Why I should be worried about disrupting Telecom Business in India and that too in the middle(?) of its worst ever crisis? Many of us reading this post mayn’t agree to this. Reason being- it’s too risky to disrupt existing zombie state. Or is it other way round? Have we reached a dead end?
I don’t need stats to say that. As I have been traveling across two metros & meeting few industry stalwarts, no one is actually happy with the current state of telecom. An industry outsider may blow happy bigul on optimism of subscriber growth, but people running the show might not only be skeptical about current state, but are more doubtful over future of their own beloved companies.
One price disruption was seen in year 2009, when DoCoMo first hit the mobile tariffs with rock bottom prices. In fact, in one of my earlier post, I sounded alarms over such strategy also. How long can price war be sustained when you are betting more on lowering prices? This started the negative downward spiral & entire industry was turned upside down. Gone were the meaty revenue & cash profit days!
2G Spectrum scam was the nasty blow to industry which was already in dire state. The debate is still raging on, but little can be said about outcome. Who will be punished? And will they be in position to bring industry back on track? Will the money laundered be available to fuel financial growth of industry? Can we have more money to roll out more 3G Towers? Can we instill more trust & faith in growth of industry?
But the worst hit was ‘Telecom Common Man’, who has no place to go. The other day, I was sitting in leading OEM office & came to know that some of the 400+ vendors, who used to do BTS I&C (Read: Base Trans-receiver Stations orCellTowers) etc work (network outsourcing chain) have already closed down their offices. Some others will likely to follow suite in near future. Who should be punished for killing spirits of these SMB entrepreneurs?
Bankers are debating their decisions to invest in telecom firms. VCs are shying away from new startups in telecom. Investors are scared of ‘more to come’ phenomenon. Some firms are still betting on price war, but it won’t take them too far to realize the dire situation. Tariff reversal might not solve all problems.
It’s really sad to see that despite such a successful spectrum auction & getting almost 3-4 times more revenue from auctions, GoI is unwilling to take stiff actions to bring industry back on track. Policy makers are busy these days in saving their skins & regret the earlier decisions. But who is taking responsibility of current state?
Are we going through our worst phase or the worst is yet to come? I think another positive disruption is in making. This ‘Dip’ might pave way to put end to excess competition in the market & those who would survive this ‘Dip’ would drive the future of telecom in India. The joy ride in telecoms is already over & what remains now is the cut-throat battle to survive & thrive!