Britain’s Vodafone is joining with Idea Cellular in a deal worth the equivalent of 21.3 billion euros.
Together they will become India’s biggest telecoms business with almost 400 million customers, overtaking the market leader Bharti Airtel.
The new firm would have about 40 percent of revenue of the world’s second-biggest mobile phone services market by users after China.
Vodafone, which is the world’s second-largest mobile phone operator, will own 45.1 percent of the merged entity. This is the latest and biggest consolidation in India after the arrival last year of a new company sparked a brutal price war in the cutthroat market.
The newcomer, Reliance Jio Infocomm has been providing free services on its 4G mobile boradband network for months to establish a customer base.
That has forced India’s three biggest operators – Bharti, Vodafone and Idea – to slash prices and accept lower profits.
Bharti Airtel is in the process of buying Telenor’s India operations, while two smaller players controlled by Malaysia’s Maxis and Russia’s Sistema are merging their operations with Reliance Communications’ wireless unit , reports Times of India.
“Consolidation is a much anticipated and very welcome development in this beleaguered telecom sector,” said Arpita Pal Agarwal, a partner and telecom analyst at PwC India in the TOI report.