Market leader Airtel on Wednesday said that though the merger between Vodafone and Idea Cellular is good for the overall industry, it must not be forced on the operators due to unfair market conditions.
“It is important to ensure that such consolidations are not an outcome of a forced situation created by offering an ‘unfair playing filed’ to any particular company while completely destroying the viability of the others,” said Gopal Vittal, MD and CEO, Bharti Airtel (India and South Asia).
While Vittal did not name any operator, his obvious reference was to Reliance Jio, which is offering free services to customers till March. Both Airtel and Idea have complained to regulators against RJio’s tariff plans, terming it as predatory and anti-competitive.
Gopal said a few solid and profitable players are always better for an industry, as they can make substantial investments and offer quality products and services to customers in a sustainable fashion. But he added that unfair market practices by an operator “would be an unfavourable situation, which is not only bad for the sector, customers and employees, but will also adversely impact the overall investment climate, and above all revenues to the government.” Airtel’s third quarter profit was down nearly 50 per cent owing to the RJio effect.
Allan C Nichols, CFA, Equity Analyst at Morningstar said: “We think this merger also demonstrates the difficulty RJio’s entrance has caused for the Indian wireless telecom market. RJio has been giving its voice service away for free, as well as some free data, which has attracted millions of subscribers. Many of its actions are questionably legal, but Reliance is extremely well connected politically, and so far, the government has been afraid to step in.”