Having announced their plans for a merger in March 2017, Vodafone and Idea Cellular will begin operations as a single operator from next week, Economic Times has reported. The combined entity will be called Vodafone Idea and will be the biggest network operator in India by number of subscribers.
The company will be focusing on cost cutting in order to attain profitability right from ‘Day Zero’ when it starts operations. Cost cutting measures will include rationalisation of distributors and network towers, reduction in advertising, hiring freeze and closure of redundant offices.
A source told Economic Times, maximum synergies will be derived from optimisation of network-related costs. Information technology integration and rationalisation of real estate are also expected to add to savings.
Vodafone and Idea had projected a cost savings of Rs 8400 crore when they announced their merger in March 2017 with financials of both the companies suffering before the announcement. When the merged company starts operating it will have 37 percent market share, over Rs 60,000 crore in revenue and Rs 1.25 lakh crore of debt.
The move represents the consolidation happening in the Indian telecom space since the entry of Reliance Jio as small players find it increasingly hard to compete with giants like Airtel and Jio.
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