Vodafone, Idea merger creates India’s biggest telecom firm

Idea Cellular, the Kumar Mangalam Birla-led telecommunications major, agreed on Monday to merge with the Indian unit of the U.K.-headquartered Vodafone Plc, making it a $23 billion giant. The merged entity becomes India’s largest mobile telephony and data service provider with 39.25 crore customers, ahead of the current market leader Airtel, which has a 26.44 crore user base. Both figures are provided by the Telecom Regulatory Authority of India.A joint statement issued by Vodafone and Idea said the combined company would have a 35% customer market share and 41% revenue market share. It said the brand strategy for the new firm “will be developed in due course” and “will leverage customers’ affinity for both existing brands, built up over the past decade.”Kumar Mangalam Birla will be the chairperson of the merged entity. The move, though not surprising, has stoked rumours that the current tariff war, initiated by the Mukesh Ambani-led Reliance Jio’s entry into the high-speed data market in 2016, will possibly come to an end in the near future.ajan Mathews, director- general of the Cellular Operators Association of India, said, “There is currently a tariff war in the market which may not be sustainable for long. This has also severely impacted the revenue stream of operators, not just in terms of an increase in cost but also in terms of a marked decline in the revenue stream. All these have put the financial condition of this industry at risk and increased the debt to ₹4.3 lakh crore, also leading to a severe decline in government revenues from the industry.”

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