At a time when price wars have taken a bite out of the quality of services provided by the telecom sector; the cash starved government is sniffing about for a new player in the cellular jungle. China Mobiles entry in the local market has further squeezed Average Revenue Per User. As telcos scuffle to maintain market share amid slowing growth, one wonders what a new player acquiring the license previously used by Instaphone, can accomplish. There are rumors of new players eyeing for a share in the market of over hundred million subscribers - predominantly engaged in dirt cheap voice services - to milk largely untapped lucrative data market. But existing players will probably not be happy to share the pie with new entrants. The license is in offing at a base price of $155 million for eight years and government won let this money go off hand. Its an interesting game - no single existing player will be spending that amount alone to buy a redundant license. There can be a case of all companies or a sub-group pooling in for the license on sale to deter new entrants sneaking in. One of the telco giant hinted this option to BR research. The question is, will government allow that, and at what price. Assuming that the government is only interested in the money, it would eagerly push for new entrants. Government would naturally seek as much money as it can extract. So the stage is set for bidding by new players and co-bidding by the existing stakeholders. The interests of telco operators are primarily in the data market as voice seemingly is a mature market now. The game becomes complex by adding three new 3G licenses which are likely to be auctioned in the range of $300-400 dollars each. Mind you, telco market is prone for mergers and acquisition ever since the entrance of the fifth player. There were all sort of rumors about Mobilink buying Warid, then about a possible merger between Telenor and Ufone and then the rumor mills churned for Mobilink to merge with Telenor based on their parental linkages. But nothing materialized and government is making them think again by putting the dormant license up for grabs again. With data driving tomorrows market; companies acquiring 3G licenses are natural leaders in coming years. With three companies providing sound data transfer services including live TV and streaming video at affordable rates. Who on this earth with little sense of internet browsing, having facebook or twitter account would keep on subscribing to an operator on existing 2.5G? PTCL promises to provide 10 MB speed to at least five million broadband users by 2016. Think of the increase in the awareness and access of using internet in this country, and nothing can be a better platform than a cell phone to connect beyond voice calls and SMS. There may be six players for time being in market, but not for long unless market offers more 3G licenses. That is unlikely as Frequency Allocation Board have just enough space to accommodate three players in the spectrum.
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