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How Vodafone, Idea merger will affect its consumers

Danny D'Cruze     August 31, 2018

Vodafone India and Idea Cellular are now Vodafone Idea Limited. With the new company taking the top spot in the Indian telecom industry and dethroning Bharti Airtel for the first time in 15 years, the benefits are expected to seep down to the customers as well. For now, both companies will continue with their individual brands on the public front. For tasks like mobile phone recharge and payment of phone bills, the customer won't witness a major change. Vodafone and Idea websites are still functioning on their old domain. However, the merged capital and increased reach may result in more benefits to users than before.

Welcoming customers to India's leading telecom network, Mr. Balesh Sharma, CEO, Vodafone Idea Limited, said, "As India's leading telecom operator with two popular and loved brands, the company has the scale and resources to ensure sustainable customer choice and introduce new technologies. We are committed to offer both our retail and enterprise customers an excellent experience while fulfilling their evolving digital and connectivity needs via new products, services and solutions. We will offer them more network coverage, more value and more excitement. My team and I look forward to your continuing support and invite you to enjoy the Vodafone Idea experience."

Better network

One of the greatest strengths of the merged entity will be a more robust ecosystem of cellular towers. This could yield better coverage than before. The company claims that it is now the largest voice network with over 200,000 unique GSM sites and has 235,000 kms of fibre to cover over 1.2 billion Indians (92% population). Other than that, the new entity will have a large spectrum portfolio and more broadband carriers to provide better service on 2G, 3G and 4G platforms. In the upcoming broadband tariff war, Vodafone Idea will be ready with their consolidated network of over 340,000 broadband sites covering 840 million Indians.

New technology

The merged entity will have a better hold on digital services which includes Voice, Data, Mobile payments, IoT, advanced enterprise offerings, high speed and secure leased lines, digital wallets, MIMO and cloud services. These services can be accessed via 15,000 stores and 1.7 million retail touchpoints.

Competitive offers

The factor that impacts the end user the most is the price. Vodafone Idea Ltd. will now be better positioned to counter Reliance Jio's aggressive pricing. The company will have a Pan India Revenue Market Share (AGR) of 32.2 per cent which not only puts it on top of the list but also leaves some breathing space for it to introduce new offers.

Idea will infuse Rs 67.5 billion with Vodafone's Rs 86 billion. Additionally, the monetisation of standalone towers of both companies will yield a value of Rs 78.5 billion. This provides the company with a strong cash balance of over Rs 193 billion (after deducting the payout amount of Rs 39 billion to the DoT).

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