Vodafone-Idea merged entity to surpass Reliance Jio in network capacity terms: Credit Suisse

The proposed merger of Vodafone and Idea Cellular will create a telco with 35% network capacity share in the country, surpassing Reliance Jio, which would have 31% network capacity share, according to Credit Suisse. It however added that the Mukesh Ambani-led telco would continue to lead in capacity share of data networks “by virtue of its large data spectrum holdings and exclusive 4G deployment.”

mobile-india-4G

In a note, the brokerage said that the Vodafone-Idea merged entity would command a 26% spectrum market share, and it will displace Bharti Airtel to second place. Airtel currently lead with 21% spectrum market share, followed by Reliance Jio with 17% spectrum market share.

The brokerage said that the merged entity’s spectrum footprint will be comparable with Bharti Airtel and Reliance Jio as compared to Vodafone and Idea Cellular’s individual spectrum holdings that lack 3G and 4G capabilities.

The Aditya Birla Group and Vodafone Group recently confirmed their talks to merge Vodafone India and Idea Cellular in an all-share transaction. The move is being seen as a step to counter looming threat from Reliance Jio, which is currently offering free services to its customers in India.

Both the firms have reportedly appointed consultancy firms EY and Deloitte, respectively, to conduct due diligence for the proposed merger. Credit Suisse report also noted that there would be an imbalance in the combined entity’s revenue market share (RMS) and network capacity share.

Also read: Bharti Airtel hits back at Reliance Jio for causing ‘huge loss’ to company

“The merged entity’s 35% network capacity share would be significantly behind its 42% RMS…Historically, revenue market shares have had decent correlation with capacity shares, but with the imbalance evident in the above figures, pressure would sustain on incumbents to continue to add capacity at a time when Jio has recently announced expansion plans of its own,“ Credit Suisse sad.

The proposed merger of Vodafone India and Idea Cellular would also create the nation’s largest telecom operator. A new Vodafone-Idea entity would have about 390 million users, exceeding current market leader Bharti Airtel’s 266 million, according to various estimates.

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.

23
Leave a Reply

avatar
12 Comment threads
11 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
11 Comment authors
Vodafone India Revamps it’s 4G/3G Data Plan to Compete Against Reliance Jio; Offers 1GB Data at Rs. 48Tata Teleservices in talks to join proposed RCom-Aircel-MTS entity: Reporttri_visVodafone Sakhi Packs Allow Women To Do Private Recharging Without Sharing Mobile NumberNikhil Recent comment authors
newest oldest most voted
trackback

[…] Also Read: Vodafone-Idea merged entity to surpass Reliance Jio in network capacity terms: Credit Suisse […]

trackback

[…] Also read: Vodafone-Idea merged entity to surpass Reliance Jio in network capacity terms: Credit Suisse […]

Recent Posts

RCom Asked to Clear Dues of Rs 453 Crore to Ericsson Within Four Weeks

Observing there was a ‘wilful default’, the Supreme Court on Wednesday held Anil Ambani, chairman of Reliance Communications (RCom), guilty...

Airtel Rs 998 Prepaid Recharge With 12GB Data Benefit Unveiled Keeping Long-Validity Users in Mind

In a bid to take on the competition, Bharti Airtel has introduced a Rs 998 prepaid recharge with validity for...

4G Subscriber Base in India is Five Times More Than That of 3G: Study

Rising hunger for data amongst Indians led to 109% growth in data traffic in 2018, fuelled primarily by 4G adoption,...