Vodafone confirms merger talks with Idea Cellular; to create India's largest telco

Ending months of speculation, Vodafone on Monday confirmed it is in talks with the Aditya Vikram Birla group for the merger of its Indian entity and Idea Cellular in what will be the largest such deal in the country`s telecom space once it materialises.

New Delhi: Putting paid to months of speculation, Vodafone on Monday confirmed it is in talks with the Aditya Vikram Birla group for the merger of its Indian entity and Idea Cellular in what will be the largest such deal in the country`s telecom space once it materialises.

"Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India -- excluding Vodafone`s 42 percent stake in Indus Towers -- and Idea," the Indian entity`s parent company said in a statement.

"Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating of India operations,” Vodafone India said.

A Vodafone-Idea combined entity would have 43 per cent revenue market share as against the 33 per cent of Bharti Airtel currently and 13 per cent for Reliance Jio by 2018-19, a CLSA report had said.

Vodafone did not share the details of the potential deal, saying, "there is no certainty that any transaction will be agreed, nor as to the terms or timing of any transaction".

While Bharti Airtel is the largest telecom operator in India with 263.35 million mobile subscribers, Vodafone has 202.79 million users and Idea Cellular 187.68 million.

With 32.84 per cent, Bharti Airtel has the maximum market share, but the combined entity of Vodafone India and Idea will command 43 per cent, say analysts.

"Our analysis of a potential merger of Vodafone India with Idea Cellular reveals that such a mega deal would change the industry order," CLSA had said.