Following media conjecture about possible merger of Idea Cellular with Vodafone Plc, as the growing competition from Reliance Jio, Vodafone has confirmed the possible merger deal talks with Idea Cellular.
In a statement released on Monday, Vodafone stated it is in discussions for an all-share merger with Idea Cellular, excluding Vodafone’s 42 per cent stake in Indus Towers. Any merger would be effective through the issue of new shares in Idea to Vodafone. If the merger happens, it would result in Vodafone “deconsolidating” Vodafone India, implying that a new entity could unfold from the big merger.
India’s $26 billion telecom market is ripe for consolidation for smaller players since the bold entry of Reliance Jio last year, many smaller players finding it hard to compete with Jio and Airtel. And hence resulting in tariff wars.After the merger, Aditya Birla Group company Idea Cellular could score itself the No.1 position in Indian telecommunication, beating Airtel and making it more difficult for Reliance Jio to compete.
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