The illogically costly 3G auction, evidently, has strategic implications for both Bharti and Reliance Communications. B&E does a snapshot 'dummies guide' competitive analysis primer on the two by Virat Bahri
When you speak of rivalry in the Indian telecommunication space, it is hard to imagine a discussion not commencing with a reference to two names – Bharti Airtel and Reliance Communications. The former was the player that pioneered the market, and the latter is credited with being the one that changed the entire dynamics of pricing and brought the mobile connection to the common man. Ever since then, their game of one-upmanship in the market place as well as in the lobbying arena has hogged the headlines for years. And it has flared up on a number of occasions - the GSM vs CDMA debate, lobbying w.r.t. spectrum prices being provided to each other, bidding for MTN poaching of top executives, et al.
So far, the game changer in the telecom industry has been price, a tool that RCom first used in the market with success and became almost like an industry norm. After all, the first decade of this century has been one of fast-paced growth, and price is the sure route to market share gains in a market like India. Players have gained inch by inch using this ploy through a variety of schemes. But the way ARPUs have been on constant decline, this strategy is now getting limited in its impact; particularly with the entry of newer players, which are taking the price barrier down further. 3G was a game changer that the incumbents were waiting for.
After a long and tedious wait, the 3G auction has been completed and the winners announced. And RCom, Bharti and Aircel (unexpected third winner) have led the rest in terms of circles, winning 13 circles each. Clearly, the playing field in the Indian telecom space has been divided again, and it’s time for Bharti and RCom to take their rivalry to a new dimension. The question that obviously springs up is – what should their strategies be and who would take the advantage in the post-3G scenario?
When you speak of rivalry in the Indian telecommunication space, it is hard to imagine a discussion not commencing with a reference to two names – Bharti Airtel and Reliance Communications. The former was the player that pioneered the market, and the latter is credited with being the one that changed the entire dynamics of pricing and brought the mobile connection to the common man. Ever since then, their game of one-upmanship in the market place as well as in the lobbying arena has hogged the headlines for years. And it has flared up on a number of occasions - the GSM vs CDMA debate, lobbying w.r.t. spectrum prices being provided to each other, bidding for MTN poaching of top executives, et al.
So far, the game changer in the telecom industry has been price, a tool that RCom first used in the market with success and became almost like an industry norm. After all, the first decade of this century has been one of fast-paced growth, and price is the sure route to market share gains in a market like India. Players have gained inch by inch using this ploy through a variety of schemes. But the way ARPUs have been on constant decline, this strategy is now getting limited in its impact; particularly with the entry of newer players, which are taking the price barrier down further. 3G was a game changer that the incumbents were waiting for.
After a long and tedious wait, the 3G auction has been completed and the winners announced. And RCom, Bharti and Aircel (unexpected third winner) have led the rest in terms of circles, winning 13 circles each. Clearly, the playing field in the Indian telecom space has been divided again, and it’s time for Bharti and RCom to take their rivalry to a new dimension. The question that obviously springs up is – what should their strategies be and who would take the advantage in the post-3G scenario?
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
