Dozen plus players in 2G, but 2 players in 5G?

It is difficult to believe that once upon a time there were so many telecom companies in India. Every circle had 3-4 strong players and nationally there were more than a dozen. But now a Duopoly in the 5G Era appears inevitable.

While the Bombay Telephone company was founded way back in 1882, Mahanagar Telephone Nigam Limited (MTNL) was constituted in 1986 particularly to cater to the needs of Delhi and Bombay. For the rest of India, Bharat Sanchar Nigam Limited (BSNL) was formed in 2000. BSNL took over MTNL and at best is struggling. No-one thinks it is a serious player in implementing a future 5G grid all across India.

Aircel was formed in 1999 in the Tamil Nadu circle but later expanded to multiple states. Aircel went bankrupt and tried for mergers with both Airtel and Reliance Communications. Aircel was famous for being sponsors of the IPL team Chennai Super Kings.

S Tel was formed with the help of Bahrain Communications in 2008, but it fell under the cloud of the 2G scam (that virtually sank the Manmohan Singh government) and in 2012, the Supreme Court cancelled its license. Etisalat (Emirates Telecommunication Group Company) formed in 2010, met exactly the same fate as S Tel.

Vodafone Idea: An idea that kept evolving

What exactly is Vodafone Idea? This probably has the most complicated and long story around. Hong Kong's Hutchison Whampoa and India's Max Group combined to form Hutchison Max Telecom Ltd (HMTL) in 1992.

Do you remember the famous Hutch pug dog? It was one of the most successful ad campaigns of its time. When the Essar Group got involved, this became Hutchison Essar and that got taken over by Vodafone to become Vodafone India.

Birla company Idea Cellular was formed in 1995. It had tie-ups with the Tatas and AT&T. It bought a stake in Spice Telecom after which it merged with Vodafone India to become Vodafone Idea. Spice Telecom itself had a varied history and Malaysian company Axiata had a stake in it. As you can see, multiple global telecom companies have been involved in some form or another.

Microland was a high-profile digital company formed in 1989. It is still around but nowhere near the hype of when it first came. Telstra is the largest wireless carrier in Australia currently. The two joined hands but that entity was merged into Axiata Spice Communications. Another company which merged into Idea was Escotel (1996-2004).

Airtel: Last Man standing

That way Airtel is a miracle company. It was formed way back in 1995 and celebrated its Silver Jubilee in style. It could be called the only telecom company that was near the beginning and is left standing at the end. Sunil Mittal was the son of former Rajya Sabha MP Sat Paul Mittal and has been one of the consistent telecom moguls.

The high profile BPL Mobile Communications was formed in 1994 with help from Khaitan Holdings. It changed its name to Loop Mobile in 2009 and was acquired by Airtel in 2014. Founder Rajeev Chandrasekhar is today a central minister for IT & skill development.

Videocon Telecom was formed in 2008 and sold out to Airtel. Telenor India (Norweigian parent company) also merged with Airtel. The Tatas had a tie-up with the Japanese NTT Docomo, but Tata Docomo too fell in Aitel’s kitty.

Billionaire maverick Richard Branson came to India in the form of Virgin Mobile India, but it along with T24 Mobile also ended up in the Airtel family. Indian telecom is one long tale of launches, stakes, tie-ups, mergers and shutdowns.

Jio the late entrant

Reliance Communications started in 2004 but became a victim of the battle between the Brothers Ambani (Mukesh and Anil). It had acquired the Russian origin Mobile TeleSystems India (MTS India). Of course that’s history.

It is difficult to believe that the free data revolution that Jio Mobile offered was as late as 2016. At that time there were certain packs in India that offered 10GB a month for Rs 1,000. So when Jio offered 1GB a day for free or 30GB a month for free, it broke the telecom industry. Voice became irrelevant; it was all about data.

Jio became the undisputed market leader, so much for having the first mover advantage. All the companies launched in the 1990s and 2000s bit the dust save Airtel and the 2010s saw the king of them all emerge. While Airtel had shown signs of reclaiming its No. 1 status some time back, it's the Jio story once again.

Two and two half-men

MTNL was formed in 1986. So after these 35 odd years, we are left with two players (Jio and Airtel) and two half-players (Vodafone Idea and BSNL). Someone suggested that Vodafone Idea and BSNL should merge and indeed KM Birla offered his 27% stake to the government. Theoretically it’s a great idea and the only way we could have three players in the 5G age. But it's a legal and technical nightmare.

Once we enter the 5G age, we will live in a duopoly: Jio and Airtel. There will be no other telecom operator left standing. One wonders if that is the reason that the government is not coming out with the 5G auctions. Because that could spell the death of both BSNL and Vodafone Idea.

Both Ambani and Mittal have clearly said that they are ready to implement 5G in the country, but the central government has shown absolutely no interest. It’s better to have 2 players in 5G and 2 other players in 4G than the current telecom mess which is getting worse by the day.