Vodafone India mulls merger post Reliance Jio arrival

Vodafone India is contemplating a potential merger with one of its telecom rivals in the Indian market in order to turnaround its subcontinent’s telecom business which has been bleeding ever since the arrival of deep-pocketed Jio.

According to British media reports, Vodafone Plc is keen to explore a merger option either with Idea Cellular, country’s third largest telecom player, or with Jio itself. However, merger with the latter may be a distant possibility as Reliance has already incurred massive expenditure in its telecom arm.

Jio’s aggressive posturing on tariff plans and massive investments have started impacting top telecom rivals with the new entrant extending its welcome offer for another quarter. This has impacted the revenues of rest of the players negatively and given rise to consolidation talks in the industry.

Indian telecom space has been overcrowded with telecom players. In fact, at one point, there were around seven major players operating in almost all the telecom circles. This overcrowding was taking a toll on the finances of all the players, and more so on the smaller players since they were unable to take the fight to market leaders.

At this point of time, it appears that consolidation may be the way forward in the industry, with around four major telecom operators emerging post consolidation.