Bharti Airtel welcomed the move of Vodafone, who is planning to merge its India mobile business with Aditya Birla group firm. While welcoming, Airtel also mentioned that consolidation should not be an outcome of a forced situation which was pointing directly towards the new entrant in the market – Jio.
“We welcome the news of the proposed alliance between Vodafone and Idea Cellular, however, it is important to ensure that such consolidations are not an outcome of a forced situation created by offering an ‘unfair playing field’ to any particular company while completely destroying the viability of the others,” Bharti Airtel MD and CEO Gopal Vittal mentioned.
Britain’s Vodafone Group on Monday confirmed it is in discussion to merge its Indian unit with Idea Cellular in an all-share deal to create the country’s largest telecom operator with 43 per cent revenue market share. The new merger plan will definitely give a tough time to the current market leader Airtel as well as to the quick market grabber Reliance Jio. The merger will create an entity with a subscriber base of more than 400 million to emerge as the largest player in India, while the current dominant player Airtel currently has over 260 million users on its network.
Vittal said that consolidation due to forced situation would be an unfavourable situation, which is not only bad for the sector, customers and the employees, but will also adversely impact the overall investment climate and above all revenues to government.
On proposed merger of Vodafone and Idea, Vittal said that the consolidation is always good, especially for any capital intensive sector with multiple players. He also noted that a few solid and profitable players are always better for an industry, as they can make substantial investments and offer quality products and services to customers in a sustainable fashion.