TTSL-Vodafone Merger Talks in Advanced Level

By March 4th, 2014 AT 1:19 PM

There has been strong market rumour that might be true. It’s regarding Vodafone India and Tata Docomo merger. After Airtel’s acquisition of Loop Mobile (Mumbai) it could be the biggest M&A in Indian telecom.

vodafone tata docomo dealTata Teleservices is jointly owned by Tata Group and Japanese telecom major NTT Docomo. NTT Docomo owns 26.5% in Tata Teleservices and around 11.7% in Tata Teleservices (Maharastra). NTT Docomo wants to leave the market as the company’s profit sheet is not promising.

With the merger Vodafone would be the country’s largest mobile operator in terms of subscriber base, pushing down Bharti Airtel.

Now there are some hurdles. A proper ‘Merger & Acquisition’ regulation is pending from Govt. of India. Though discussions between Vodafone, NTT Docomo and TTSL is going on, the deal will take a long route to materalize. The deal can be happened in many ways, as Vodafone India has a tax dispute in India. There can be chances that Vodafone will buy NTT Docomo’s stakes and some stakes from Tata Group. Or NTT Docomo will sell their stakes to Tata Group and then TTSL is merged with Vodafone with several shareholdings changes.

Post M&A there will be lots of changes in Indian telecom, for sure. Vodafone may kill TTSL’s CDMA business and use that spectrum for LTE/4G. Though TTSL is no more interested in CDMA, Vodafone will try to retain this spectrum for LTE in next auction.

Tata Docomo is generally offering cheaper call tariffs compared to A-Vo-Id. That will be a history and subscribers who opted Tata Docomo for low tariff have to move to another operator. Vodafone will not offer affordable tariff to its customers once merger is completed.

The new entity will most probably named as Vodafone India and Tata Group may just be a minority stake holder. As a reader how do you look at this move will it be good for subscribers or no do let us know via comments

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