There will be a shift in the competitive landscape in the telecom industry: Crisil

MUMBAI: Research firm Crisil on Monday said that the 3G services industry subscriber-base was likely to touch the 100-million mark by the end of the fifth year of operations.

The firm also said that it expected an investment of around Rs. 2.60-lakh crore over the next five-years.

“We expect the 3G services industry subscriber base will touch the 100-million mark by the end of the fifth year of operations. Besides, we are also expecting an investment of Rs. 2.60-lakh crore over the next five-years of which 50 per cent would take place by 2010-12,” Crisil Research's Director Nagarajan Narasimhan told reporters here.

Moreover, 3G operators would add to their portfolio of high revenue generating services, enjoying an average revenue per user (ARPU) premium of around 25 per cent over 2G services, he said.

The research firm also believes that with the launch of 3G services, there would be a shift in the competitive landscape in the telecom industry.

“Given that no single player has acquired pan-India 3G spectrum, we believe that the process of industry consolidation would be hastened. In addition, there will be significant pressure on profitability and the need to gain scale could induce players without 3G spectrum and new entrants to actively look to merge,” Mr. Narasimhan said.

“The shift will provide a significant margin advantage to players providing 3G services. Along with other factors, it would also facilitate a round of consolidation in the industry, eventually bringing down the number of players in the sector from 12 to 7-8,” he said. — PTI