Why it matters to you
As the battle for technological dominance heats up in India, two cellphone providers are merging in order to combine their competitive energy.
To beat the rest of them, join forces with one of them. That seems to be the mentality of Vodafone, which has just merged with rival cellphone service provider Idea Cellular in India to create what is now the single biggest network in the country. By combining forces, the new telecom giant will boast a subscriber base of almost 400 million people, claim 41 percent of revenue market share, and have 35 percent of customer market share.
The move was seemingly spurred by another major player in the cellphone provider space — Reliance Jio, an inexpensive 4G network (which recently partnered with Google to bring the Indian market an affordable 4G-enabled smartphone). Reliance Jio claims to have the cheapest mobile data in the world, and this claim has garnered Jio quite the user base — already, it has hit 100 million customers despite being founded only seven years ago.
More: Google and Jio are said to be working together on a cheap 4G phone for India
But now, Vodafone and Idea Cellular seem to believe that they’ve found a way to stop Jio from encroaching on their own numbers. Kumar Mangalam Birla, the owner of Idea Cellular and the chairman of Aditya Birla Group, said in a statement, “This landmark combination will enable the Aditya Birla Group to create a high quality digital infrastructure that will transition the Indian population toward a digital lifestyle and make the Government’s Digital India vision a reality.”
Vodafone Group Chief Executive Vittorio Colao echoed these sentiments, noting, “The combined company will have the scale required to ensure sustainable consumer choice in a competitive market and to expand new technologies – such as mobile money services – that have the potential to transform daily life for every Indian. We look forward to working with the Aditya Birla Group to create value for all stakeholders.”
The historic deal is expected to be completed within two years, which means that by 2018, a plurality of Indian customers will be getting their mobile services provided by one very large company.