Vodafone said to consider merger for Indian unit

Vodafone is reportedly considering pursuing a merger of its Indian mobile business with a rival operator to help better compete in the intensively competitive market and survive the price war triggered by the entry of Reliance Jio Infocomm.

The operator is looking into a potential merger with either Jio or major rival Idea Cellular, sources told.

Vodafone has also put on hold plans to float Vodafone India on the Bombay Stock Exchange until the price war triggered by Jio’s entry is over, the sources said.

Reliance Jio launched a pan-India 4G network on September 5 last year, offering effectively unlimited data, voice and SMS services as an initial promotion. The operator recently extended this free services promotion until March 31.

This aggressive pricing strategy has helped the operator sign up over 58 million customers since launch – including 19.6 million in October, its first full month of operation – data from regulator Trai indicates.

Besides incentivizing major operators such as Vodafone to pursue consolidation, smaller operators including Telenor India and Tata DoCoMo have been offering themselves for sale to the incumbents in response to the destructive price war, the report adds.