Indian mobile communication market likely to see consolidation: Gartner

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8 Jun 2011
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NEW DELHI: Amid intense competition, Indian mobile communications market is expected to consolidate in the coming years with just about five or six players likely to remain viable, says global research group Gartner.

Noting that mobile communications market is likely to consolidate in "next three to five years or earlier", Gartner said there are many triggers for such a trend.

According to Gartner, about five to six players are likely to remain viable in the market, mainly since they have been able to survive price competition and dynamic market trends.

"Most likely, incumbents like Bharti Airtel, Reliance Communications, Vodafone Essar, Idea, Tata and BSNL will survive the consolidation wave because they have better customer experience management and stronger network coverage," Gartner said.

Apart from competition and gradual decline in subscriber additions, high cost of 3G licences as well as limited spectrum allocation has intensified the market challenges.

The report noted that small players are likely to cease operations or be acquired if they do not achieve the scale needed to be profitable in the market. "It is possible that one of the new entrants may initiate consolidation of the small players," it added.

When contacted, Gartner's Research Analyst Shaily Shah said that in the long run, consolidation is likely to level the playing field for competitors that are facing hyper-competitive environment.

"With so many mobile providers battling for share as the market moves toward saturation, the outlook for sustained profitability is poor," Shah said.
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