Vodafone India and Idea Cellular Group signed a merger deal on Monday morning.
Mobile network operators in India, including Bharti Airtel, have incurred losses following the entry of Reliance's Jio Infocomm that stirred the sector into turbulence. With Jio offering free voice calls, and extremely modest data prices, the competitors were forced to slash their rates, and saw losses in 2016.
Now, the UK based Vodafone's Indian subsidiary and its local rival Idea Cellular are set to form a coalition within 2 years, forming the largest telecom operator in India with a subscriber base close to 400 million customers. Vodafone will own 45% of the merged body, while Idea will own 26%, with the right to acquire more from Vodafone.
The board of directors at Idea have approved the amalgamation scheme, and will also hold the sole right to appoint the chairman of the group. The CEO and COO of the entity will require the compliance of both companies.