What is Harder than Being an Indian Mobile Operator?

It might be easier to thread a camel through the eye of a needle than to succeed wildly and easily in the Indian mobile communications market. It would not be unusual in any big market for four providers to control 95 percent share of the mobile services market.

In India, though four providers have about 70 percent share, five providers have 86 percent share, while six providers have 93 percent share. Structurally, the Indian mobile market is more fragmented than most.

For reasons I do not claim to understand, mobile operator infrastructure costs some 30 percent more than global averages, says Rajan Mathews, Cellular Operators Association of India director general.

That is not all. Spectrum prices range from 30 percent to 35 percent higher than global averages as well.

And Indian mobile operators labor with less spectrum. “Every mobile operator in India has, on average, 12 MHz to 15 MHz of spectrum,” said Mathews. “Globally, every operator has 45 MHz to 50 MHz.”

There other important observation is that the Indian government has an interest in the mobile business that arguably is more concentrated than regulators elsewhere might have.

In developed markets, there are five access networks, including landline, satellite, cable TV, government networks and mobile. “India has one network: the mobile network,” says Mathews.

There are other implications. “The government has a proprietary interest, so spectrum is going to be licensed,” says Mathews. “The network is a sovereign national imperative as we are the only network in town.”
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