20 Mar, 2017
Vodafone deal creates Indian mobile giant
UK telecoms giant Vodafone has merged its Indian business division with a local rival, Idea Cellular, to form the country's largest operator.
The combined entity would have almost 400 million customers, overtaking market leader Bharti Airtel to account for about 40% of revenue of the world's second-biggest mobile phone services market by users after China.
"We are very complementary," Vodafone Chief Executive Vittorio Colao told a news conference in Mumbai after the deal was announced.
"Idea is strong where Vodafone is weaker, Vodafone is strong where Idea is weaker”.
The announcement ends months of speculation over an impending deal.
Forecasters say the merger was to fend off competition from Reliance Jio, a new 4G mobile broadband operator.
Owned by the country's richest man, Mukesh Ambani, Jio has forced Vodafone India and Idea Cellular, together with current market leader Bharti Airtel, to cut prices.
Shares in Idea grew almost 4% in Mumbai following news of the deal.
India's leading mobile networks are embroiled in what economists have described as "a vicious price war", started by the arrival of Jio.
More than 10 telecom operators are battling it out to try and attract India's one billion mobile phone users.
That has forced firms to keep tariffs low - significantly impacting their profitability.
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