Vodafone says it is in merger talks with Idea Cellular in India
Vodafone said on Monday it was in talks to merge its Indian operations with rival Idea Cellular in an all-share deal that could help the groups counter the fierce competition in the market.business Updated: Jan 30, 2017 14:35 IST
Vodafone on Monday confirmed that it is in talks to merge its Indian operations with rival Idea Cellular in an all-share deal that could help both the groups counter the fierce competition in the market.
In a short statement, Vodafone said it was in talks with Idea’s parent conglomerate Aditya Birla Group. It said any merger would involve Idea issuing new shares to Vodafone and would result in “Vodafone deconsolidating Vodafone India”. But Vodafone did not provide any details of the timing of the transaction, adding that, “There is no certainty that any transaction will be agreed...”.
The merger would exclude Vodafone’s 42% stake in Indus Towers.
The confirmation from Vodafone led to a 29% surge in shares of Idea Cellular.
Speculation has been rife for days about a merger between Vodafone and Idea Cellular to survive the stiff competition after the launch of Reliance Jio.
The telecom industry in India is already reduced to a four players’ game -- Reliance Jio being the new one, and Bharti Airtel, Vodafone and Idea as the incumbents. Marginal players such as Reliance Communications, Aircel and Telenor are already looking at probable consolidation.
Mukesh Ambani is out to conquer his competitors. Reliance Jio, Ambani’s telecom venture is up against incumbent rivals such as Bharti Airtel, Vodafone and Idea Cellular. He wants to change the way India uses the internet, by offering high-speed internet services at ultra low cost. For that, he has already invested Rs 1,71,000 crore (almost $25 billion) into the telecom venture to build India’s first fourth-generation (4G) only telecom infrastructure to provide high-speed internet. On Monday, he announced that Rel Jio will raise another Rs 30,000 crore through a right issue, which the company will use to lay additional optical fibre cable (OFC) and expand existing network.
First Published: Jan 30, 2017 13:56 IST