Vodafone India-Idea Cellular merger talks, Idea denied rumors: Report

By August 24th, 2016 AT 12:15 PM

According to a CNBC TV18 report citing unnamed sources, Vodafone India and Idea Cellular are involved in talks for a possible merger. If ever occurred, the deal would dislodge Bharti Airtel from its position as a market leader.

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Idea is said to have rejected the possibility of merger talks. “Your query on Idea [being] up for sale, picked up from wherever and that our company is speaking to Vodafone is baseless and absolutely false. It is preposterous!” a spokesperson for Idea reportedly commented to the channel.

Vodafone, on the other hand, declined to comment on the speculation. In April 2016, Vodafone had 19.79 crores subscribers in India and Idea had 17.46 crore subscribers, making the duo the second and the third largest players in the market in terms of subscriber base.

According to Live Mint, both the operators are struggling with their data-driven market in the scenario of the rising competition. Especially, the telecom venture Reliance Jio is setting its foot commercially in the market. Hence, there are chances that they want to get bigger.

However, the combined entity would make more than 50% market share in a few circles, which could go against the anti-trust norms. Hence, receiving a clearance from the Competition Commission of India is very unlikely.

Meanwhile, there is another set of argument that the talks would not be that of the merger. Rather, it could be other forms of the merger such as spectrum-sharing, Mint added in its report.

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Mandar Sherbet
Mandar Sherbet

Vodafone & Idea could do a technical tieup in terms of 4G roaming pact, just like AVoId had for 3G until a few months ago. Airtel has clearly stepped out of the 3G ICR agreement & certainly won’t be interested in offering 4G roaming to Vo-Id customers. Vo-Id together currently have 4G networks present in atleast 15-16 circles. They could plan their bidding during the upcoming auctions to have 22 circles 4G coverage together. That way they can save a lot of pressure on their respective balancesheets.

Munnu
Munnu

Well said. Airtel have pan India 3G(except Kerala) and 4G footprint, so they won’t be looking for any ICR or spectrum sharing with Idea or Vodafone. No operator have potential to compete with Jio, except airtel. And if Idea and Vodafone don’t react now, then 4G market will be pushed to duopoly by airtel and Jio. A new cartel will arise.

Ashish Maharashtra
Ashish Maharashtra

I think they will do spectrum trading sharing or also may go for 2g,3g,and 4g intercircle sharing where one of them dont have 3g or 4g presence if its allowed, i said 2g because even 2g signal of one operator strong in one area and weak in other and vice versa so in order to improve service from. Customer point of view… Its my personal view if all this sharing is allowed by trai i dont have idea wheather its legal or not

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