Jio and Airtel having internal talks to swiftly absorb Vodafone-Idea users if it fails

According to recent reports, Reliance Jio Infocomm and Bharti Airtel have started internal consultations. These consultations are to discuss how both of the telecom giants can swiftly upgrade their plans and absorb Vodafone-Idea users in case it shuts down. Here are all the developments that have surfaced about the story so far:

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Jio and Airtel looking for internal resizing to absorb Vodafone-Idea users if the latter fails

If Vodafone-Idea shuts down, the users will ultimately flock to Reliance Jio Infocomm and Bharti Airtel. According to the reports, for this transition to take place, both Jio and Airtel will have to internally resize their network sizing. Another interesting fact is that the resizing can also happen without the purchase of additional spectrum. Vodafone-Idea has 304 million subscribers out of which 123 million are 4G users. If Vodafone-Idea winds up operations, its 4G users will be up for grabs by both Bharti Airtel and Reliance Jio Infocomm. However, the 2G and 3G users will only have the option to flock to BSNL, MTNL and Airtel as Jio is a 4G only telecom operator.

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According to analysts and experts, if Vodafone-Idea fails at any given point of time, Bharti Airtel will be the biggest beneficiary of the downfall. Analysts have mentioned how Bharti Airtel would be the biggest beneficiary if Vodafone-Idea goes into IBC (Insolvency or Bankruptcy Code). While reports of Vodafone-Idea’s bankruptcy are making rounds, a telecom operator has to give a 30-day notice to users about shutting down services, and a 60-day notice to Telecom Regulatory Authority of India (TRAI) so that they can inform users about MNP (Mobile Number Portability). According to the GoI estimates, Vodafone-Idea’s dues total about ₹ 50,000 crores, and it had cash reserves of ₹ 12,500 crores till December 2019 end.

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After the court hearing, Vodafone-Idea’s board decided to immediately pay ₹ 2,500 crores, and an additional ₹ 1,000 crores by the end of this week. After making these transactions, Vodafone-Idea will be left with ₹ 9,000 crores of cash. On February 15, 2020, Vodafone-Idea said that their ability to continue would be dependent on the positive outcome of the modification plea filed by them to the Supreme Court of India. The next court hearing on the matter is scheduled to take place on March 17, 2020.

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