Within Indian Telecommunications Companies, no single telco has a clear and significant competitive edge. On like-for-like comparison of metrics such as scale, distribution, financial strength, regulatory hedge, etc, Airtel arguably fares better – looking both over the past five years and into the next five years. This also takes into account the ability to capitalise on the changing revenue mix going forward – from voice to data.
Otherwise, there are pockets of operational and network strength for each telco, such as Idea Cellular’s impeccable execution in recent years. Even Reliance Communications can never be underestimated given its extensive OFC & CDMA networks, but it has not been able to capitalise on this consistently.
Another difficulty for telcos in this competitive strengths analysis is the ability to deal with regulation, especially in light of limited and expensive spectrum. Indian telcos fare poorly on a regional / global basis, but within India, Airtel looks marginally better given its scale, in our view. It also has more spectrum in the 900MHz, 2100MHz and 2300MHz bands.
Indian telephony still has plenty of growth potential ahead – be that on voice (~70% penetration) or data (<10% penetration), but there will likely be 4-5 viable players chasing this simultaneously.