Summary
Even given its size and aggressive infrastructure sharing between operators, there are already too many players in the Indian mobile market for the long term. Also CDMA may follow the path of decline it has experienced in Latin America against the GSM juggernaut.
Analysis
Juggernaut, an irresistible force, is a word originating in India that entered into the English language based on the name for an avatar of Vishnu, Jagannath. So it is fitting that perhaps as in Latin America GSM networks will inexorably continue to gain share at the expense of CDMA, even though there is still plenty of room for the latter to grow in terms of absolute numbers of subscribers. India has a unique procedure for attributing additional spectrum to operators which depends on how many subscribers they attract and differs in its details between GSM and CDMA on the basis of the supposed higher spectral efficiency of the latter. However, this approach which has led to a significantly larger number of competitors, as compared to the 3 -4 that are the norm in most countries, entails significant techno-economic efficiencies (e.g. it is more expensive to increase capacity by adding more cell sites than by using more spectrum). Infrastructure sharing and low cost business models that make extensive use of outsourcing are two means employed to mitigate the economic consequences of these inefficiencies. Nevertheless it would be surprising if there were not significant consolidation over time among Indian mobile operators. Of course this observation may not stop additional ambitious entrants from joining the fray as new spectrum is made available, lured into the market by the potential of the country's huge population and growing economy.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
