Vodafone's Indian unit and Idea Cellular announce merger

BBC TECH

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Vodafone's Indian unit and Concept Mobile announce merger

  • 20 March 2017
  • From the part India
Vodafone India storePicture copyright Getty Pictures

UK telecoms big Vodafone has merged its Indian enterprise with Concept Mobile, India's third-largest community, to create the nation's largest operator.

The mixed firm may have virtually 400 million clients, accounting for 35% of the market share, the companies stated in a press release.

The announcement ends months of hypothesis over an impending deal.

Analysts say the merger was to fend off competitors from a brand new operator - Reliance Jio.

Telecom giant sparks India price war

Vodafone's Indian unit in merger talks

Owned by the nation's richest man, Mukesh Ambani, Jio has pressured Vodafone India and Concept Mobile, along with present market chief Bharti Airtel, to chop costs.

Shares in Concept rose virtually four% in Mumbai following the announcement of the deal.

India's main cellular networks are embroiled in what analysts have described as "a vicious worth warfare", began by the arrival of Jio.

Greater than 10 telecom operators are battling it out to attempt to appeal to India's one billion cell phone customers.

That has pressured companies to maintain tariffs low, considerably affecting their profitability.


Evaluation: Sameer Hashmi, BBC Information, Mumbai

It was fascinating that each corporations determined to carry an off-camera press convention to announce such an enormous merger.

However halfway by means of the convention, it turned clear that there have been nonetheless many operational points which wanted to be ironed out.

How will they model the brand new entity? Who would be the new CEO? These questions weren't answered on the press convention.

It is going to take 18-20 months for the entire merger course of to finish. Some job cuts are additionally anticipated as each the companies align operations to trim prices.

However the merger ought to ring in excellent news for patrons as a result of the brand new entity is predicted to slash costs to compete with Reliance Jio.


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