One India

Where no place is farther than whats' near. Information Technology Minister Dayanidhi Maran is already talking in terms of One India rate. As an investor in the telecom companies, one can ask, 'Will this affect the revenue/profitability of the telecom companies?' I don't think so. Not for the big players who provide service in major parts of India. Given a chance, we Indians talk a lot (For those who take this as offensive, we atleast talk more to prove our mettle). Because we are more emotionally attached with our kith and kin. And talking is also easy. Now-a-days, people working far away from home is most common. Given the 7-8 percent growth rate of India, this trend will only grow. And there are defense personnel for whom this will be a great boon. And there are more people moving/waiting to move into the lower middle-class group. These set of people will only increase the oppurtunities for the telecom companies helping them to generate more revenues. But what will happen to the profit margins? This is where innovation/value-added services come into picture. Innovation could either happen in operational efficiency or in bringing new content based services. Broadband services could also offset the decline in profit margins, but even that will have to get into this path of declining prices. The consumers for the value-added services could be the people moving/waiting to move into the upper middle-class group, the affluent youngsters and the affluent high networth families. The mobile devices should also become cheap to enjoy the new value-added services. And that too will become a reality considering the manufacturing plants being set up by the MNCs. In any aspect, things will only get better both for the telecom companies with nation-wide presence and for the consumers. But someone has to be affected. And they are the small telecom companies with presence in less number of telecom circles (there won't be any circles by then). What is the way out for them? Mergers & Acquisitions. Small companies that have a good cash flow and are profitable will be merged into the big companies. The other smaller companies will be bought out by the bigger players. Having said these points, it is not going to be an easy task. There will be lots of regulatory issues that have to be sorted out by the government. And there will be more confusion regarding the restructuring in telecom industry. An intelligent investor would use this confusion to spot the potential winners and invest heavily in them. Let us wait and see who are going to be the winners apart from the consumers.