Vodafone and Idea Increase Incentives for Distributors, Reliance Jio and Bharti Airtel Receive the Blow

With the merger approaching its final stages, the Kumar Mangalam owned telco Idea Cellular, and Vodafone Plc held Vodafone India have drastically intensified their efforts in a quest to rake in as many subscribers as possible. The merger which was finalised last month has paved the way for the formation of the largest telecom operator in the country with the most prominent subscriber base and revenue market share. The blow from Idea and Vodafone has been delivered to the other large telcos like Reliance Jio and Bharti Airtel.

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Incentives to Retailers Increased

The distributors for all of the companies mentioned above have also caught a whiff of the increasing efforts from Idea and Vodafone’s side to amass more and more subscribers. Notably, Vodafone and Idea were giving out Rs 70-80 worth of incentives to each of its distributors. Now those numbers seem to be soaring high. As per a distributor based in Mumbai circle, “Vodafone and Idea’s retailers have been told that for every new customer, they will get Rs 180-250, depending on the recharge plan they manage to sell. Higher the recharge amount, more the incentive.”

Making Up for Lost Subscribers

It is also worth noting that the merger of both the companies comes at a very crucial time when Idea Cellular was losing its share of the pie. Now with the merger already finalised Idea Cellular and Vodafone will release aggressively priced plans to attract more and more subscribers. Right now, combined, the newly formed entity, Vodafone Idea, boasts of 408 million users under its umbrella or 37% of total market share reports Economictimes.

However, there is still a small hurdle in the form of conditions for the merger which require the combined entity to shed subscribers in six circles — Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra and UP (West) — to adhere to the 50% subscriber cap rule. Also, as per a report published by brokerage firm Jefferies, out of the 22 circles in which Idea Cellular operates, it lost subscribers in 21 circles while suffering a significant dent in Maharashtra, one of its key circles. Idea and Vodafone together have lost subscribers in 14 circles.