Britain's Vodafone is to join Idea Cellular to become India's biggest telecoms business with 400 million customers, overtaking market leader Bharti.
A huge telecoms merger has been announced in India.
Consolidation is a much anticipated and very welcome development in this beleaguered telecom sector
Telecom analyst, PwC India
Britain’s Vodafone is joining with Idea Cellular in a deal worth the equivalent of 21.3 billion euros.
Together they will become India’s biggest telecoms business with almost 400 million customers, overtaking the market leader Bharti Airtel.
The new firm would have about 40 percent of revenue of the world’s second-biggest mobile phone services market by users after China.
Vodafone, which is the world’s second-largest mobile phone operator, will own 45.1 percent of the merged entity.
Vodafone-Idea merger: 10 things it means for Indian telecom industry https://t.co/S4B4Fp6q0r via
gadgetsnow</a> <a href="https://t.co/wtefhm8SxV">pic.twitter.com/wtefhm8SxV</a></p>— Times of India (timesofindia) March 20, 2017
This is the latest and biggest consolidation in India after the arrival last year of a new company sparked a brutal price war in the cutthroat market.
The newcomer, Reliance Jio Infocomm, has been providing free services on its 4G mobile broadband network for months to establish a customer base.
That has forced India’s three biggest operators – Bharti, Vodafone and Idea – to slash prices and accept lower profits.
Vodafone alters strategic course as it merges its #India operation with #Ideahttps://t.co/jZn4Iv557zpic.twitter.com/TTZwhekVu9
— TelecomTV (@TelecomTV) March 20, 2017
Consolidation
Bharti Airtel is in the process of buying Telenor’s India operations, while two smaller players controlled by Malaysia’s Maxis and Russia’s Sistema are merging their operations with Reliance Communications’ wireless unit.
“Consolidation is a much anticipated and very welcome development in this beleaguered telecom sector,” said Arpita Pal Agrawal, a partner and telecom analyst at PwC India.