Vodafone-Idea merger: An overview

Pages: 1654-1658
Sona Raghuvanshi (Amity Global Business School, Mumbai, Maharashtra)

This case throws light on one of the biggest mergers in the Indian telecom sector between Vodafone India and Idea Cellular. Now known as Vodafone Idea Limited, the combined entity has 31% share in Indian market with 394.8 million users. This makes it the largest mobile telecommunications network in India and third largest mobile telecommunications network in the world. The merger deal announced in March 2017 and completed in August 2018 is valued at around US$ 23 billion. The reason behind their amalgamation was the belief that this merger has the potential for substantial cost saving and also has 3G/4G spectrum gain vital in market share battle against Reliance Jio and Airtel. The merger is expected to be beneficial for all stake holders including the combined entities, consumers as well as the country. But success of the merger is largely dependent on how effectively they resolve regulatory as well as cultural hurdles. At present, Vodafone-Idea Limited is facing tough competition from its aggressive competitor Jio, which is trying to capture Indian telecom market by luring the customers with never heard before offers. Not only this, combined entity is also facing a penalty for allegedly denying Jio adequate points of interconnection. Now only time will tell if one of the biggest telecom mergers will change the destiny of Indian telecom sector or not.