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Airtel acquires rival Telenor India to take on Reliance Jio
Last month, we reported that Vodafone is in talks with the Aditya Birla Group regarding the possible merger of Vodafone India and Idea. Now, Bharti Airtel has confirmed it would acquire its rival, Telenor India. The deal isn’t official yet, as it has to get regulatory approvals first, but should be completed within the next twelve months.
Airtel is the largest operator in the country with around 269 million subscribers and a revenue market share of 33 percent. The company will now get even larger, as its recent acquisition will add 44 million new subscribers.
However, Airtel won’t be the top dog in India for much longer if Vodafone and Idea decide to merge. Vodafone is currently the second largest operator in India with around 200 million subscribers, while Idea comes in third with around 177 million subscribers. The merger of the two companies would create the biggest mobile operator in the country with almost 400 million customers and a 44 percent market share.
Airtel decided to acquire Telenor India for the same reason Vodafone and Idea want to join forces. All of these companies have to make some changes in order to compete with Reliance Jio, which is funded by the country’s richest man, Mukesh Ambani. The company is currently offering its services to customers for free until the end of March — including 1 GB of 4G LTE data per day.
Reliance Jio’s strategy is to get as many users as possible in a short period of time and then offer them cheaper subscription plans once the free period ends. It looks like the strategy is working very well. Reliance Jio managed to get 100 million subscribers on board in just 170 days.
But the real test for the company is yet to come. It will be interesting to see how many subscribers will decide to stick around after the free period ends and opt for the new subscription plan that costs Rs. 303 a month.