Idea Cellular Shares Zoom 30% Amid Merger Talks With Vodafone
Global telecom giant Vodafone on Monday said it is in talks to merge its Indian operations with rival Idea Cellular to counter the fierce competition in the market. The news sent Idea shares rallying as much as 30 per cent today. In fact, Idea Cellular shares have rallied nearly 50 per cent since January 19, the day telecom operator announced that its board meeting scheduled for January 23 to consider third quarter earning has been postponed. This led to speculation over the merger talks.
Bombay Stock Exchange today sought clarification from Idea over the merger talks.
A merger of Vodafone and Idea Cellular would create India’s biggest telecom operator with over 38 crore subscribers, surpassing Bharti Airtel, which had 26.23 crore customers, as on October 31.
Bharti Airtel had 24.32 per cent of subscriber base while Vodafone with 20.19 crore subscribers had 18.7 per cent market share and Idea Cellular with 18.52 crore subscribers had 17.17 per cent share.
Competition in the Indian telecom has intensified after the entry of Reliance Jio in September, leading to a sharp cut in tariffs from other operators. Reliance Jio has extended its free voice and data call offer till March end. Jio has amassed over 7 crore subscribers in just four months of its launch.
Bharti Airtel reported its lowest profit in four years in December quarter as competition from Reliance Jio led to a brutal price war, impacting the revenues of Inda’s biggest telecom operator.