War of Worlds- The Tariff War in telecom continues- Time to Assure Business

Don’t think of the Tom Cruise starrer Hollywood flick, for this post is about the recent news of MTS slashing base calling tariff to half paisa per second, that is roughly $(1/9000) per second. Read the full article here.

Imagine the state of affairs w.r.t competition that a company (which like all other operators in the Indian sub-continent) is trying to make a living by cutting down the cost of calls in spite of itself (like all others) having to face still operational cost issues– which effectively are all on the rise.

MTS is a relatively new incumbent in the market that is dominated by the likes of Bharti Airtel, Vodafone, Idea Cellular, Reliance and Tata.

As the war for call tariff reduction as a tactic to increase the customer base continue, the operators (all of them) seem to be bleeding profusely trying to contain the costs while barely managing to make money in business.

Something tickles within me, when I see this happening and thus it seems to me that the obvious choice of survival for the telecom in this economic belt would be nothing less than ‘consolidation’. The tariff war is taking a toll on the business economics of the telecom world and I don’t see a lot of survivors in the near future.

The quintessential need of the hour before the wave of consolidation (which I so anticipate happening) sticks in and even after that would thus be ‘business assurance’– a term being now used frequently in the telecom C-level rooms. Still a flux in terms of the scope and definition, business assurance may be the answer to the methods that telecom world would use in order to :
1) contain costs across the board, while trying to increase
2) cash reserves,
3) cash flows,
4) EBIDTA
5) net-profit,
6) revenue and obviously bookings
…possibly in the above order of priority.

I guess, its just about time we see a wave of economics tsunami hitting the telecom world.

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This entry was posted in Business Assurance, Cost Management, India, MTS, Revenue management, telecom. Bookmark the permalink.

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