Idea-Vodafone merger and Jio - couldn't be a better time for the Indian mobile internet consumer
It's been a season of mega-mergers.
On the one hand, Idea Cellular and Vodafone India on Monday (March 20) announced a merger to form the country's biggest telecom company. On the other, we have Reliance Communications and the merger of its wireless operations, a deal which will have combined assets worth Rs 65,000 crore.
Vodafone, according to reports, will hold 45 per cent stakes in the new company, while Idea Cellular will have a command of more than 26 per cent stakes. Vodafone and Idea (presently number two and three in the market) will become the numero uno player in the Indian telecom market, pushing Bharti Airtel, the market leader right now, to the second position.
But what do these mergers mean for the consumers?
The common man who normally does not seem to care much about the shareholdings of corporate giants should be pleased with these developments.
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| Photo: Indiatoday.in |
The Idea-Vodafone merger comes with curious timing. Ever since the entry of Reliance Jio, the Indian telecom sector has been in a kind of tussle. Jio’s predatory strategies and pricing has led to a lot of uncertainty in the key players. This confusion and a knee-jerk reaction has triggered a price war that is causing a bloodbath in the telecom sphere.
All telecos have been slashing prices and trying to win back, or consolidate their customer base, post Jio's freebie-heavy market strategy. This merger too can be analysed in this context. The cut-throat competition set by Mukesh Ambani has perhaps led to this merger (that’s a small step away from cartelisation. After all, there are only a handful of key players in the industry).
According to an analysis in Firstpost, Reliance Jio, unlike Anil Ambani-led Reliance Communications, is a late entrant into the game and simply jumped over the 2G era, to run with the ball in the 4G data-driven mobile Internet revolution. And this new era is a new game altogether, where this new player is well on its way towards making the rule.
Already, both Vodafone and Idea have slashed their prices to offer better adat services to its customers. Additionally, these telcos are likely to make the plans more attractive post the merger with more capital, and a cut-down on a lot of redundancies. The merger will will also lead to a sharing of spectrum and towers which will lead to a decrease in costs. This would surely lead to better, more competitive offers from the company's end.
The Vodafone-Idea merger will also lead to pooling of infrastructure, which will inevitably lead to better service quality and customer experience.
Additionally, competitiveness in the market will lead to the ushering of newer, better technology in the market. Already the key telecom players are fighting to be the first one to bring in 5G technology to India.
The future of mobile data in India could not be brighter right now.