Following Tough Competition From Reliance Jio, Vodafone Seeks Merger Partner For Indian Arm: Report

Facing intense competition from Mukesh Ambani-led Reliance Jio, the Vodafone Group’s Indian arm is mulling over a merger with one of the top telecom companies in India, The Telegraph reported.

The report said that the country's second largest telecom company is "weighing a potential merger of its Indian arm with rivals as it seeks a turnaround in the subcontinent’s cut-throat mobile market. Vodafone is now understood to be looking at the possibility of a tie-up with either Jio, or Idea, another of the top four providers. Jio and Idea could themselves combine, however,” the report read.

Jio has caused upheaval in the Indian market since its entry in September. Its highly competitive tariff plans have started impacting rivals. Smaller ones, such as Telenor India, will probably be acquired by bigger players. Bharti Airtel is also said to be in advanced talks to buy Telenor's India business.

On Vodafone’s merger with Jio, an industry expert quoted by Mint said: “It is very unlikely for Mukesh Ambani to go for merger with Vodafone India because it is not (in) his DNA to write large cheques. His strategy is different.” On a deal with Idea, the expert said: “With two decades of existence and almost a decade of being national operator, it is not too soon to expect merger for Vodafone and Idea.”

A Vodafone spokesperson, talking to Mint, refused to comment on the story. “We never comment on speculation (regarding merger)... Regarding the IPO, we have never given a timetable. We have said that we will launch an IPO as soon as the market conditions allow, although we do not expect this to be in the current financial year”, he said.