With Tata’s consumer telecom business merged into Bharti Airtel, consolidation in the hugely gravitating Indian mobile telecom services sector seems near complete. Bharti-Airtel, Vodafone-Idea Cellular and Reliance Infocomm have emerged as the three top players in a market maturing very quickly.

Most other fringe players have either dissipated into thin air, winded down their businesses, or simply merged into one of these three enterprises. BSNL, subsuming the remains of MTNL, will be the only state-run player in the sector, which still has the widest reach across 29 states, especially the rural, semi-urban and low cost customers. Bets would be very high on Bharti Airtel and Vodafone-Idea Cellular vying for the number one position in the telecom sector that’s leveraged, where revenues per consumer is shrinking and where competition has intensified. From Reliance Infocomm’s point of view, the latest merger makes Bharti Airtel that much sturdier and tough to take on.

For the venerable 150-year-old Tata Group still piloted by Rata Tata, giving away its consumer telecom business on a platter to Bharti Airtel is the most graceful way to exit a loss-making venture notwithstanding a dedicated customer base of 40-odd million and 5,000-strong employee strength. In the process, Tatas have tested the mettle of N Chandrasekharan as leader of the group that has taken promoters and veterans along. Insiders contend that the deal with Bharti Airtel was in the making for long. Though Cyrus Mistry as Tata group chairman initiated the deal, it was only under Chandra that it was consummated. The takeaways for the Tata Group are many, even though most reports suggest only gains for Bharti Airtel. There was no reason for Tatas to continue in a business where it accumulated losses worth Rs 30,311 crore, even though institutional analysts put this figure much higher at Rs 40,000 crore. The latest deal also paves the way for Tatas to settle banks and financial institutions’ debt worth Rs 24,725.5 crore. They have also put an end to the annual drain of Rs 4,617 crore on the balance sheet that would only increase over the years.

Consumers will continue to make merry while the three big trans-India conglomerates slug it out for dominance in the market. The fight for revenues would be on data and value-add services, especially on 4G and 5G front where Reliance Infocomm has a definitive edge. The biggest challenge, however, would be for telecom regulator Trai to ensure that the big three do not cartelise and disrupt the development and expansion of the Indian telecom market. That won't happen for the incumbents and the challenger will always be at odds.