Telenor

Abstract

India's telecom sector is one of the world's largest and one of the fastest-growing. The subscribers base grew from 22.81 million in 1999 to 429.72 million in 2009'. Technological advancements paired with an enabling governmental framework transformed the market, expanded the network, and resulted in spectacular development. When the New Telecom Policy was unveiled in 1999, thirteen private mobile service providers were using 2G technology. By 2019, the number of operators has been decreased to eight due to exits and consolidation. While growth has been solid, incumbent operators have seen their profits suffer due to pricing competi gen. Smaller players were bought to save costs and increase survival, while larger providers like Vodafone and Idea amalgamated. The current market structure supports the empirical finding known as the rule of three, which states that mature markets typically support three primary rivals, with others surviving on the periphery or in a niche. Jio, Airtel, and Vodafone-Idea, the three biggest private sector providers, control around 88.4% of the market. Reliance Jio has the largest market share of 33.3 % in terms of subscribers as of April 2020. Spectrum is one of the most important inputs for mobile communications and having access to it gives carriers a competitive edge. Operational effigiency is improved by having a more contiguous spectrum. Operators efficiently distributed spectrum bands across 2G, 3G, and 4G services after spectrum liberalization in 2016. This was particularly advantageous for incumbent operators whogsarve diverse users using several generations of mobile technology. The Telecommunication Authority of Indig.(TRAI) controls the regulations of the telecom industrysin India and distribute spectrum. Consumption of voice minutes and GBs of data surged as industry prices, as measured by average revenue per user (ARPU), decreased. Data growth rats were much higher, reflecting the low starting point. Betyeen 2014 and 2019, the number of minutes of use (MoU) climbed ape CAGR of 12%, while data usage per subscriber per month increased at a CAGR of 76%. High costs of spectrum acquisition, as mentioned above, and the demands of network upgradation had increased the industry debt burden. Technological disruption and tariff competition triggered by the entry of Reliance Jio jointly aggravated the financial distress reflected in the unprecedented decline in revenue of the industry through the years 2017 and 2019. The industry's average revenue decreased from 5.49 per cent in 2012-2013 to 2.51 per cent in 2015-2016, which further declined to -2.82 per cent in 2018-2019. The industry estimates for weighted average Return on Equity (ROE) decreased from 7.46 per cent in 2015-2016 to -7.59 per cent in 2017-2018.