During the first half ended September, 2012, there was a rise in revenue for Vodofone. The rise grew 13 percent to Rs 17,580. However, the company is yet to make a profit from India as a leading carrier after it acquired the network in 2007 from Hutchison Telecom.
The telecom market has grown very dynamic, though it is still young in India. The Indian government is still in a learning stage how to treat the industry and what kind of revenue can be made from the market. Also, in another one or two year a much more mature industry will be seen. The licence extension will play a very important role in it.
One can only get that if one is a mass producer, as the fixed costs are very high. If a good revenue is not generated then the claws of fixed cost will throttle. Finally, there will exist not more than five to six operators in very long run.
Recapitulation, the A Raja licences have not aided to the industry, but in fact destroyed value. Apart from the industry, new operators who saw tariffs as the only answer to their investment justification caused lots of shame to the government. UPA's political forte was badly hammered, and that affected the economy too.
It is tough. There is always a desperate fellow, not necessarily a new player, who can slash tariffs. We may see a consolidation and followed by rationalization of prices that will not bother the customers.
Meanwhile, after the 2G action Uninor is wrapping up its business from four circles. We reported it yesterday. Below is the story:
Uninor to wrap up 4 telecom circles - 2G spectrum auction
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