Reliance Jio forces the Indian mobile market to restructure. A regular column on the information industries
| DOI | https://doi.org/10.1108/DPRG-07-2017-0043 |
| Date | 08 January 2018 |
| Published date | 08 January 2018 |
| Pages | 99-102 |
| Author | Peter Curwen |
| Subject Matter | Information & knowledge management,Information management & governance,Information policy |
Rearview
Reliance Jio forces the Indian mobile market
to restructure
A regular column on the information industries
Peter Curwen
Peter Curwen is Professor at
Newcastle Business School,
Northumbria University, Newcastle
upon Tyne, UK.
There is a saying in London that
your expected bus will often fail to
turn up on time only for two or more
to turn up together. So it is with
mergers and takeovers involving
mobile operators in India. After a
decade during which many plans to
bring together more than ten
operators failed to come to fruition –
a process described in detail in
Curwen and Whalley (2017) – the
market structure has been turned on
its head within the space of one
year. The trigger was the attempt in
2016 by new entrant Reliance Jio to
lock up the long-term evolution (LTE,
more commonly known as 4G)
market, in its infancy at the time, by
in effect providing a free service.
A list of mobile operators in
existence at the commencement of
2017 can be found in Table I.Atthe
end of January 2017, Telenor
announced that it was in
discussions – which did not imply
that a previously mooted sale to
Bharti Airtel was off the table – with
RCom and Aircel with a view to a
three-way merger. These
discussions were, however, placed
in temporary abeyance pending the
Supreme Court decision to impose a
temporary halt on the sale or
transfer of Aircel’s spectrum
holdings.
On 23 February, Bharti Airtel
announced that it had agreed to
take over Telenor’s spectrum,
licences, infrastructure and
operations – as ever, this was
confusingly referred to as a merger
when it could more realistically be
deemed to be a takeover – subject
to regulatory approvals which were
expected to take until the latter part
of 2017. In May, the requisite
authorisations were forthcoming
from the Securities and Exchange
Board (SEB), the Bombay Stock
Exchange and the National Stock
Exchange of India, but the number
of agencies involved in matters of
restructuring in India also includes
those with responsibility for matters
to do with competition and foreign
investment (see below) which is why
it is such a long-winded process.
At the same time, Tata DoCoMo
revealed that it had initiated
discussions with a view to joining
the proposed Aircel/RCom/SSTL
merger. However, Tata DoCoMo’s
debt of $4.46bn was expected to
prove something of an impediment
in addition to the need to unwind
NTT DoCoMo’s stake in Tata
DoCoMo. It was also noted that the
Tata Group board had previously
resolved to shut down its telecom
business on a gradual basis; so, it
Received 26 July 2017
Revised 26 July 2017
Accepted 11 October 2017
DOI 10.1108/DPRG-07-2017-0043 VOL. 20 NO. 1 2018, pp. 99-102, © Emerald Publishing Limited, ISSN 2398-5038 DIGITAL POLICY, REGULATION AND GOVERNANCE PAGE 99
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