Vodafone has put a planned IPO of its business in India on hold after confirming that it is in talks with the Aditya Birla Group about a possible merger of the two companies’ operations.

The UK-based operator said discussions about an all-share merger of Vodafone India and Idea Cellular did not include its 42 percent stake in Indus Towers.

Should a deal be struck, Vodafone said it would deconsolidate its Indian opco by taking shares in Idea.

Vodafone India has over 200 million customers, while India Cellular’s subscriber base stands at 186.4 million.

In November, Vodafone said it planned to proceed with an IPO “as soon as market conditions allow” after it wrote down the value of its Indian business by €5 billion.

It did not give a reason for the change in tack.

Vodafone India, which has over 200 million customers, has been buffeted by increased competition.

Last November, Vodafone Group Vittorio Colao said: “Competition in India has increased in the year, reducing revenue growth and profitability.

“We have responded to this changing competitive environment by strengthening our data and voice commercial offers and by focusing our participation in the recent spectrum auction on acquiring frequencies in the more successful and profitable areas of the country.”

India Cellular is the third largest mobile operator in the country with a market share of 19 percent.

It generated revenues of 187 billion rupees (€2.6 billion) and EBITDA of 59 billion rupees (€812 million) in the three months to September 2016.

Vodafone India had revenues of €3 billion and EBITDA of €892 million over the same period.

Last October, Vodafone spent €2.7 billion on boosting its spectrum holding in India by 62 percent.

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