Vodafone Idea to Merge in Backend as Part of New Brand Strategy

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New development has come up concerning the Idea Vodafone merger where both the companies have decided that they would not opt for a different brand name soon since the introduction of a new name in the current market scenario might confuse customers. A person aware of the matter conveyed the news that the newly merged entity would be combined in backend whereas on the surface the operations and plans will continue to exist in the same manner reports ETTelecom.

Vodafone Idea merger

An analyst from the firm working on the merger of the two companies remarked that the merged entity which will be listed as Vodafone Idea Ltd and it will work on a two-fold strategy with separate brands for rural and urban customers. The combined entity will take up this plan since Vodafone has a stronger reach in urban areas where people rapidly opt for postpaid plans, whereas in rural areas where the prepaid customers are more in number, Idea Cellular fares better than Vodafone.

When posed with questions from ET, both Idea Cellular and Vodafone India did not respond on press time.

DoT has stalled the merger which was slated to be finalised by the end of June this year because of a demand which the department will raise for Vodafone India, asking for OTSC charges from the company. The department has sought legal opinion on the same matter.

This merger will forge an entity which will eve surpass Bharti Airtel in terms of subscriber base. The third and second largest telco will join hands to form a single company, and as of right now they do not intend to roll out new plans under a different brand name any time soon since the introduction of a new name in the market might break existing connection with the customers.

Brand expert Harish Bijoor also presented his thoughts on the issue as he said, “The customer will get impacted if the merged entity comes up with a new tariff offer which in times of discounted price plans is difficult." He further added, “So that the subscriber does not get unnerved with a new image, all changes to brand, etc. should happen months after the merger.”

Founder of Brand Eagle, Ronita Mitra also commented that operations like customer service and billing could present a hurdle right after the merger. She said, “The new entity will have to be careful that these problems do not crop up.”

Since the decision of going through a merger was finalised in March last year, both the companies have been trying to find middle ground regarding a brand strategy. The newly formed Vodafone Idea Ltd would like to craft an approach which would make use of the already established images of both the companies in the vast Indian market.

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Junior Editor

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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