The oligopolistic power that telecom operators have in India is probably slowing innovation in the mobile space. Discount broking made trading volumes grow exponentially so if SMS were very cheap or near free we would see much more use and much more spam as well. Similarly if the rev share on VAS were to be more for content developers then we would see more content.
The operators have made huge investments and if content providers want to piggyback on their marketing spend then the operators are probably right in demanding their pound of flesh.
This problem is not going to go away unless it is smartly tackled. I have had the good fortune to participate in the break down of two oligopolies in the financial services space one in India ( 1985) and one globably (1999).
The first was Citibank breaking down the corporate cash management oligopoly of the large PSU banks and the second the breakdown of the wire transfer oligopoly of money center banks primarily by PayPal.
Over the next week or so I am going to comment on my own post with some possible approaches to break down the innovation dampening effects of the telecom oligopoly. Others are welcome to chip in.
I am not for or against any particular side. I like to see the consumer benefit, innovation and entrepreneurship flourish but that cannot happen if the infrastructure operators are not happy and have enough money to grow and maintain their networks.
Extreme positions help no one.
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