year gone by. The company’s acquisition of RCOM’s assets comprising wireless spectrum, towers, fibre assets and media convergence nodes, reportedly worth over Rs 250 billion, is expected to contribute significantly to its wireless, fibre and enterprise businesses. Further, it plans to launch its high speed fibre-to-the-home broadband services in more than 30 cities by early 2018. The operator is also expected to soon roll out its enterprise services commercially. The industry will closely watch RJIL’s next steps, even as Vodafone and Idea merge and Airtel regains stability.



During 2017, BSNL made concerted efforts to turn around its financial and operational performance in a bid to strengthen its position in the market. Notably, the PSU has been able to retain subscribers even as the industry’s competitive landscape evolved significantly. In fact, in August 2017, BSNL registered higher net subs­criber additions as compared to Bharti Airtel, Vodafone India and Idea Cellular.

During 2017, BSNL undertook a number of initiatives across the consumer mobility, broadband, enterprise, infrastructure, 5G and IoT segments, and entered into various collaborations. It partnered with Aeris to offer IoT solutions to its en­ter­­prise customers. BSNL currently caters to around 20,000 business customers including some large PSUs and is looking to enhance its enterprise offerings significantly. The operator expects its enterprise business to account for almost a third of its total revenues in 2017-18. Further, BSNL collaborated with ZTE and Nokia separately to bring 5G technology to India. It also signed an MoU with Coriant to develop use cases for 5G and IoT technologies in India. In addition, the company has introduced cheaper data plans to attract new customers to its network.

The operator is also exploring the mobile virtual network operator business to efficiently utilise its underutilised network in rural and semi-urban regions. Mean­while, it has partnered with Inmarsat to offer satellite phone services, with commercial launch expected in 2018. The company is now participating in several tenders for the government’s Smart Cities Mission. It also partnered with several state governments to help them achieve their Digital India targets. For example, it partnered with the Kerala government to install 2,266 Wi-Fi hotspots across the state to provide free internet services in public places.

In August 2017, BSNL made its debut in the digital payments space with the laun­­­ch of its mobile wallet. The wallet, which has been developed by MobiKwik, can be used by BSNL subscribers to make online transactions. According to BSNL, the wallet has 1.5 million merchants on its network.

On the operations front, BSNL is focusing on upgrading its networks from 3G to 4G to be at par with other operators. It expects to launch its 4G services in early 2018. Initially, the company was planning to use its Wi-Fi hotspots to provide 4G services, but has now decided to use appropriate spectrum for the same. According to a detailed project report cleared by BSNL’s board of directors in December 2017, the operator sought spectrum in the 2100 MHz band for all circles, except Rajasthan, where the operator has planned to rely on spectrum in the 800 MHz band for service provisioning. To stay ahead in the 4G race, BSNL has partnered with Micromax to launch a 4G VoLTE-enabled feature phone. The pho­ne runs on a version of Android and has Micromax’s browser. Affordably priced at Rs 2,200, the phone comes bundled with BSNL’s lucrative mobile plan, which offers unlimited voice calls and data.

A growing area of concern, however, is the deteriorating performance of BSNL’s wireline business. In July 2017, approximately 160,000 landline users surrendered their connections. Further, in August 2017, a total of 60,000 wired broadband connections were disconnected. Consumers are rapidly abandoning wireline services, which are proving to be expensive in comparison to wireless services. Such loss of landline customers has led to a revenue decline for the company with an average wireline revenue of about Rs 800 per month as against about Rs 150 earned from mobile customers. Recently, BSNL signed an MoU with China-based FibreHome to jointly undertake the local manufacturing of telecom equipment and optical fibre cable. The company aims to export this telecom equipment to the Asia-Pacific region.

BSNL is currently looking to monetise its pan-Indian infrastructure asset portfolio to reduce costs and supplement earnings. BSNL owns about 15 per cent of the country’s telecom towers and generated Rs 15 billion in revenues in 2016-17 by sharing these assets. The operator aims to double this figure by the end of 2017-18. Further, the union cabinet’s approval to BSNL in September 2017 for creating an independent company to manage its telecom towers business will make operations more efficient. BSNL is also actively working to monetise its other non-core assets such as around 15,000 land parcels spread across various cities.

