Evident that Vodafone-Idea merger did not work, says Sunil Mittal

Bharti Airtel Ltd chief Sunil Bharti Mittal on Thursday said merger of telecom operators Vodafone India Ltd with Idea Cellular Ltd "did not work" and pinned it on different cultures of the two companies.

Speaking at the CII Business Summit 2022, Mittal said, "Had said this will not work because you have two very very different cultures being put together and...that is what precisely happened in the company."

According to Mittal, Vodafone India had an open culture like that of a multinational company and on the other hand Aditya Birla Group's Idea Cellular was honed into strong financial result orientation. Therefore, coming together of different cultures did not bode well, he said.

Vodafone India and Idea Cellular announced their merger in 2017, which, after getting required regulatory approvals, saw completion in 2018. Post the merger, the company was named Vodafone Idea Ltd. The companies decided to merge their operations following Reliance

Jio Infocomm Ltd's entry, which disrupted the telecom market with free data and voice services.

"Idea on its own used to work significantly better in terms of profitability, allocation of capital and return of capital," Mittal said, adding the company sometimes amazed Bharti Airtel owing to better performance.

Hinting at the disruption caused by Reliance Jio in 2016, Mittal said the year was "big and brutal" and Bharti Airtel got every hit.

The telecom sector was further affected badly by the Supreme Court judgement in the adjusted gross revenue dues case in 2019 that heaped extra liabilities on the sector.