Idea and Vodafone merges to form India’s Largest Cellular Network

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Idea Cellular Network of Aditya Birla Group led by Kumar Mangalam Birla agreed for the merger of Vodafone India unit and Idea Cellular Network. What is so exciting in this.. Lets explore the facts and figures behind this merging.

The merged company becomes India’s largest and World second largest telecom company.

The merged company will have 39.25 Cr customers while Currently, India’s largest network Airtel has 26.44 crore customers. 

Kumar Mangalam Birla and Vodafone CEO Vittorio Colao

The combined company would have 35% customer market share and 41% revenue market share. While Airtel has 29% customer market share and 33% revenue market share.

Kumar Mangalam Birla will be the chairperson of the $23 billion new combined telecom firm.

Kumar Mangalam Birla

Apart from figures or statistics, this step is taken to counter the tariff war challenged by Mukesh Ambani-led Reliance Jio. There is hyper-competitive pressure always in India’s telecom industry even before Reliance Jio. There was a merge of Aircel, R-comm, and MTS in the past. Companies like Videocon and Etisalat left this industry due to high competition and pressure. From 13 operators in the past, Indian mobile telecom market is down to 4 or 5 operators.

Idea and Vodafone claim that this merger is between equals. But, Idea will have to buy 4.9% stake in Vodafone for Rs.3900 Cr to increase the Aditya Birla stake to 26%. So, it is not a merger of equals.

Experts say that the tariff war triggered by Reliance Jio may not be sustainable for long and will possibly come to end in near future.

 

What would be the name of the combined company? Suggest a name in the comments section.

Thank You!

 

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