Airtel on Vodafone, Idea merger: Consolidation should not be forced by unfair means

Airtel says forced consolidation is not only bad for the telecom sector, customers, employees, but will also adversely impact the overall investment climate


Airtel has challenged clean chit given by Trai for allowing Reliance Jio to provide free telecom services. Photo: Pradeep Gaur/Mint
Airtel has challenged clean chit given by Trai for allowing Reliance Jio to provide free telecom services. Photo: Pradeep Gaur/Mint

New Delhi: While welcoming the merger talks between Vodafone and Idea Cellular, Bharti Airtel in a veiled attack on telecom regulator said that consolidation should not be an outcome of a forced situation created by extending favours to a particular company.

“We welcome the news of the proposed alliance between Vodafone and Idea Cellular...However, it is important to ensure that such consolidations are not an outcome of a forced situation created by offering an ‘unfair playing field’ to any particular company while completely destroying the viability of the others,” Bharti Airtel (India and South Asia) MD and CEO Gopal Vittal said in a statement.

Britain’s Vodafone Group on Monday confirmed it is in discussion to merge its Indian unit with Idea Cellular in an all-share deal to create the country’s largest telecom operator with 43% revenue marketshare.

The combined entity will pose formidable competition to the current market leader Airtel and aggressive new entrant Reliance Jio.

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Vittal said that consolidation due to forced situation would be an unfavourable situation, which is not only bad for the sector, customers and the employees, but will also adversely impact the overall investment climate and above all revenues to government.

Airtel has challenged clean chit given by the Telecom Regulatory Authority of India (Trai) for allowing Reliance Jio to provide free telecom services.

In its 25-page petition before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), Airtel had asked the quasi-judicial body to direct Trai to ensure Reliance Jio does not provide its free voice and data plan beyond 3 December.

In the petition, Airtel had alleged that Trai in its decision dated 20 October “erroneously” concluded that since Reliance Jio’s promotional offer of free services was only valid till 3 December, it is consistent with the direction for 90 days. The case is scheduled for hearing at TDSAT on Wednesday.

On proposed merger of Vodafone and Idea , Vittal said that the consolidation is always good, especially for any capital intensive sector with multiple players. “A few solid and profitable players are always better for an industry, as they can make substantial investments and offer quality products and services to customers in a sustainable fashion,” Vittal said.

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