Relevance of alliances for mobile operators in India: an exploratory study

Abstract

With more than 14 mobile operators operational in India and many more likely to join, ARPU (average revenue per user) for operators is declining every hour, competition is getting more and more cut throat, and the quality of service becoming a serious question. Whether the present ecosystem can support so many operators, will there be any probable alliance or mergers, how the things are likely to go and what should be the winning strategy, these questions needs to be analyzed. In this project, we have tried to study such nuisances of the industry from perspective of: limited availability of spectrum s bandwidth, challenges while ensuring quality service, understanding optimal mix of the service providers to remain profitable, and others. The study attempt to address the impact of emergence of Mobile Number Portability (MNP) towards end of this year; how the equation and variables will change, how one of the biggest challenges of estimating and handling large variations in subscriber base will be tackled. The study also attempts to address the impact of introduction of 3G by private operators. How high speed data services will influence consumer preference, will there be a real leading edge with the operators equipped with 3G technology. Finally, we have studied various other factors which will play a key role in deciding the overall equation in future; like: government policies on mergers and acquisitions, spectrum allocations etc. in Telecom industry, drivers for forming strategic alliances, attributes deciding customer retention based on performance and importance of service parameters, etc. Our methodology of understanding and analyzing telecom market, in particular the mobile operators (the new entrants, Green field operators and the existing ones, Incumbent operators ); is based on following points:? Learn the market basics and trends? Understand the attributes influencing consumer decision making in selection of mobile operators? Understand the role of other players within eco system Understand possible cost / revenue sharing options, back door alliances, etc. In the end, study recommends the strategies for positioning and most viable options for alliances and mergers for telecom operators in India, on the basis of different findings in the study.