The combined entity, led by Vodafone India, would have almost 400 million subscribers.
Vodafone and Indian operator Idea Cellular are reportedly close to reaching an agreement to merge their India operations, according to local press.
According to the reports, both operators are expected to announce the merger agreement by the end of the week and finalize the deal within a month. Vodafone’s 42% stake in cell tower firm Indus Towers – a company in which Idea and rival Bharti Airtel also hold shares – would not be included in any merger with Idea, the U.K. telco had previously said.
A potential merger between Vodafone and Idea would create a new market leader in India, with approximately 395 million mobile customers, according to the latest figures from the Telecom Regulatory Authority of India. The Indian mobile market is currently dominated Bharti Airtel with more than 260 million subscribers.
The combined entity would likely have to divest assets, including spectrum, in order to comply with local regulations, which stipulates a single operator can’t have more than a 50% share of subscribers and revenue in a determined telecom service area. Local mobile operators are also limited to accumulating no more than 25% of available spectrum nationwide.
The Indian mobile market is currently experiencing a price war due to the aggressive market strategy implemented by new entrant Reliance Jio Infocomm. The telco has been offering nationwide voice and LTE data since September 2016, which has forced rivals to drastically cut prices in order to remain competitive. Reliance Jio is expected to continue offering free voice and data until at least the end of March, after which it would introduce a monthly fee for data.
