Analysis of the Vodafone and Idea Merger in the Telecom Sector

This report presents an analysis of the 2017 merger between Vodafone India and Idea Cellular. It begins with background information on both companies, including their founding, market share, and revenue. The report then details the specifics of the merger, including its valuation and the context o...Read More

Running head: VODAFONE AND IDEA MERGER
VODAFONE AND IDEA MERGER
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1VODAFONE AND IDEA MERGER
Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1. Company background.....................................................................................................2
2.2. Merger details..................................................................................................................2
2.3. Outcomes of the merger..................................................................................................2
2.4. Future Prediction.............................................................................................................3
3. Conclusion..............................................................................................................................3
References:.................................................................................................................................4

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1. Introduction
This report is going to elaborate on presenting an analysis of the merger of Vodafone
India and Idea of 2017. It shall highlight the merger details, the outcomes of the merger as
well as the future predictions for the part of the companies as the result of this merger.
2. Discussion
2.1. Company background
Vodafone India is the second largest network in India in terms of its subscriber base.
It was founded in the year 1994 by Sunil Sood and is headquartered in Mumbai
(Suryagayathri and Krishnan 2018). It has a total market share of 18.42%. As of 2015, the
company earns a revenue of 425 billion rupees. On the other hand, Idea is also an Indian
mobile network company and is the third largest one after Airtel and Vodafone in terms of
subscriber base. It was founded in the year 1995 by Ghanshyam Das Birla and Aditya Vikram
Kuman Mangalam Birla. The company earns a total revenue of 354 bullion Indian Rupees
(Basu and Chandra 2015).
2.2. Merger details
Vodafone India and Idea merged on 20th March, 2017 and was valued around 23 billion
dollars (Satyanarayana, Rao and Naidu 2017). 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.
2.3. Outcomes of the merger
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% (Mishra and
Rao 2015). They then pooled the vital resources and infrastructure and lead to better

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customer experience and service quality. Furthermore, the entry of Reliance Jio upset this
merged companies by providing customers with free services.
2.4. Future Prediction
There is high chance of better and faster network in the upcoming future and also, of
much better customer services as well. With the same, both the companies collaboratively to
start working on better coverage like 5G and 6G.
3. Conclusion
Hence, from the above analysis it can be stated that the merger has brought in positive
changes for both the companies as well as the life of the customers. The companies were
running in profit but has faced severe problems with the 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.