Vodafone, Idea merger would be perfect match: Airtel's Mittal
21 January 2017
A merger of Vodafone India and Idea Cellular, the country's second and third-largest telecoms operators, would be a ''perfect match,'' Bharti Enterprises chairman Sunil Bharti Mittal said on Friday, responding to reports of such a possible alliance.
''It's a perfect match. If you look at it, the match is not bad. But you know I can't sit on the minds of Vittorio or Kumar. The strengths and weaknesses match very well. Rural-urban, structured portfolio ... makes for a good business case and I would support it,'' Mittal said at the 47thWorld Economic Forum Annual Meeting in Davos.
Vittorio Colao is chief executive officer of Vodafone Group. Kumar Mangalam Birla is chairman of Idea Cellular, part of Aditya Birla Group.
Mittal was responding to media reports that Vodafone is looking for an alliance with either Reliance Jio Infocomm or Idea. Brokerage CLSA said in a recent report that a deal with Idea would be the best bet for Vodafone India. The merger, if it happens, will complement their operational strengths and will pave the way for a listing of its business without going through an initial public offering.
While Idea is a listed entity, Vodafone India has been planning to sell shares in the country. Bharti Airtel, the No 1 telco in India, is also listed.
Mittal said Jio's entry has intensified competition and weeded out smaller companies. Earlier this week, Videocon Telecom said it would stop providing mobile phone services from 15 February. Telenor, too, is looking to exit.
''One effect of Jio has been that small operators are gone. I support consolidation. Wherever we have seen two-three operators with large markets, they have been profitable, they have been able to make large investments and give a lot of revenue to the government,'' Mittal said.
The Bharti chairman also confirmed acquisition talks with Norway-based Telenor for its India operations. ''In India, they have competed with us head-on. They created a lot of difficulties in six-seven circles with a value play.
''But I think it is in the interest of India to give a good exit to companies like Telenor rather than waste all the efforts,'' he said. ''I think they are talking to many people, not just us. So I don't know what the outcome would be.''