Bharti Airtel buys Telenor before Idea-Voda merger, is this the Jio effect?

Ever since Reliance Jio has entered the telecom space, the industry went through a total make over- there were tariff battles, infighting, and of course consolidation.

It was expected that the industry will see consolidation and now with major players taking in the smaller ones, the telecom industry is mainly a playground for three plus one major players, Airtel, Reliance Jio, Idea+Voda, and BSNL.

The additional spectrum that Airtel will acquire from Telenor will help Airtel to increase its 4G presence across the country. Telenor’s exit from India will leave Bharti Airtel with 1800MHz in some of the most critical telecom circles including Bihar, UP West, and UP east. However the completion of the deal will take 6-9 months as it will have to go through regulatory clearances but it is likely to come through before Idea-Voda merger due the complexities of the Idea-Voda merger.

It is also expected that with Idea-Voda merger, Airtel will lose its number one position in the industry and buying Telenor will not change that as the Idea-Voda merged entity stands to become India’s largest telecom company with revenues of over Rs. 80,000 crore.

Although, all the consolidation is happening after the entry of Mukesh Ambani led Reliance Jio but it is certainly not the reason for the consolidation, or at least the only reason, it was expected that the telecom industry will see consolidation and emergence of bigger players.

With the entry of Jio and the consolidations, the telecom industry of India is expected to have smooth functioning in some time when the dust settles down.

Here’s what Airtel’s deal is all about