Vodafone, Idea to Sell Towers to ATC; Jio and Airtel to Rule the Market?

It seems Jio aggressive plans have opened the door to its rivals. The new entrant has not only captured the market but has also shaken the telecom market.

Recently, Idea Cellular India reported a dip in the profit and a consolidated net loss of Rs 1106.80 crore for the quarter ended September 30. The company blamed high competition and regulatory changes for it. We all know Idea is soon going to lose its identity and merge with Vodafone. But recently, Vodafone has also reported 10.2% dip in the net profit. So, this question arises in our mind will Vodafone be able to survive the cut-throat competition?

Will Vodafone be able to survive post- merger?

Given the broad picture, it seems the answer is no.  Recently, the subsidiary of American Tower Corporation has signed an agreement to purchase 28,000 towers owned by Vodafone India and Idea cellular. In 2015, ATC bought 51 percent stake in Viom networks, with 42,000 towers! Thus, now ATC commands over 80,000 mobile towers across India. This figure makes it the second-largest player in the business, but only half of its size of the largest one, Indus Towers, which is also going through a phase of a merger.  Of late, ATC has received a set back from two major companies Tata Teleservices and Telenor which has been sold to Bharti Airtel. So, far Bharti has not given assurance that it will continue using ATC Towers. According to the internal sources, it is confirmed that at least half of the towers will remain with them, as they plan to expand their tower capacity to take on its new rival Jio. Also, ATC has shown the interest in buying Reliance Communication, which commands 43,600 towers.

All these facts point towards the fact that ATC and Bharti Airtel  will rule the roost.

Will ATC be soon out of competition?

Given the rapidity of merger and acquisitions taking place and the launch of Jio, it is predicted that sooner or later the companies will merge with Bharti Airtel and stand against the Mukesh Ambani owned Reliance Jio. What’s more? Reliance Jio has cannibalized Anil Ambani owned telecom company Reliance Communication too. Thus, proving that we live in the dog-eat-dog world.