Going forward, data will remain the mainstay of BSNL’s business growth. The operator has big plans for 4G to take on the competition and is going strong on its Wi-Fi initiatives as well. BSNL is planning to install 100,000 Wi-Fi hotspots by March 2019, 25,000 of which will be installed in rural areas. BSNL will invest Rs 18 billion in the installation of the first 70,000 hot­spots while 5,000 hotspots will be ins­talled on a revenue sharing basis for which the operator will provide only bandwidth. The remaining 25,000 hotspots will be entirely sponsored by the Universal Service Obliga­tion Fund at a cost of Rs 9 billion.


Reliance Communications

Weighed down by an insurmountable debt of about Rs 450 billion and rising creditor concerns over their investments,  RCOM caved in and decided to exit its consumer mobility segment in December 2017.

Ironically, to begin with, the year had looked promising for RCOM with a proposed merger with Aircel and a tower business deal with Canada-based Brook­field Asset Management in the offing, aimed at paring its debt and improving its financial standing. Those hopes were soon dashed however, as the merger had to be called off and Brookfield subsequently bailed out of the tower deal too. In fact, it would not be wrong to say that during the course of the year, every attempt by RCOM to reduce its debt (including opting for a strategic debt restructuring) and get its house in order ran into obstacles and came to naught.

RCOM began shutting down its 2G mobile business in November 2017, a penultimate move before its complete exit from the mobility segment. The company’s sudden decision to pull the plug on this business caused major inconvenience to its customers. Approximately 40 million 2G customers of its total 81 million subscribers (as of October 2017) were forced to either upgrade to its 3G/4G network or port out to another operator. Ultimately, RCOM brought down the curtains on its entire consumer mobility business when it decided to part with its entire wireless spectrum, towers, fibre assets and media convergence nodes and sell them to RJIL in December 2017. As per the agreement, RCOM will sell 122.4 MHz of 4G spectrum in the 800 MHz, 900 MHz, 1800 MHz and 2100 MHz bands, over 43,000 towers, 178,000 route km of fibre with a pan-Indian footprint, and 248 media convergence nodes, covering 5 million square feet of space used for hosting telecom infrastructure. RCOM’s liability of deferred spectrum payments to DoT will now be transferred to RJIL. The deal consideration comprises a cash payment of around Rs 250 billion. RCOM plans to utilise these proceeds for prepayment of its debt.

Meanwhile, the company sold off its direct-to-home business to Pantel Tech­no­­logies and Veecon Media and Televi­­sion Limited, and its real estate assets in Delhi and Chennai to Brookfield Asset Management.

Having disconnected itself from its loss-making ventures, the company is already witnessing an improvement in its financials. Its loss declined by about 75 per cent from Rs 5.31 billion during the quarter ended December 2016 to Rs 1.3 billion during the corresponding quarter in 2017.

The operator now plans to focus purely on the enterprise segment. It wants to re-establish itself in the enterprise space and is betting big on its IoT business unit, Unlimit, as well as on its enterprise arm, Global Cloud Xchange. With the enterprise segment set to boom in a big way, it will be interesting to see what the future holds for RCOM.



Although Aircel’s future looked bright in the beginning of 2017 given its impending merger with RCOM, which could have helped the operator sustain competition and reduce its debt, the year ended with the merger falling through. RCOM and Aircel had signed binding agreements in September 2016 to merge their wireless operations. Under the proposed merger, Rs 150 billion of Aircel’s total debt (Rs 200 billion) was to be transferred to the merged entity and the rest was to be undertaken by Maxis Communica­­ti­ons Berhad. However, the merger faced significant opposition from RCOM’s operational and financial lenders including the China Development Bank, Standard Char­tered Bank and HSBC initially, and later by Indus Towers, Eric­s­son, Bharti Infratel and Chennai Network Infrastruc­ture, asking the operator to clear their dues before proceeding with the merger. Finally, in October 2017, RCOM called off the merger citing inordinate delays caused by legal and regulatory uncertainties, policy directives impacting bank financing for telecom and changing industry dynamics.

