HomeNewsVodafone-Idea merger announced- Will customers benefit?

Vodafone-Idea merger announced- Will customers benefit?

Even as the general media, and the industry itself seems to be unanimous in welcoming the merger as a much needed 'consolidation' in the sector, we believe the merger will not herald better times for mobile customers in India, unless the regulator steps up to do its job better

As news of the formalisation of the Vodafone-Idea merger comes in, it is probably a good time to consider if this is really a good move for customers too. For, let’s face it, Idea Cellular’s future as a standalone entity was increasingly in doubt, unless supported with huge capital support from its parent group. Ditto Vodafone India. Making a compelling case for the two to merge, to build on economies of scale and draw on a combined pool of their common stakeholders now. The broader media and financial community will, of course, love it, as it heralds a weighty new firm in the form of the new entity listed in India, reduces immediate uncertainty around the immediate future, besides the investment banking fees and much more that the merger will throw up.

As customers, keep in mind that the reality is this when the dust settles around all the hype. Worldwide, reduction of any industry category to 2-3 players, as this seems likely to do, has almost always led to ossification or lack of innovation. And with merger talks around BSNL-MTNL also gathering steam, we are consciously downplaying the fact that innovation and those two firms are a misnomer unless driven by a political mandate.

With three giant firms in the playfield, (Jio, Airtel, and Vodafone-Idea), small, disruptive ideas will find it much more difficult to see the light of day, ignored as they will be on the excel projections of ROI and ‘scale’. There is a good reason why operators worldwide never came up with the Whatsapp, Youtube’s and Snapchat’s of the world. Even the forays we have seen made by operators in areas, ranging from wallets to music apps and more have turned out to be half-hearted efforts, easily bested by Standalone players whose survival depended on the success or acceptance of these apps by users PayTM, Saavn, BookMyShow is just a few that come to mind. Even going forward, it seems a safe bet to make the case that new innovations from operators will either come as partner proposals between operators and other players or will be the usual confusing and mostly senseless tweaks around pricing and more.

On top of the drop in innovation, consumers should gear up to an ecosystem where sooner than later, the old bugbears around net neutrality, charging a gatekeeping fee for select services and more will crop up, either in the guise of ‘rightful’ share as carriers of data, or simply as the next solution to the financial woes of the industry. Areas like customer service, instead of becoming a differentiating factor will, in all probability converge to a basic minimum acceptance level, broadly common across all carriers.

In the new era of ‘big is beautiful’, which we increasingly find ourselves pushed to, despite the many initiatives around encouraging StartUps, its a clear sign that in the coming future, consumers will increasingly have to hope that regulators step up and do their job, which is not just to preserve the industries they have been set up to regulate, but to take care of the consumers in that industry.

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