A price war has undermined India’s big telecoms companies

NARENDRA MODI often waxes poetic about “Digital India”: a country where clogged, dangerous roads are replaced by fast, ubiquitous cyber-motorways. The prime minister can be forgiven a touch of political hyperbole. In a world transformed by telecommunications technology, India has stood out. In the 1990s merely getting a fixed phone line required a deposit (and maybe a bribe), then waiting six months, or six years. Now it takes minutes. India has 1.2bn phone accounts, second only to China. Prices are among the lowest in the world. In 2001 one in 30 Indians had a phone. Now just two in 30 do not. India has more than 500m internet users, who shop online with Amazon or Flipkart (owned by Walmart), book rides with Uber and its homespun rival, Ola, and order takeaway with Zomato. Measured by users India is the biggest market for WhatsApp (400m), Facebook (300m) and YouTube (265m). At night the darkness of poorer streets is pierced by Bollywood films or cricket matches flickering on mobile screens.

Look more closely, though, and the physical foundation of this buzzing digital marketplace looks shaky. Many of the companies that built the underlying telecommunications infrastructure are in trouble: unprofitable, indebted, overtaxed and exposed to political whims. In November Vodafone Idea (in which Britain’s Vodafone Group owns a 45% stake)...



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