Come to the end of July, one of the biggest merger and acquisition deal approached completion following the final nod from the Department of Telecommunications. The Idea Vodafone merger which was in talks since March last year was finalised in the last week of July paving the way for the largest telco of the country in terms of subscriber base and revenue market share. The Kumar Mangalam Birla led telco, and the Indian wing of the British company Vodafone merged their operations following this deal, resulting in the combination of $10 billion synergies. However, there is a big question looming over the merger – How much will the consumers benefit from this deal? Keep reading to know what we think about the issue.
Better Network Quality
The combination of the assets of two of the biggest telcos in the country has led to the formation of the largest telecom entity with the most subscriber base. Keeping in mind that both the companies are strong players on a national-international level, it is undoubtedly evident that the joining hands of these two companies will mean better services for the consumers. It is our opinion that the combined cash reserve, airwaves, wireless assets and workforce will grant more power to the newly formed company to better tackle competition. Also, as we have remarked in our previous takes, a massive number of towers and sites which both the companies owned in combination will lead to the expansion of the network in the country. Notably, with this merger, the combined entity has surpassed the largest telco of the nation concerning subscriber base and revenue market share.
Better Customer Experience
The combined synergies of both the companies will also mean that Vodafone-Idea Ltd will be able to provide better services to the customers at even more attractive prices. We also think that the large combined cash reserve of the company will mean more investment in R&D thus leading to innovative products in the market. Moreover, the company will also have the buffer to provide better consumer-centric services with the combined resources.
In addition to the above two points, Vodafone Idea Ltd will now be able to focus its efforts towards genuinely digital services. Previously we have also discussed the increasing intensity and role of content for the telcos as another product; we think that with the telecom industry marching towards an intersection with the IT sector, it is much more crucial for the company to diversify its effort in the content provision area as well. This merger will assist the company in deploying more and more digital services across its entire range of offerings and will also enable it to rack up more and more content sources for its apps.
The Telecom Commission, highest decision-making body in India for the telecom sector has also made comments on the merger saying that the consolidation of these two companies will bring stability to the pricing and industry in general. Keeping this in mind, and basing our argument on the comments by the Secy further strengthens our opinion about stability in the telecom sector. Already the prices have headed towards a saturation limit and are expected to stabilise further especially now that the merger had been completed. With three private telecom operators and one public telco dominating the scene, the pricing of the services is expected to rest at a stable mark now.
Summarising, it goes without saying that the merging of Idea and Vodafone is only good news for the consumers. In addition to better services, improved network and digitalised offerings the industry experts have highlighted that from a financial point of view as well, the formation of Vodafone Idea Ltd is a positive signal only. We agree wholly with the opinions that on both the big and small scale, the Vodafone Idea merger will only paint a good picture for the consumers. Down in the comments below tell us what you think about the merger, and what are the ways in your opinion by which the average consumer will benefit?