India’s three leading mobile operators, Bharti Airtel, Vodafone, and Idea, have all been hammered by the arrival of Jio Infocomm. With the mind-blowing offers announced by Mukesh Ambani, the existing operators come up with their latest offers.
Jio has made an immediate impact with the launch of free calls and cut-price data, forcing the three biggest operators – Bharti Airtel, Vodafone, and Idea – to slash prices and accept lower profits. Now, a big threat looms on Airtel & Jio as Vodafone confirms talks on the merger with Idea.
Vodafone Merger With Idea Cellular:
British telecom giant Vodafone Group Plc confirmed today that it was in discussions for a possible merger of its Indian subsidiary with rival telecom company Idea Cellular, whose shares spiked nearly 30 percent. Idea shares had surged 26.2 per cent to Rs 98.15 on the BSE in mid-day trade.
Vodafone, the world’s second-largest cellphone networks operator, has endured a tumultuous ride since it entered India in 2007. Vodafone said any merger would involve Idea issuing new shares to Vodafone and would result in Vodafone consolidating Vodafone India.
In a statement, Vodafone said it “confirms that it is in discussions with the Aditya Birla Group about an all-share merger of Vodafone India (excluding Vodafone’s 42 per cent stake in Indus Towers) and Idea. Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone do consolidating Vodafone India.”
“Such a merger will help Vodafone India improve its position in the mass market, while Idea Cellular would gain from Vodafone’s strength in the metro circles. Finally, the merger would create a new leader in the mobile/data industry, challenging both Bharti Airtel and Reliance Jio and further intensify the competition,” CLSA said in the report.