Vodafone and Idea Merger: Strategy, Outcomes, and Future in India

This case study examines the merger between Vodafone India and Idea Cellular, two of the largest mobile network companies in India. The merger, which took place on March 20, 2017, was valued at approximately $23 billion and aimed to create a stronger entity to compete in the changing telecom landscape, especially after the entry of Reliance Jio. The merged entity initially became the largest player in the Indian market with a 43% market share, surpassing Airtel. However, the introduction of free services by Reliance Jio posed significant challenges. The case study concludes that while the merger initially showed promise, the merged companies face ongoing challenges from Reliance Jio and must adapt to maintain competitiveness in the Indian telecom market. Desklib provides access to this case study along with numerous other solved assignments for students.

Idea and Vodafone
telecom merger in
India.
N a m e o f t h e S t u d e n t :
N a m e o f t h e U n i v e r s i t y :

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Background- Vodafone India
• Is the 2nd largest mobile network in India in terms of subscriber base
• Has a market share of 18.42%
• The company is headquartered in Mumbai
• The founder of the company is Sunil Sood
• It was founded in 1994
• It earns a revenue of 425 billion rupees as of 2015 (Suryagayathri and
Krishnan 2018)

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Background- Idea
• Is an Indian mobile network company
• Is headquartered in Mumbai
• Is the 3rd largest mobile network in India in terms of subscriber base
• Its founders are Ghanshyam Das Birla and Aditya Vikram Kuman
Mangalam Birla
• It is founded in the year 1995
• It earns a total revenue of 354 billion Indian Rupees (Basu and Chandra
2015).

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Merger Details
• Both the companies merged on 20th March,
2017
• It was valued around 23 billion dollars
• It came in the aftermath of the unprecedented
change that the India telecom landscape had
faced after the entry of Reliance Jio Infocomm
Limited (Jio) in the year 2016 (Satyanarayana,
Rao and Naidu 2017).

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Outcomes
• Both the companies gradually became the largest
players in the Indian market with a total market share
of 43%
• Airtel became the second with a market share of 33%
• Pooled the vital resources and infrastructure and lead
to better customer experience and service quality
• Reliance Jio entered into the market and upset this
merged companies by providing customers with free
services (Mishra and Rao 2015).

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Future predictions
• Chances of better and faster network
• Chances of better customer services
• Both the companies collaboratively to start working
on better coverage like 5G and 6G

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Conclusion
• India’s 2nd largest mobile technology company Vodafone merged with 3nd largest
Idea Cellular
• The merger took place on 20th March 2017
• The companies was running in profit after the merger but faced severe problems
with entry of Reliance Jio
• With Reliance Jio growing stronger with each passing day, these companies are to
face tough challenges in the roads ahead.
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References:
• Basu, S. and Chandra, V., 2015. Culture at the Crossroads: Value Orientations and
Their Renegotiation in Leading Family-Owned Indian Businesses. In Global Enterprise
Management(pp. 139-152). Palgrave Macmillan, New York.
• Mishra, A.K. and Rao, G., 2015. Analysing Anti-competitive Behaviour: The Case for
Indian Telecom Industry. Science, Technology and Society, 20(1), pp.21-43.
• Satyanarayana, D., Rao, K.S. and Naidu, S.K., 2017. The impact of Reliance Jio on
Indian mobile industry-A case study on mergers and acquisitions of idea–Vodafone
and Airtel–Telenor. IJAR, 3(3), pp.209-12.
• Suryagayathri, C.K. and Krishnan, J.S., 2018. A Study on the Evolution of Distribution
channels of Telecom Industry in India. International Journal of Pure and Applied
Mathematics, 119(16), pp.1393-1401.

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