Vodafone India in talks with Idea Cellular for a Merger
Vodafone has confirmed that it is in discussions over a merger deal that could create India’s largest telecom operator. In a statement to the London Stock Exchange, the telecom giant said it is in talks with Aditya Birla Group, the group that owns Idea Cellular, over a deal. Idea shares had surged 26.2 per cent to Rs 98.15 on the BSE in mid-day trade.
Vodafone Group was responding to the recent media speculation regarding a potential combination of Vodafone India and Idea Cellular. The statement didn’t divulge whether the two companies were in exclusive negotiations or the time period of the negotiations.
The combined subscriber count of the merged entity would be nearly 390 Million, substantially higher than Airtel’s 270 Millione and Jio’s present number of 72 Million.
Kumar Mangalam Birla-led Idea Cellular, in a clarification to the stock exchanges, said, “As part of the exercise, the company has been in preliminary discussions with Vodafone. In view of the fact that the discussions are at preliminary stage, the company is not in a position to share any further details.” The statement added that it was important to mention that the fundamental premise of the preliminary discussion was based upon equal rights between Aditya Birla Group and Vodafone in the combined entity.
India’s top telecos have been put under pressure by challenger Reliance Jio and its aggressive 4G strategy. The upstart, which is funded by India’s richest man Mukesh Ambani, introduced a series of low-cost offerings last November that will price data as little as 50 INR ($0.75) per gigabyte and $2.22 per month.
However, all customers can use the service for free until the end of March, a move that prompted a rush in sign-ups. Already, just four months later, Reliance Jio has reached 72 million subscribers with around 600,000 said to be joining each day.