Companies that recently launched operations have made no dent in terms of market share. Such companies as Loop, Videocon, Stel, HFCL and Sistema Shyam have a market share of less than one per cent. Ten-month-old Uninor has garnered 1.05 per cent share, while Etisalat has the lowest share of 0.005 per cent.
“If they have to quickly increase their market share, newer companies will have to practically go free, which is not possible. Companies will struggle more if they have to compete with Idea, Airtel and Vodafone,” said Vaibhav Agarwal, vice-president, research, Angel Broking.
While new companies are struggling, losses are mounting. In the second quarter, Sistema Shyam posted a net loss of Rs 493 crore, which is more than three times its last year loss of Rs 106 crore. Also, Uninor reported a net loss of Rs 850 crore. These companies are yet to achieve breakeven, which is years away.
Losses-push-new-telcos-towards-bailout
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