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Why Vodafone & Idea Merger?

 

Now, This is really ‘what an Idea Sirji’ and the Hot topic these days within the Telecom sector these days is about the merger of two leading players of the industry Vodafone and Idea Cellular . While this is good news according to financial analysts and this will make the debt laden telecom sector more stable financially, the merger is seen as a potential challenge to the Airtel Bharti and Reliance Jio which are making good profits by launching various attractive schemes for their customers these days. While Jio brought a near about revolution by distributing it’s free 4G simcards and Airtel was not far behind by providing 4G internet plans at minimal rates. 

 

 


Interesting Ideas and Biggest Telecom Entity in terms of revenue and service subscribers

Analysts are giving an indication towards the Vodafone and Idea merger bringing in some good amount of money and reduction in debt for the Telecom Industry and with two great teams working together, we can expect a plethora of ideas and hence leading to various interesting plans for the customers. As per information from Indian Express, we came to know about the Merger talks going on between Vodafone UK and Aditya Birla Group and the all share merger if happens, will enable the new entity to take on rivals including Airtel and Reliance Jio, intensifying the tough competition in the segment. Moreover, it would be an exciting experience to see Vodafone (Second largest largest telecom service provider in India, with 202.79 million users) and Idea Cellular (Third largest service provider with 187.68 million users) working together the common goal of earning revenue while increasing the customer base and  market share.

While a lot of interesting partnership happening these days like the Congress and Samajwadi party political alliance, we can wait to find if India ko ye (Vodafone-Idea) saath pasand hai. 


Why Merger?

As per information from news sources, Vodafone headquarters in UK were not happy with the tax regulations and legal compliance issues in India and the free internet services being provided by Reliance Jio just added to the trouble. Hence, Merger seems to be a wise option for Vodafone India, who has not made net profit on full year basis and for operating in a tough competitive business environment.

Idea Cellular will also reap profits from the merger and the share price of Idea Cellular has risen over 15 per cent since January 18 amid speculations of such a merger, which would 


Economies of Scale is another reason why Idea-Vodafone merger could increase profit margin as costs will be reduced. The production techniques of two great companies will come together and customers will benefit from the combined efforts.


Well, as of now we can expect all the good things is the merger happens and till now we only have news about the confirmation of discussions going on from London-based Vodafone Group Plc .Moreover, as per news from economic times (Indiatimes.com)

Shares of Idea Cellular surged nearly 30 per cent intraday reacting to the merger news. Vodafone’s London Stock exchange listed shares were also up by 4 per cent. Hence, we can expect the good things in store for stake holders in both the telecom giants if the merger happens. Till then, we’ll have to relax and keep a close watch on the discussions and important news.

 

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