India's fresh mobile king: Merger to create network with 400M users

India's richest man on India's digital age

that will’s official: Vodafone is usually combining forces with one of its top rivals in India to create the country’s largest cell phone carrier.

The U.K. telecom company said Monday that will’s merging its Indian operations with those of local competitor Idea Cellular. The result will be a wireless operator with nearly 400 million customers — roughly 75 million more than the entire population of the U.S.

Vodafone (VOD) will own a stake of about 45% from the fresh business, which the companies are valuing at more than $23 billion, including debt. The U.K. firm will share control with Idea’s owner, the Aditya Birla Group.

Related: Apple is usually set to start creating iPhones in India

The deal, which follows months of talks, will give both companies a leg up in India’s cut-throat telecom market.

The entry of fresh player Reliance Jio last year — bankrolled by India’s richest man who offered six months of free 4G internet — set off a cost war that will left Vodafone, Idea as well as industry leader Bharti Airtel scrambling. Last November, Vodafone reported a $5 billion loss in India as a result.

vodafone idea india merger

Investors were unsure what to make of the Vodafone-Idea deal at first glance.

Idea’s stock fluctuated wildly in Mumbai on Monday, leaping 15% initially although then plunging into negative territory to trade down around 9% by early afternoon. Vodafone’s share cost in London was little changed in early trading.

Related: India is usually planning to give free WiFi to more than 1,000 villages

Monday’s deal will allow the U.K.-based firm to reduce its exposure to the troubled Indian business, that will said.

India still offers huge opportunities for telecom operators from the long term. that will has more than 300 million smartphone users, that has a further 900 million people still waiting to get internet access.

sy88pgw (fresh Delhi) First published March 20, 2017: 2:24 AM ET

India's fresh mobile king: Merger to create network with 400M users

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