Vodafone India could merge with Idea Cellular or Reliance Jio: Reports

Vodafone India may be looking to merge with one of the leading telecom operators in India in the wake of fierce competition from Reliance Jio, The Telegraph reported on Sunday.

The report added that Vodafone is currently weighing a potential merger of its Indian arm with rivals as it seeks a turnaround in the subcontinent’s cut-throat mobile market. “The company has been caught in the crossfire of a sibling rivalry that has triggered a price war and put the brakes on a planned stock market flotation of Vodafone India. The problems have weighed on the FTSE-100 giant’s shares in the last year, overshadowing improvements in its core European markets,” the publication reported.

The report further added that Vodafone is looking at the possibility of a tie-up with either Jio, or Idea, another of the top four providers. “Jio and Idea could themselves combine, however.”

A separate Mint report, citing an industry executive, said that it is very unlikely for Mukesh Ambani to go for merger with Vodafone India because it is not (in) his DNA to write large cheques; his strategy is different. “Birla group could likely be the one and the companies could opt for share swap. The conditions for that would be that Vodafone, as it is unlisted, will need to get valuation done and receive permission from Competition Commission of India,” the person was quoted as saying.

Tower

Vodafone India has already received Rs 47,700 crore from its parent company. Most of this equity infusion was used to reduce its debt from Rs81,500 crore in March 2015 to Rs35,430 crore by the end of second quarter of 2016-17.

Vodafone’s parent, in November, had cut the valuation of its Indian unit by €5 billion citing increased competition, which had caused its global loss to double. The telco also delayed its plan to launch an IPO to be listed on stock exchange in India.

The country’s second largest telecom operator had 200 million mobile customers at the end of September 2016.

The Indian telecom industry is already seeing some action on the consolidation front with Reliance Communication finalising its acquisition of Sistema Shyam Teleservices, and merging wireless operations with Maxis-owned Aircel. Smaller GSM telco Telenor is also looking out for mergers. India’s leading telco, Bharti Airtel, is also said to be in advanced talks to buy Telenor’s India business.

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56 Comments on "Vodafone India could merge with Idea Cellular or Reliance Jio: Reports"

 

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[…] Also Read: Vodafone India could merge with Idea Cellular or Reliance Jio: Reports […]

Sam
January 10, 2017 8:36 pm 8:36 PM

British VODAFONE Leave INDIA as soon as Possible…

[…] Also Read: Vodafone India could merge with Idea Cellular or Reliance Jio: Reports […]

Chetan
January 10, 2017 2:15 pm 2:15 PM

By no means Idea or Vodafone are fools enough to buy huge spectrum in last outgoing spectrum and within 2 months announce acquisition or mergers… Corporate strategies are not written on such thin papers…

To me it appears a report based on apprehensions expressed over volatility within Vodafone UK parent company. That does not necessarily means sell off or merger in near future…

Premu
January 10, 2017 12:29 pm 12:29 PM

If Vodafone n idea merge, then they can easily beat jio n airtel as they will have 10-15 mhz of 1800 mhz in every circle..which is the best suited band for 4g..also with 900,2100 n 2500 spectrum in hand they will b hard to beat..

Aam Admi
January 10, 2017 12:26 pm 12:26 PM

First Aircel
Then Telenor
Now vodafone ?
Merger will be great for Indian competitive market.

Unknown
January 10, 2017 11:51 am 11:51 AM

They may sell their half business to idea cellular in circles where idea is weak and the other half to Jio or any top telco. So in India no foreign telecom company will be there. Only Indian telecom companies which will in turn good as money will not go outside of India.

Pratik
January 10, 2017 11:05 am 11:05 AM

I don’t think it’s possible. May be they merger their Hardware assets.

DGupta
January 10, 2017 10:21 am 10:21 AM
In no large country do you have more than 3 major telecom operators that are profitable. Usually. most of the profits go to just the top 2. No. 3 tends to break even and has to fight hard to compete. This is because the network effect makes it a natural monopoly. Hence the need for strong regulatory protection against anti-competitive, anti-consumer behavior. On current strengths, Airtel is in a strong position to be in the top 2. The other one can be Vodafone or a new merged entity. Jio can be #3 in telecom if they keep spending petro money.… Read more »
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