Why Vodafone, Idea merger may be bad news for their customers

The mega merger between telecom firms Vodafone India and Idea Cellular may be good news for the sector, but for customers, it could also mean network issues, if at least one expert is to go by.

According to an article in the Economic Times, a Bank of America-Merrill Lynch report says that if the two companies look to cut down the number of sites post merger, the combined entity will risk deteriorating network coverage as the number of consumers and data coverage will also increase alongside the merger.

The two firms together have more than 40 crore customers and 2.73 lakh sites.

Vodafone and Idea are likely to cut infrastructure in circles where there is overlap in order to save energy and cost. Combined sites can be cut by more than 20 percent after the deal comes to force, according to experts.

However, Vodafone India is confident that the rationalisation will not hamper the network coverage. The company said, “We are not rationalising any network before the merger. Post-merger, too, our combined network will have more capacity and more coverage as we will have the most spectrum for any entity as well as the most number of sites.”

The merger is expected to close by September 2018.

Ericsson, Nokia and Huawei will be involved in integrating the process and will be the network gear suppliers to both firms.

Nokia told the ET that the rationalisation will have “negligible impact” on consumer experience.