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

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.

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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.