Airtel’s Sunil Mittal Pitches for Consolidation Now, Cartelization Next?

Bharti Airtel chief Sunil Mittal, whose firm milched subscribers for over two decades with huge roaming charges, has finally bowed to Reliance Jio’s onslaught saying he is declaring war on roaming.

"I am declaring a war on roaming," he told the World Mobile Congress in Barcelona. "I can promise you that during my term at GMSA, roaming charges and bill shocks will be a thing of the past. I promise you that," he said.

Mittal, who is also the chairman of the GSMA, the mobile industry trade body, said large countries should have maximum three service providers while smaller nations must have two carriers, and the remark comes in the backdrop of his buy out of Norwegian company Telenor’s India unit.

“Governments have got it wrong for too long. Regulators have always felt giving out new licences means more money for the government and more competition for the customers. It’s quite the contrary,” said Mr Mittal in his keynote address at the Mobile World Congress, giving an insight into what his next move is.

The Airtel Chairman said, “In Africa, again and again when I meet regulators and ministers, they talk about issuing new licences. The time for a licence and 500,000 base stations creating a value is over. You can give as many licences as you want but please allow consolidation.”

He said in India, Indian government has brought down the number to five operators now, from 12 a few years ago. “Probably it will be down to 4, let’s see where it ends up,” he said. Telecom Secretary J S Deepak had seconded the consolidation move in India saying “enough competition but not fragmentation of spectrum”.

In a typical contempt for competition, he said: “In countries like India, you are looking at low single digit return on capital employed. You might as well put the money in the bank and get a decent return and go out and play golf rather than spend this 400 billion a year on hard capital expenditure that you do.”

So, what happens next? Once consolidation is allowed directly or indirectly by the regulators and the government, cartelization is forced on gullible consumers and obviously those who stayed firm in the industry will have a last laugh, not the consumer.

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