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Vodafone-Idea Merger Creates India's Largest Telco
- 1. 4/9/2019 1Vodafone - Idea Merger
- 2. CONTENTS • Introduction • Telecom industry in India • Major telecom networks in India • What is merger • Vodafone India • Idea cellular Ltd • Vodafone Idea Ltd • Positive and negative effects of merger • Challenges • Why merger • Benefits to customers • Current status • Conclusion 4/9/2019 2Vodafone - Idea Merger
- 3. INTRODUCTION • Vodafone India and idea cellular are now Vodafone idea limited • Top spot in the telecom industry • Both companies will continue with their individual brands on the public front • Merger entity will have a better hold on digital services 4/9/2019 3Vodafone - Idea Merger
- 4. TELECOM INDUSTRY IN INDIA • Made up of all telecommunication and internet service provider • Evolution of mobile communication and information today • World’s second largest telecommunication market • the liberal and reformed policies of GOI have been instrumental along with strong consumer demand in the rapid growth in telecom sector 4/9/2019 4Vodafone - Idea Merger
- 5. • Creating opportunity for new business • As of june 2018, overall tele density stood at 89% • Urban tele density stood at 158.16% and rural tele density at 57.99% • With daily incresment in subscribers base, there have been a lot of investments and development in the sector • India stands second in terms of total internet users 4/9/2019 5Vodafone - Idea Merger
- 6. Major Telecom Networks In India • BSNL • MTNL • Airtel • Reliance communication • Aircel • Vodafone • Idea Cellular • Reliance Jio • Telenor India 4/9/2019 6Vodafone - Idea Merger
- 7. 4/9/2019 7Vodafone - Idea Merger
- 8. What is Merger ? • A Merger is a corporate strategy of combining different companies into a single company • Combination involves - transfer of ownership, either to a stock swap or cash payment • In practice, both companies surrender their stock and issue new stock as a new company. 4/9/2019 8Vodafone - Idea Merger
- 9. Telecom Companies - their Market Shares and Revenue COMPANIES REVENUE (Bn) MARKET SHARE % AIRTEL 15 24.85 IDEA 5.5 15.23 VODAFONE 6.6 18.2 BSNL 5.1 11 RELIANCE COMMUNICATION 3.5 0.06 AIRCEL 1.5 1.5 TATA TELESERVICES 0.5 6 JIO 1.8 16.81 TELENOR 0.187 5.1 MTNL 0.788 0.5 Source: www.telecomlead.com :2018 Analysis4/9/2019 9Vodafone - Idea Merger
- 10. Vodafone India • Vodafone India was the Indian subsidiary of UK based Vodafone group • Head office in Mumbai • CEO - Sunil Sood • Ceased operations - 31 August 2018 • Second largest telecommunication operator in India 4/9/2019 10Vodafone - Idea Merger
- 11. Vodafone India Industry Telecommunication Revenue Rs. 42,956 crore Operating Income Rs. 11,784 crore Subscribers 208.52 million 4/9/2019 11Vodafone - Idea Merger
- 12. Idea • Idea cellular limited was an Indian mobile network operator owned by Aditya Birla Group • Headquarter was in Mumbai • Fourth largest telecommunication operator in India • CEO - Himanshu Kapania 4/9/2019 12Vodafone - Idea Merger
- 13. Idea Cellular Limited Industry Telecommunication Revenue Rs 35,475 crore Operating income Rs 10,291 crore Subscribers 200 million 4/9/2019 13Vodafone - Idea Merger
- 14. Vodafone Idea Limited • Vodafone India and Idea Cellular agreed to merge . • 31st AUG 2018- renamed as Vodafone Idea Ltd. • Kumar Mangalam Birla – Chairman Balesh Sharma -CEO • The merged entity will be jointly controlled by Vodafone and Aditya Birla group. • Vodafone Group - 45.1% stake Idea Group – 26% 4/9/2019 14Vodafone - Idea Merger
- 15. • The Birla group have the right to buy additional 9.5% stake from Vodafone • Board of combined entity will be comprised of 12 directors. • The merger of both the companies become the countries largest players. • Major competitors • Spread of 15000 branded stores and 1.7m retail touch points 4/9/2019 15Vodafone - Idea Merger
- 16. Positive and Negative Effects of Merger Positive • Greater stability and better network • Increase in market share • Highest holder of spectrum • Beneficial for government • More than 450 million subscribers • Reduce duplication • Promote foreign investment. 4/9/2019 16Vodafone - Idea Merger
- 17. Negative • Job loss • Effecting the vendors • Diseconomy of scale • Less choice • May turn out to be a monopoly 4/9/2019 17Vodafone - Idea Merger
- 18. Challenges • Catching up with the competition • Debt pay off • Raising of funds • Providing stable network 4/9/2019 18Vodafone - Idea Merger
- 19. Why merger ? • To tackle dominance created by Reliance Jio. • To become countries largest telecom operator. • To pare its debts. • To create a better mobile network provider. • To increase market share and revenue. 4/9/2019 19Vodafone - Idea Merger
- 20. Benefits to customers • Better network quality • New technology • Competitive offers 4/9/2019 20Vodafone - Idea Merger
- 21. Current Status • Vodafone idea ltd become the largest telecom operator in India. • Become the second largest telecom operator in the world. • CEO: Balesh Sharma • Vodafone :45.1% shares .Adhithya Birla group :26% • Market share of 35.61% with 418.745 million subscribers.. 4/9/2019 21Vodafone - Idea Merger
- 22. • Broadband network of 240,000sites with distribution to 1.7 million retail outlets • Operating income :7202.2cr($1.0billion) • Net income : 4950.5cr($690million) 4/9/2019 22Vodafone - Idea Merger
- 23. 4/9/2019 23Vodafone - Idea Merger
- 24. 4/9/2019 24Vodafone - Idea Merger
- 25. Conclusion • India became the World’s second largest telecommunication market. • This merger leads to more FDI in India • This merger helps to improve the overall development of the telecom industry 4/9/2019 25Vodafone - Idea Merger
- 26. References • www.businessstandard.com • www.youtube.com • www.timesofindia.com • www.gadgets.ndtv.com • www.wikipedia.com • www.telecomlead.com 4/9/2019 26Vodafone - Idea Merger