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Vodafone, Idea merger may led to price war to retain customers

The biggest deal in the telecom sector, Vodafone-Idea merger to pace up with the rivals like Bharti Airtel and Reliance Jio will ultimately be beneficial at the customers end. After the deal comes into action, Vodafone-Idea Cellular will try their best to regain the subscribers by rolling out the cheaper plans.

Both the telcos have paid Rs 7,200 collectively to the Department of Telecommunication (DoT) under protest as “any further delay for according the approval of Vodafone-Idea license would permanently impair the merged entity”.

As the proceeding is going on, Idea cellular encounters rise of shares by 18% in BSE street on Tuesday and it closed at 7.3% at Rs 56.50.

People aware with the development of the deal said that the merged Vodafone-Idea entity is more focussed on the integration rather on the subscriber attention.

Amid of the deal, Vodafone India is planning to launch some fresh plans with the more data option to attract the new customers and retain the old ones.

According to Sanjay Kapoor, Bharti Airtel CEO, Sanjay Kapoor, “They (Vodafone-Idea) will have the option to play with headlines prices, data quantities, carry forward plan validities and one may see some reduction in already low effective price for the next few months from the new entity”.

As per the reports, Vodafone and idea have lost almost 14 circles out of 22 subscribers in May while Idea alone has lost 21, mainly in Maharashtra.

The main loss happened in the prepaid segment as Idea has more grip in the rural areas while in the urban areas, people choose post-paid plans more over the pre-paid.

The final approval from the Dot for Vodafone-Idea will be soon be confirmed in a few days. An Analysts said that the new merged entity will be aggressive with their prepaid plans.

Any further delay in the approval would directly impact 430 million customers and thus to the company who is already is in the debt of over Rs 1,25,000 crore.

 

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