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Vodafone and Idea confirm that they are in talks to merge

Global telecom giant Vodafone has confirmed that it is currently in talks with national telecom provider Idea, which is owned by the Aditya Birla Group, to merge the two companies. Idea’s shares rose about 30% as the talk of the merger increased. Vodafone has been looking to merge with either Jio or Vodafone in order to stay relevant in the highly competitive telecom market.

Most telecom companies have a lot of debt on their balance sheets and competing with Jio, in a price war was going to be extremely difficult. Hence Vodafone and Idea are in talks to merge. The two companies complement each other as Idea is strong in rural India, while Vodafone is strong in urban India.

Jio’s entry has upset the business plans of all telecom operators with industry veterans saying that only the top 3-4 players would exist due to the intense price wars unleashed by Jio. Jio has made all voice calls and text messages free for all users for life. It plans to charge users only for the data used. It has offered free data till the 31st March 2017.

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