In what would become the largest deal in Indian telecom space, Vodafone has confirmed it is in talks to merge its Indian telecom operation with rival telecom operator Idea Cellular. It is expected to be an all-share deal, that would create a new telecom leader in Indian telecom space.
“Vodafone confirms that it is in discussions with the Aditya Birla Group about an all-share merger of Vodafone India, excluding Vodafone’s 42 percent stake in Indus Towers and Idea,” Vodafone’s parent company said in a statement. “Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in deconsolidation of Vodafone India assets.”
According to the latest telecom subscription data from TRAI, Vodafone India has got a market share of 18.72 percent or around 200 million subscriber base. On the other hand, India’s third largest telecom operator Idea Cellular owns around 185 million subscribers having a market share of Rs 17.17 percent. This two operators if merged would become the largest telecom operator in India with a combined subscriber base of around 385 million. That’s 100 million more than the closest rival Bharti Airtel who has a subscriber base of 262 million subscribers.
If the merger goes through, the new entity will be more prepared to taken on the challenge created by the new telecom operator Reliance Jio. Jio has shaken up the Indian telecom market with its free unlimited voice and data offers that has been extended to more than six months now.