India’s telcos are pushing back against the huge pressure on profitability amid falling revenue and cutting costs by changing vendor contracts, relooking at energy and managed services costs, sharing active and passive infrastructure, industry officials and experts said. Among other options, mobile phone operators are pushing for increased digitisation besides keep a tight control on staff strength that can help them control inflation of balance sheets. Increasing tariffs is not an option for most operators because the market is very competitive. The way out is to cut costs for example, on staff, equipment rentals and through infrastructure sharing. The issue is different for incumbents and for new entrants – the cost to serve is low for new entrants but higher cost will be incurred for acquisition. Incumbents, on the other hand, have a higher cost to serve because of legacy investments, infrastructure and hence measures to cut costs are different. For new entrants – the game is to future proof investments in technology, IT and social media and to ensure costs do not balloon with time. Incumbents are working with partners, processes and technology to reduce the cost to serve.

(Economic Times)