Mumbai, Feb. 15 (PTI): Global research and advisory firm Gartner Inc expects the Indian mobile telecom sector to witness a second round of consolidation in 2004, resulting in elimination of smaller operators and emergence of top three players.

“Fierce competition, fall in average revenue per user (ARPU) and an increase in teledensity will result in smaller players being taken over by major ones,” said Foong King Yew, Gartner principal analyst for mobile and wireless (Asia-Pacific).

With affordability and rise of value-added services, smaller players would find it difficult to survive, resulting in mergers and acquisitions in the Indian mobile industry, he said.

Bharti Tele-Ventures, IDEA Cellular and Hutchinson Max are expected to emerge as the major acquirers in 2004, even as Bharat Sanchar Nigam (BSNL) is expected to play a dominant role in the industry, he said.

He, however, ruled out a possible acquisition and diversification of state-owned BSNL.

The consolidation phase in the country has begun with IDEA Cellular’s acquisition of Escotel in January, Yew said.

Earlier, Hong Kong-based Hutchinson Whampoa, through Hutchinson Telecommunications, had acquired major stakes in Sterling Cellular (December 1999), Usha Martin Telekom (mid-2000) and Fascel (September 2000).

Bharti had acquired JT Telecom in December 1999, which was later renamed as Bharti Mobile. The telecom major had also acquired SkyCell Communications in August 2000, which was renamed as Bharti Mobinet.

Yew said the operators would also concentrate on cost-efficiency and proficiency, providing a nation-wide reach and offering value-added services among others during the year, even as cellular tariffs would embark on a south-bound journey.

Consequent to the consolidation, the country would witness emergence of top three players in the sector, who among themselves would own more than 90 per cent of the total connections, he said.