HHI - 

Herfindahl-Hirschman index

Companies  M.S.% (MS%)^2

Jio 20 400

Airtel 30 900

Vodafone 20 400

Idea 20 400

BSNL 10 100

2200

 *Post-Merger Market share

% 2019 % 2020 % 2021

Jio 28 784 34 1156 37 1369

Airtel 28 784 28 784 30 900

Vi 34 1156 27 729 23 529

BSNL 10 100 11 121 10 100

2824 2790 2898

It was announced in March 2017 that Idea Cellular and Vodafone India would merge. The merger got
approval from the Department of Telecommunications in July 2018. On 30 August 2018, National
Company Law Tribunal gave the final nod to the Vodafone-Idea merger[ The merger was completed on
31 August 2018, and the newly merged entity was named Vodafone Idea Limited. The merger created the
largest telecom company in India by subscribers and by revenue. Under the terms of the deal, the
Vodafone Group holds a 45.2% stake in the combined entity, the Aditya Birla Group holds 26% and the
remaining shares will be held by the public, Vi lost a significant number of gross and active subscribers in
the month of August 2020 after the merger.

Until 7 September 2020, Vodafone Idea Limited operated two separate brands:

 Vodafone – a postpaid & Prepaid GSM service.

 Idea – a prepaid GSM service, similar to Vodafone Prepaid.

Vi also provides services including Mobile payments, IoT, enterprise offerings and entertainment,
accessible via both digital channels as well as on-ground touch points, centres across the country. Vi has a
broadband network of 340,000 sites, distribution reach of 1.7 million retail outlets

Out of 22 Telecom Circles in India, merged entity will have highest market share in 9 Circles and will
have more than 30% stake in 14 circles. This may be termed as Anti-Competitive but CCI has turned
down the same since in 10 out of 14 Circles as stated above, entity’s share appears to be close to that of
competitors

– Increase in HH Index
HH Index is used to measure competition in market. Lower the index is, better the competition. Pre-
Combination HH Index is exceeding 2000 in all circles (except in 3 circles where it is exceeding 1800).
Market in which HHI is in 1500-2500 range is assumed as moderately concentrated market.

A merger which will increase HHI by 200 is an indication of Anti-Competitive. Though this merger will
result in increase of HHI by 400 – 1500 in various circles, CCI has considered it as Anti-Competitive
considering competitor’s stake in such circles and factors as stated above

– Reduction in Number of Competitors

With increased HH Index, it becomes important to also assess the impact of reduction in number of
competitors on the competition. Parties have submitted details regarding number of competitors in 220
countries among globe stating that 213 countries are having four or less operators and 6 countries having
five operators & India is the only country having more than 5 operators and reduction on number of
competitors at this stage is not likely to have any adverse effect on competition.

After above analysis, CCI has concluded that merger of players in dominant position in industry always
cannot be termed as Anti-Competitive unless the same is evidenced by an Anti-Competitive objective of
excluding competition / competitors which does not seem to be the current scenario after considering
relevant market and competitors.