Impact of competition on market share in telecom market in India

Competition has intensified with the entry of new cellular players in circles. Reduced tariff has hurt all the operators. Further, well-established players with high capital investments, a nationwide network, license fee and continuously evolving technology are some barriers to entry for the weaker players in telecom market. However, small players can reap the benefit of telecom infrastructure and network through merging. Merging entities would be able to acquire a large consumer base and can hence enjoy high operating profit margin. The paper suggests that government should continue to follow the policy to permit mergers but at the same time, retain enough competition in the market so that the interests of consumers could be taken care of. The TRAI recommendations should be followed to maintain the balance between the interests of consumers and service providers.