Pricing revival imperative for telecom sector health in long run, says Kumar Mangalam Birla

Competitive pressure and heavy investment requirements have “significantly worsened” the financial woes for the Indian telecom sector, and pricing revival is imperative for the industry’s long-term health, according to Vodafone Idea Chairman Kumar Mangalam Birla. Birla pointed out that while operating challenges for the industry remain, sectoral consolidation has resulted in creation of three private and one public sector operator and these players will “benefit from the long term sector opportunities”.

“The Indian telecom operators continue to operate in tough market conditions as competitive pressures forced operators to offer pricing plans, which are the cheapest in the world,” Birla said in his note to shareholders in the company’s annual report for 2018-19. He noted that the competitive pressure was compounded by the massive investment requirements for expansion of broadband coverage and capacity.