Bengaluru: From mobile phone bills to the cost of building a home, the growing dominance of a few companies in critical sectors could eventually pinch citizens’ pockets and limit their choices. Raichur MP G Kumar Naik has flagged increasing market concentration in the telecom and cement sectors and called for periodic scrutiny by the Competition Commission of India (CCI).Concerns over increasing concentration emerged following the Centre’s response to a question raised by Naik in Parliament. The central government acknowledged that while the CCI conducted a comprehensive market study of the telecom sector in 2020-21, no comparable sector-wide study examining concentration or oligopolistic trends has been undertaken in the cement industry.Naik pointed out that both sectors have witnessed substantial consolidation over the years. India’s telecom market, which once had more than 13 mobile operators, has effectively narrowed to four major players following successive mergers and market exits. Similarly, the cement sector has witnessed increasing consolidation, with a handful of brands commanding a significant market presence across several regions.Union minister of state for corporate affairs Harsh Malhotra informed Parliament that over the past decade, the CCI examined 29 merger cases in telecom and 15 in cement, besides ordering investigations and passing enforcement orders in both sectors. The CCI’s telecom market study had concluded that the prevailing level of vertical integration was generally viewed by stakeholders as pro-competitive and posed no imminent competition concerns.Naik, however, argued that the experience of the telecom sector demonstrated how consolidation could have wider consequences for citizens and the economy. Citing the BSNL Employees’ Union, he said the market disruption following Reliance Jio’s entry contributed to the loss of more than 75,000 jobs by 2020. Telecom companies had also accumulated combined debt exceeding Rs 5 lakh crore by March 2018, adding to the stress on public sector banks.
Former Additional Chief Secretary and Raichur MP G Kumar Naik
He argued that reduced competition could translate into higher tariffs and continuing concerns over service quality for consumers, while fewer bidders could potentially affect government revenues from future spectrum auctions. The MP also cautioned that when a handful of conglomerates control multiple links in the value chain — from production and logistics to distribution and retail — MSMEs and new entrants could find it increasingly difficult to compete.Calling case-by-case intervention inadequate, Naik urged the Centre and the CCI to institutionalise periodic market studies in strategic sectors, including cement, to identify concentration risks early and safeguard consumer interests, employment and smaller enterprises.
