Are mergers the only way for India’s telecommunications market?

Idea Cellular, an Indian mobile-phone services provider, and competitor Spice Communication are underway in discussions for a merger. This will create the nation’s fifth-largest operator, local media reported.

Spice acquiring Idea and Idea acquiring Spice are both viable options that are being considered, the report said. The combined entity will have a 10.5 percent market share. The completion of the transaction might take eight to twelve months.

Telekom Malaysia, Southeast Asia's second-biggest phone company, has said it would be “open” to the possibility of merging its Indian venture Spice Communications with Idea Cellular to increase its share in India, the world's fastest-growing wireless market.

“We're open to everything,” Yusof Annuar Yaacob, chief executive officer of TM International Sdn., said. He declined to elaborate on the report.

Idea Cellular, which made India’s largest initial public offering this year, operates mobile-phone networks in 11 of the 23 circles or zones in India’s telecommunications market. Spice, in which Telekom Malaysia has a 49 percent share, operates in two circles. In light of the Vodafone-Essar deal, and such merger talks does competition from the big companies rule out new entrants in the Indian mobile phone market? Is survival only guaranteed by mergers and acquisition?