Vodafone has recently confirmed that it’s in talks with the Aditya Birla Group regarding the possible merger of Vodafone India and Idea. Vodafone is currently the second largest mobile operator in India followed by Idea in third place. The merger would create the biggest mobile operator in the country with almost 400 million customers and a 44 percent market share.

The merger does make sense for both companies, as they are facing increased competition from Reliance Jio. Reliance is owned by India’s richest man, Mukesh Ambani, and is currently offering its service to customers for free until the end of March — including 1 GB of 4G LTE data per day.

The strategy is to get as many subscribers on board in a short period of time, and offer them cheaper services than other mobile operators after the free period ends. It looks like the strategy is working. In only four months, Reliance Jio has reached 72 million subscribers. And the number just keeps on rising, as 600,000 users are reportedly signing up each day.

Vodafone wants to make it clear that the two companies are currently only discussing the possibility of a merger. A deal has not been made yet and might not happen at all. But if it will, we’ll probably hear about it quite soon.

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