Friday, 20 January 2017

Vodafone India seeks merger to escape price war

By Nick Wood, Total Telecom
Monday 09 January 17

Telco reportedly keen on tie-up with another one of the country's top three mobile operators.

Vodafone is considering whether to merge its Indian unit with one of its local rivals in order to ease the pressure wrought by the market's ongoing price war, it emerged over the weekend…

Vodafone is considering whether to merge its Indian unit with one of its local rivals in order to ease the pressure wrought by the market's ongoing price war, it emerged over the weekend.

Operators have been lowering tariffs and launching eye-catching offers ever since newcomer Reliance Jio Infocomm began offering free nationwide calls and mobile data last September.

Vodafone is feeling the heat; in November it wrote down the value of its Indian operation by €5 billion, blaming it on the competitive situation there.

Sources cited by the Telegraph on Saturday claimed that Vodafone is open to the possibility of joining forces with Jio, or alternatively, Idea Cellular – another one of India's top three mobile operators. However, these same sources suggested that Idea and Jio could also merge.

According to the report, Vodafone has also postponed its long-awaited plan to float its Indian business on the Bombay stock exchange until the price war subsides.

Vodafone India is the country's second-largest mobile operator by subscribers, with a market share of 18.7% at the end of October, according to statistics published by the Telecom Regulatory Authority of India (TRAI) on Monday. Market leader Bharti Airtel had 24.3%, while third-placed Idea Cellular had a market share of 17.2%.

Reliance Jio, which had only been offering nationwide services for a month when these figures were gathered, had a market share of 3.3%.

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