My new article entitled Traversing the Economic Crisis is scheduled to be published in the January 2010 issue of The Reader magazine. This article informs about the global and Indian economic recovery. I am elated that they have selected my article for the very first issue of the next calendar year. Will share with you soon!
Abhishek
Recently, we have seen a series of aggressive price cuts in almost all services by Indian telecom companies. Be it Airtel, Tata Docomo, Idea, Reliance and the like, every company has jumped into this price war to appease and retain its customers. Severe impact on respective share prices was also witnessed by investors as this cut of price may deteriorate the top line of their balance sheet in the coming future. No one knows where will it stop as Reliance, in its recent move, has cut SMS charges to 1 paisa/SMS which is believed to aggravate the situation as it will force other market competitors to act on something like this as well.
As a result, share values of major market leaders like Bharti Airtel and Reliance Communication have lost their values between almost 40%-50% respectively. It’s hard to understand that where will this competition between mobile service providers take us to, except for investors, that the sales and profits of these companies are going to be hit hard.
These moves, which I believe is a “domino effect”, will surely worsen the financial position of telecom companies but there must be some benefit that they are reducing service price though it can be just to retain existing customers in this very competitive Indian telecom market.
