Why the Indian mobile industry is in doldrums?

The cover story in the latest issue of Forbes India delves deep into implications of spectrum shortages, free market pricing and untrammelled entry of new players on the relatively nascent industry. It makes the point that any chance of industry consolidation seems to have been negated by unreasonable M&A norms.

The article finally goes on to state that that sensible regulation could still save the day and that not everyone will be able to make it through this period of uncertainty but those who do will have the proverbial pot at the end of the rainbow waiting for them.

The story also has the views of telecom majors:

Due to artificially constrained supply, the 3G auction prices were driven much higher than expected. While the government garnered huge amounts from the auctions and the sector shares substantial revenues with it, I fear that the industry's future could be in trouble because of high spectrum prices, large number of competitors and lack of incentives to consolidate," Samaresh Parida, Head of Strategy, Vodafone.

"For the first time I'm seeing TRAI regulations that are meaningless. It's almost as if a smaller player said that M&A norms should be anti large players or almost as if they are targeted at big GSM players like Bharti and Vodafone," Sridhar Pai, Founder Tonse Telecom, a Telecom Consulting Company.