Why are operators moving away from pan India operations?

Operators are now choosy about circles and are now not looking at pan India operations as the focus is more on profitability.

Having operated in B & C category circles for a long time, the operators do have the baseline and therefore operators are focusing only on profitable circles leaving unprofitable circles for others.

With mobile penetration increasing in both urban and rural areas, operators are selective as there is not much demand left both in urban as well as rural areas. Even if there are some pockets of demand in rural areas, the big question is whether operators will get their return on investment for those pockets if they invest. And wherever operators feel they will not get their investment back they are leaving it for other operators.

We are also witnessing increased competition in data with the coming of Reliance Jio. Being a greenfield data operator, Reliance Jio will definitely have an edge over others with respect to data. So, Vodafone and RCOM are choosy about circles.

In the February 2014 auction, operators are also moving away from pan India operations and moving towards selective operation. As per the list of qualified bidders, Vodafone is not participating in some B and majority of C circles like Assam, Bihar, Himachal Pradesh, J&K, Madhya Pradesh, North East and Orissa. Even RCOM is participating in all service areas except circles like Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa and West Bengal.

Operators like Bharti Airtel, Aircel, Idea Cellular, Tata Teleservices (except Delhi), Reliance Jio Infocomm, Telewings are participating in all service areas.

List of Qualified Bidders
Operators         Eligible to not bid in service areas

Vodafone              Assam, Bihar, Himachal Pradesh, J&K, Madhya Pradesh, North East and Orissa
RCOM                   Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa and West Bengal
Bharti Airtel         None
Aircel                     None
Idea Cellular         None
Tata Teleservices Delhi
Reliance Jio          None
Telewings              None

Source: Department of Telecommunications

As per industry estimates, majority of data will come from metro, A and few B circles so operators are planning to look into these circles and plan to consolidate whatever they have so that they can get a better valuation in the long run.

Even in the case of data and broadband, B & C category circles are not lucrative be it Jammu & Kashmir, North East, Assam, Madhya Pradesh and others. So, policy makers need to work out a mechanism that people residing in these circles also benefit from broadband and data services so that there is inclusive development.

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