Ripples Advisory, Vodafone Idea may trigger price war to regain customers
The Vodafone India-Idea Cellular combine may roll out aggressive pricing plans to regain subscribers that the two telcos have been losing to rivals Reliance Jio and Bharti AirtelNSE -2.19 %, even as they paid up dues claimed by the government ‘under protest’ to expedite final clearance for the merger.
An idea, in a compliance letter to Department of Telecommunications (DoT) on behalf of both telcos, said over Rs 7,200 crore have been paid ‘under protest’ because “any further delay for according the approval of Vodafone licenses and Idea would permanently impair the merged entity”.
‘Under protest’ implies the combined telco, to be called Vodafone Idea, can challenge the dues demanded by the government in court at a later date.
The development helped Aditya Birla Group telco’s shares rise 18% intraday on the BSE on Tuesday. It closed 7.3% up at Rs 56.50.
Already well past its expected closing date of June 30, the two telcos have been losing subscriber and revenue market shares to rivals Jio and Airtel.
Vodafone Idea is likely to roll out fresh price plans with more data offers to retain their subscribers and attract new ones, and to counter poaching attempts by rivals who are hoping to strike when the combining entities are expected to be focused more on integration and less on subscriber retention, people familiar with the matter told ET.
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