India’s top telco Bharti Airtel’s managing director and CEO Gopal Vittal welcomed the proposed alliance between Vodafone India and Idea Cellular, which are the country’s second and third largest telcos.
“We welcome the news of the proposed alliance between Vodafone and Idea Cellular. Consolidation is always good, especially for any capital intensive sector with multiple players,” Vittal said on Tuesday.
According to him, a few solid and profitable players are always better for an industry, as they can make substantial investments and offer quality products and services to customers in a sustainable fashion.
Vittal however said that “it is important to ensure that such consolidations are not an outcome of a forced situation created by offering an ‘unfair playing field’ to any particular company while completely destroying the viability of the others.
The executive added that such as situation would be unfavourable, which is not only bad for the sector, customers and the employees, but will also adversely impact the overall investment climate and above all revenues to the government.
Recently, on the sidelines of the 47th World Economic Forum at Davos, Bharti Enterprises Chairman Sunil Bharti Miittal had said that the merger of Vodafone India and Idea Cellular would be a ‘perfect match’.
"It’s a perfect match, if you look at it, the match is not bad. But you know I can’t sit on the minds of Vittorio or Kumar. The strength and weaknesses match very well. Rural - urban, structured portfolio...makes for a good business case and I would support it," Mittal was quoted as saying by media reports.
Vodafone Group Plc and Aditya Birla Group-owned Idea Cellular on Monday confirmed that they are in initial talks to merge their businesses in a cashless deal.
Both the parties involved said that the preliminary discussion is based on equal rights between Aditya Birla Group and Vodafone in the combined entity.
"Vodafone confirms that it is in discussions with the Aditya Birla Group about an all-share merger of Vodafone India (excluding Vodafone's 42% stake in Indus Towers) and Idea,” Vodafone said, adding that discussions exclude Vodafone's 42% stake in Indus Towers.
“The company constantly evaluates various opportunities for enhancing the stakeholders' value. As a part of the exercise, the company has been in preliminary discussions with Vodafone, In view of the fact that the discussion is at the preliminary stage, the Company is not in a position to share any further details,” Idea Cellular said on Monday.