After the deal was called off, Aircel deliberated the possibility of taking the independent debt restructuring route, but later decided to shut shop in six loss-making circles to boost its operating profit. Consequently, it surrendered 2G spectrum  in the Uttar Pradesh (West), Haryana, Gu­ja­rat, Madhya Pradesh, Maharashtra and Himachal Pradesh circles. As for other circles, the operator continued its efforts to diversify its offerings and maintain its subscriber base. It launched a variety of attractive prepaid and post-paid voice and data packs in Karnataka, Kolkata and Assam. Further, it partnered with NDTV to launch an interactive voice response and SMS-based service, Hyperlocal News–My City My News. The service provides local and national news in English, Hindi, Bengali, Assamese, Bhojpuri and Tamil to Aircel’s subscribers. The operator also recently collaborated with Avast to offer antivirus protection to its subscribers. Under the partnership, over 80 million of Aircel’s subscribers will have access to Avast Mobile Security and Avast Cleanup as part of the Aircel Protect offering. In the enterprise space, Aircel partnered with Route Mobile to launch an SMS centre to provide clear visibility into message delivery, faster delivery of messages and im­proved latency to enterprises.

Going forward, Aircel will have to devise­ innovative strategies in order to ­redu­ce­ its debt level and survive in a ­hypercompetitive industry. At a time when all major operators are ramping up their data networks by launching 4G and VoLTE services, Aircel will have a lot of catching up to do in 2018.



State-run telecom operator MTNL continued to face financial setbacks during 2017. MTNL reported a net loss of Rs 7.31 billion for the quarter ended Sep­tember 2017, as against a net loss of Rs 7.68 billion during the corresponding ­quarter in 2016. The operator’s total in­come declined by 9.17 per cent from Rs 8.71 ­billion during the quarter ended September 2016 to Rs 7.92 billion during the ­corresponding quarter in 2017. Fur­th­er, the company’s operating income declined by 10.82 per cent from Rs 7.2 billion to Rs 6.42 billion during the same period. Meanwhile, its cellular revenue declined by 26.35 per cent from Rs 1.28 billion to Rs 0.94 billion.

The company has been incurring ­losses for the past five fiscals. Its preca­rious financial situation is an outcome of huge spectrum-related payouts, increasing ­burden of employee remuneration and declining ARPUs. Moreover, the fact that MTNL’s operations are only limited to the Mumbai and Delhi circles, two of the most saturated and competitive telecom service areas in the country, does not help its cause. Therefore, MTNL’s attractive voice and data plans for customers did little to revive its receding subscriber base amidst stiff competition from private players. As of November 2017, MTNL’s user base stood at 3.59 million as per Telecom Regulatory Authority of India data, a dip of 0.82 per cent from November 2016. Further, issues such as low quality of fixed line services and poor network security have driven away customers from its ­networks. In July 2017, MTNL’s network suffered a serious malware attack, involving the reconfiguration of its Wi-Fi modems, which led to a massive service disruption.

Despite these challenges, the operator continued to make efforts to turn around its financial position and explored new avenues for revenue generation. In June 2017, MTNL made a proposal to the DoT to monetise its real estate properties in Delhi and Mumbai. The company could raise around Rs 40 billion from selling its land bank and leasing out its buildings. It has approximately 2.5 million square feet of commercial land and 4 million square feet of residential property, apart from office spaces in the commercial hubs of South Mumbai, and Karol Bagh and Chanakya­puri in Delhi. Recently, in December 2017, the operator drew up a transformation plan that is expected to entail an expenditure of Rs 42.4 billion. Of this, Rs 21 billion will be spent on improving its mobile business and Rs 21.4 billion on revamping its wireline network. The revival plan is currently with DoT for its consideration.

On the operational side, MTNL is planning to launch 4G services and expand its 3G user base. To this end, it will install 2,000 3G base transceiver ­stations (BTSs) and 1,000 4G BTSs each in Delhi and Mumbai. MTNL is also ­planning to revive its broadband business by providing ­fibre-to-the-home services. The operator is ­looking to convert nearly 50 per cent of its fixed line users into broadband subscribers. In November 2017, the operator secured a con­­­tract from Larsen & Toubro for the design­­, development, implementation and maintenance of a CCTV surveillance ­sys­tem in Mumbai. The company has ­com­pleted the first two phases of the total four ­phases. It is also planning to mo­­­dernise its billing and IT infrastructure.