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Merger won’t give pricing power to new telecom giant

DNMUM385263 | 3/21/2017 | Author : Praveena Sharma | WC :570



New Delhi: The merger of UK-based Vodafone Plc’s Indian telecom operation and Aditya Birla group’s Idea Cellular will make the combined entity the largest telecom operator in terms of market, spectrum and revenue shares. However, this pole position will not afford it pricing power or the ability to dictate the average revenue per user (Arpu), say analysts.
Telecom experts believe benefits would accrue to the Vodafone-Idea combine mostly on the cost side, on the revenues front the merged telecom behemoth would still struggle in a stiffly competitive market.
“Benefits (of the merger) will purely be on the cost side. Revenue and Arpu will continue to be under pressure. The belief that they will be able to dictate Arpu wi
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