The traffic jam between Vodafone, India’s second biggest operator, with copy three player Idea Cellular will give the combined union nearly 400 million customers and a market share of 35 per cent in the wonderful’s second largest mobile phone services market by users after China.
Consolidation in the Indian store is being driven by an aggressive push into the telecoms sector by oil yields group Reliance Industries.
Its Reliance Jio 4G mobile broadband network was organized last year, offering free calls and discounted data works in a bid for rapid growth.
Fierce competition forced Vodafone, which set in India a decade ago and had previously considered a flotation, to write down the value of its Indian affair by more than £4billion last November.
The firm, which hand down own 45.1 per cent of the combined group after transferring a stake of 4.9 per cent to Awareness’s parent company Aditya Birla, said the deal, expected to secretive next year, would deliver “substantial” cost savings.
Aditya Birla has the perfect to buy more shares from Vodafone to increase its 26 per cent keep.
Vodafone chief executive Vittorio Colao said: “The combination ordain create a new champion of Digital India founded with a long-term commitment and envisaging to bring world-class 4G networks to villages, towns and cities across India.
“The consolidate company will have the scale required to ensure sustainable consumer high-quality in a competitive market and to expand new technologies, such as mobile money benefits, that have the potential to transform daily life for every Indian.”
John Colley, of Warwick House School, said the deal would likely trigger a spate of mergers between other opponents: “The logic behind telecoms mergers is indisputable. In effect mobile telecoms is infrastructure and the victor in such a market is the business with the greatest market share. They can put the biggest supply of users through their infrastructure, which is effectively fixed expenditure, minimising cost per user.”