Vodafone confirms tie-up talks with Idea

30 Jan 2017

UK-based telecoms giant Vodafone Group has confirmed it is in talks regarding a potential merger of its Indian division with the market’s third-placed cellco Idea Cellular. The Economic Times writes that the pair are considering an all-share merger that would see Idea issue new shares to Vodafone, and Vodafone India being deconsolidated from Vodafone Group. The launch of aggressive and deep-pocketed newcomer Reliance Jio Infocomm (Jio) in September, with its strategy of offering unlimited voice services on all plans and its disruptive launch promotions which offer customers unlimited free access until the end of March 2017, has heaped additional pressure on the already-cash-strapped incumbents, accelerating the ongoing process of consolidation in the market.

As previously reported by TeleGeography’s CommsUpdate, market leader Bharti Airtel is in talks to acquire Norwegian-owned regional provider Telenor India. Meanwhile, the three-way merger of Reliance Communications (RCOM), Sistema Shyam Teleservices Ltd (SSTL, operating as MTS India) and Aircel has been derailed by an order from the Supreme Court. The apex court has halted the sale or transfer of Aircel’s spectrum rights and has threatened to cancel its licences unless Malaysian businessman Ananda Krishnan, who controls Aircel’s parent company Maxis Communications, appears in court to answer accusations of bribery related to the company’s entry into the market in 2006.