Vodafone-Idea merger to finish by 2019; Combined entity - Vodafone Idea Ltd.

swatkats

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Once the merger goes through, the merged entity will become the largest telecom company in India with a market share of roughly 43% (currently Vodafone has 23% while Idea has 19% share), ahead of market leader Bharti Airtel Ltd, which has a 33% share of the market

Vodafone Group Plc has in a statement informed the London Stock Exchange that it is in talks with Idea Cellular Ltd about a potential merger of the two companies.

The move, as and when it is announced, will be the largest piece of consolidation in India’s telecom sector, following the launch of commercial services by Reliance Jio Infocomm Ltd in September 2016.

The Vodafone statement reads: “Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India (excluding Vodafone’s 42% stake in Indus Towers) and Idea. Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India. There is no certainty that any transaction will be agreed, nor as to the terms or timing of any transaction.”

Source: http://www.livemint.com/Industry/RfPrydQuDGrd2CN7WtHFRM/Vodafone-confirms-merger-talks-with-Idea-Cellular.html
 

cellar_door

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Isnt there a government regulatory body that watches for things like these? It feels like it would get them too close to a monopoly.
 

vishalrao

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What does "deconsolidating Vodafone India" mean? They will stop using the Vodafone brand here and stick to IDEA ?

I wonder what happens to the YOU broadband acquisition by Vodafone, I hope they also provide wired high-speed internet to more places.
 

swatkats

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Isnt there a government regulatory body that watches for things like these? It feels like it would get them too close to a monopoly.
CCI mainly. After that High court where its office registered and Even DOT approval is a must.

Wouldn't these companies know that if they merge they would face these legal bodies. I think if they merge they will go a head.


Also if they merge its gonna be like...
  • Airtel + Telenor = Airtel
  • Jio
  • Idea + Vodafone = XYZ
  • Aircel + Rcom + SSTL + Tata = ABC
  • BSNL + MTNL = BSNL
Just 5 companies in the End.
 
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6pack

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What does "deconsolidating Vodafone India" mean? They will stop using the Vodafone brand here and stick to IDEA ?

I wonder what happens to the YOU broadband acquisition by Vodafone, I hope they also provide wired high-speed internet to more places.
Yup, looks like Vodafone is trying to get out of the Indian market. All the tax claims from IT and ever changing govt rules must be wearing them down.
 
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pratikb

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They would lo
Isnt there a government regulatory body that watches for things like these? It feels like it would get them too close to a monopoly.
they would loose extra spectrum as no company can hold more than few percent of that circles allotted spectrum.

Although they would be big but I hope they are well capitalized.

Vodafone must exit the Indian market.
Not at all good consumer friendly company.
 

smAsh

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ˆˆNah... They once had the best mobile service in the country(when they were Hutch). Nowadays Vodafone sucks! Airtel and Idea are better than Vodafone.. Hell , Even BSNL is better than Vodafone.
 
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pratikb

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This



They do have the best mobile service in the country though...
It's not the best. Their speed is locked and I myself had 5 vodafone connection. Now it's just one. I ported out all of them. Highly rigid billing which is company centric and not customer centric.

It's no more best network.

Currently bsnl is doing well.
 

vivek.krishnan

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It's not the best. Their speed is locked and I myself had 5 vodafone connection. Now it's just one. I ported out all of them. Highly rigid billing which is company centric and not customer centric.

It's no more best network.

Currently bsnl is doing well.
But overall, it is the best. Additionally, When my cousins turned up from Kerala, I had to give them Jio SIMs as they had issues with BSNL in Mumbai - Roaming issues with MTNL.
 

abhi1984

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Thanks to this my buy stated here:
Reliance Jio Rollout

paid off. In case any one is wondering, I was averaging down as the price went lower to bring down my buying price in anticipation of a longer wait for the market correction or Airtel/Idea doing something drastic to counter Jio. Made nearly 60% on Idea and 17% on Airtel. It remains to be seen how long can Jio continue with the free connection drama.

As for the background of the merger Vodafone had to write down a large part of the Indian business back in November last year:
http://www.telegraph.co.uk/business/2016/11/15/vodafone-takes-5bn-hit-on-indian-business-as-competition-bites/

I am no accounting expert but this all are more about making the financial results more attractive. Consolidating means you combine two or more entities into one and they report as one. So if one screws up badly it shows up on the combined statement. Companies normally tend to consolidate subsidiaries making tons of money to show their revenue growth as high, you know to make the news headlines shine. For a money loosing subsidiary they are deconsolidated to remove the losses from the revenue statements (not entirely though).

As it says Vodafone will get shares in Idea for this merger, they can move the revenue/losses from this arrangement under "other income" or income from investments header ie unrelated to their "core business", yes that will not be true but thats how the game is played. That way they still have a foot in the growing Indian telecom market. There is a company called Bharti Infratel which was a JV between Airtel + these two for the telecom infra, shares for that companies have taken a hit.

They do say its uncertain whether this will go through as there are many steps remaining before the merger is finalised.
 

nRiTeCh

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I will stay with Vodafone as their network is unbeatable and quality as well. Only it sucks in bill calculation as I mentioned in some previous threads. But for speeds and network I do rate it no. 1. Also agree the experience goes from zone to zone and person to person.
 

swatkats

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I don't know about other circles but Vodafone was dead in AP Circle long back, Their network is not that great. Only Idea and Airtel have appreciable 2G/3G coverage. Now Jio joins them with decent 4G coverage.
 

pratikb

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CCI mainly. After that High court where its office registered and Even DOT approval is a must.

Wouldn't these companies know that if they merge they would face these legal bodies. I think if they merge they will go a head.


Also if they merge its gonna be like...
  • Airtel + Telenor = Airtel
  • Jio
  • Aircel + Rcom + SSTL = ABC
  • BSNL + MTNL = BSNL
  • Tata might fight it all or Merge with Jio


Just 5 companies in the End.
In due term,Jio will gobble abc as well.already Rcom spectrum is shared with Jio for 850mhz Cdma to Lte swap.
 

pratikb

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Rcom is struggling with huge debt. Last I saw,it was 56000 cr.
It still took in Mts( Russian ) then Aircel.
It's about time like 1-2 yrs when it will be officially merged with jio.
 

swatkats

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The U.K.’s Vodafone and Aditya Birla group firm Idea Cellular are likely to finalise within a month the mega merger deal that will create India’s largest telecom firm, according to sources.

“The companies are likely to announce a definitive signing agreement by February 24-25,” said a source.

“They are almost ready to sign the agreement and should not take more than a month to announce it,” according to another source.

However, both Vodafone and Idea declined to comment on the matter.

Source: http://www.thehindu.com/business/Industry/vodafone-idea-may-merge-this-month/article17330206.ece?homepage=true

If they cross 50% combined share in any circle, their merger will be stopped by CCI.. So their dear friend Airtel is helping them: http://www.livemint.com/Industry/zSbRM5Kr4ZA7gUCy93bQML/Airtel-sees-opportunity-in-IdeaVodafone-merger.html
 

6pack

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No wonder I'm getting calls from Airtel sales every day from unknown mobile numbers asking me if I'm interested in their plans.
Idea and Vodafone are much better in my area compared to Airtel. I don't even get Airtel signal in my house thankfully.

In the article in the quote, it's mentioned that Vodafone and Idea will have to let go of some customers. What if the customers don't want to move to other shitty operators? Will they force customers?
That 50% govt rule is a bad policy. It allows bad operators to stay in business.
 
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