India’s overcrowded mobile market looks likely to consolidate further, with reports state-owned BSNL is holding merger talks with the country’s smallest operator MTNL, another state-owned company with operations only in Delhi and Mumbai.
According to a source with the Department of Telecommunications, a merger between the two loss-making companies is being discussed, with a number of options being considered, The Economic Times (ET) reported.
BSNL, with 97 million mobile connections, holds a near 9 per cent market share making it the country’s fifth largest mobile operator, according to GSMA Intelligence. MTNL, which focuses on fixed-line operations, holds less than a 1 per cent mobile market share.
The merger discussions are the latest in a series of recent talks among the country’s top operators as they face increasing competition, particularly after the entry of 4G upstart Reliance Jio in September. The newcomer already signed up more than 100 million subscribers with its generous free voice and data offers.
India’s number two and three mobile operators by subscribers – Vodafone India and Idea Cellular – are expected to finalise a merger soon, which would create the country’s largest player with a 37 per cent market share. Telenor announced an agreement in late February to sell its Indian operations to market leader Bharti Airtel, and number seven Reliance Communications (RCom) entered into negotiations with Tata Teleservices.
If all the deals being discussed move ahead and are approved by the government, the market would be cut from the current 11 to just five mobile players.
BSNL reported a loss of INR48.9 billion ($733 million) in the April-December period last year, while MTNL’s loss increased to INR8.2 billion in Q4 on revenue of INR6.9 billion, ET said.