Telecom Companies Gain From Customer Appreciation & Foreign Fund Infusions

The Telecom Segment in India is evidently heading towards prosperity owing to Customer Appreciation and Foreign Fund infusions.

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Select Telecom companies, who command a healthy market share, have been making some reassuring progress in the second half of this year. This boost hasn’t gone unnoticed by foreign companies and Foreign Direct Investment (FDI) has been pouring in, in the last couple of months. Collectively, Indian Telecom Segment has seen a foreign fund infusion to the tune of Rs. 17,000 Crores (US$ 2.8 Billion). Though this appears to be one of the best years so far for this segment, these companies should brace for a tough competition, shared Alok Shende, Principal Analyst and Co-Founder of Ascentius Consulting,

The time is right for telecom companies to make investments if they have to stay ahead. Telecom companies have to be prepared because the No 1 and 2 places are severely contested by other challengers.

The reference to the ‘Competition’ bit has been taken quite seriously by the companies, but interestingly the approach has dramatically altered. What was once a tussle to boost customer count has turned into an inward approach, wherein companies are improving themselves and in turn, their networks, to ensure customers stay happy and utilize their network more. From boosting 3G Speeds to introducing Streaming Services, telcos have been showing signs of self-development, that is hoped will entice consumers to not just stick to the company longer, but help in boosting Average Revenue Per User (ARPU).

The Foreign Funds are pouring in: Bharti Airtel sold merely 5% stake in its company to Doha-based Qatar Foundation Endowment for a substantial figure of Rs 7,080 Crores (US$ 1.18 Billion). Idea Cellular recently conducted roadshows for its qualified institutional placement this year and not just  successfully managed to raise as much as Rs 3,750 Crores (US$ 606 Million), but its existing partner, Malaysian telecom company Axiata, reaffirmed that it will continue investing in the company to keep up its stake. While these are third-party investments, British telecom major Vodafone, the parent company of Vodafone India, invested Rs. 10,141 Crores (US$ 1.6 Billion) by buying out its Indian partners.

With funds flowing in, telecom companies can fulfill theirs as well as their customers’ expectations of having a pan-India seamless coverage with reliable high-speed mobile broadband. What do you think?

 

Image Source | The Guardian

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