Vodafone CEO Vittorio Colao says proposed merger with Idea not a step to exit India

Vodafone Group chief executive officer Vittorio Colao clarified that the planned merger with Idea Cellular would not result in an exit from India for the UK-based telecom major. The top executive, during an call after the third quarter results, said the proposed merger is about “creating a stronger asset, create the No. 1 telco in the country…build the largest network in India and build the best management team through a combination of the two management teams.”

vodafone-zozozo

Vodafone and Idea Cellular have officially confirmed their discussions around a potential merger in an all-share transaction earlier this week.

Colao said that Vodafone and Idea merger in India is aimed at creating a “self-funded” Indian joint venture with equal rights to take on the competitive threat, primarily posed by Mukesh Ambani-led Reliance Jio Infocomm.

“The intent of the JV, which will be the largest in India with the widest spectrum coverage and the best management team, is to “self-fund and we are working on discussing mechanics and agreements”, Colao was quoted as saying by media reports.

He however admitted that Indian operations has been dragging the group’s financials, adding that the Group will meet only the lower end of its operating profit guidance range due to “continued uncertainty” in India.

Vodafone currently has around 205 million subscribers in India. The proposed merger with Idea cellular will create India’s leading telco with 390 million users, toppling Bharti Airtel, which currently leads the market with 266 million.

Colao further added that the company anticipates intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions.

The combined entity of Vodafone India and Idea Cellular will have a more balanced subscriber mix, as the current second largest telco is strong in urban areas whereas the Aditya Birla Group telco focuses more on the rural mass market, ratings agency Fitch said in a note on Wednesday. It added that the proposed merger would also help both the telecom operators withstand intense price competition brought by Reliance Jio in the Indian telco market, the agency had said.

Read more on:

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

guest
3 Comments
newest
oldest
Inline Feedbacks
View all comments

Recent Posts

Tata Sky Broadband 500 Mbps Plan With Unlimited Data Costs Rs 2,300 per Month

  Tata Sky has been growing its broadband business quite aggressively over the last few years. Tata Sky Broadband now...

Jio 749 Plan: Unlimited Calls, 24GB Data, One Year Validity and Full Offer Breakdown

Reliance Jio introduced a new Rs 749 plan to existing JioPhone customers alongside two plans for new JioPhone users. The...

JioPhone 2021 Offer Allows Customers to Get 12 Months of Service at Just Rs 749

Reliance Jio has finally introduced a new offer for the JioPhone existing and new users. JioPhone is one of the...