Airtel set to take on merged Idea, Vodafone with new schemes
17 Feb 2017
Bharti Airtel is planning to tap customers of a merged Vodafone and Idea Cellular through a slew of innovative schemes and tariff plans in at least six circles where the merged entity will exceed the 50 per cent subscriber and revenue market limit and will have to cede share to rivals telcos to secure regulatory approval, Mint reported.
The report added that India's leading telecom operator "would also want the proposed merger to be delayed as long as possible so that it gets room to bridge the gap with the combined entity".
An operator can hold a maximum of 50 per cent revenue share, 50 per cent subscriber share and 50 per cent spectrum share in each band (excluding 800 Mhz) in each circle, according to Trai regulations.
Revenue of the Vodafone-Idea combined entity will exceed 50 per cent share in circles such as Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra and Uttar Pradesh (West). These six circles together constitute 41 per cent of the combined revenues, the report added.
The UK's Vodafone Group and the Aditya Birla Group entity are in talks to merge Vodafone India and Idea in an all-share transaction, in their bid to forge a stronger front to combat Jio, which is owned by India's richest man, Mukesh Ambani.
The proposed merger will create an entity with combined revenue of Rs78,000 crore.
The merged entity, Credit Suisse said, would command a 26 per cent spectrum market share and relegate Bharti Airtel to second place on this score. At present, Sunil Mittal-led Bharti Airtel leads the industry in terms of spectrum holding with a 21 per cent market share, with Jio at second spot with 17 per cent.
India Ratings on Thursday said that the proposed merger will be positive for the telecom industry by eliminating duplication of spectrum and infrastructure capex. It added that consolidation in the industry will help a quicker return of pricing power.