The Competition Commission of India (CCI) has given unconditional clearance to the proposed merger between Vodafone India and Idea Cellular. Vodafone and Idea are the second- and third-largest mobile network operators in India; the merger will lead to a combined subscriber base of 400 million customers. Frontier advised Vodafone India during the merger process.
The CCI concluded that the proposed merger was not likely to have an appreciable adverse effect on competition in India, primarily because of the significant constraint from consumer switching and churn. The CCI also found that the resulting “buyer power” stemmed from near zero switching costs, which were facilitated by:
- “Multi-SIMing”: Approximately two-thirds of customers tend to have multiple SIMs, which means that they are able to switch between mobile operators easily in the event of a price rise.
- Mobile Number Portability (MNP) regulations: Subscribers are able to switch their primary SIM/service provider with minimal or no charge and without any significant time or effort, while retaining their existing mobile telephone number.
The CCI also found that post-merger, there would still be at least five mobile network operators in all regional sub-markets. Having examined the size and resources of these competitors, the CCI determined that they would be in a position to exercise adequate competitive constraints.
The decision is available on the CCI’s website.
Frontier advises international Telecommunication providers and other companies in regulated industries on competition cases.
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