Reasons For Vodafone Idea Merger

Some of the main reasons why Vodafone-Idea decided to merge their businesses are

1. The primary driver behind the Vodafone-Idea merger is to counter Reliance Jio's growing
dominance in the telecom sector. Jio promised free services for the first six months. As a
result, it began to monopolise the largest portion of the market.
2. The statements from both businesses stated that the synergy would be very cost-
effective. The expected annual savings would reach 14,000 crores. The cost savings
would come from reduced operational and capital expenses. 
Both businesses' EBITDA margins (earnings before interest, taxes, depreciation, and
amortisation) were around 30%. In comparison to Bharti Airtel and Reliance Jio
Infocomm Ltd., it was lower.
3. In comparison to Bharti Airtel and Reliance Jio's most recent arrival, the market share of
Vodafone India and Idea was quite small on an individual basis. Reliance Jio completely
revolutionised the telecom sector. 
The merged company was supposed to have 400 million subscribers, a 35% customer
market share, and a 40% revenue.
4. Individual spectrum holdings for Vodafone and Idea were 411 MHz and 316 MHz,
respectively. The spectrum holds of Bharti Airtel and Reliance Jio, on the other side,
were 860 MHz and 650 MHz, respectively. Thus, Vodafone and Idea were finding it
challenging to effectively compete in the sector on their own. 
It was anticipated that the merger of the companies would give the combined company a
hold of 728 Mhz, boosting the likelihood that it would rank either first or second in India.