Mumbai: The news reports about possible merger of Idea and Vodafone are creating waves in the markets. However, Idea Cellular, country’s third largest mobile phone carrier, on Tuesday strongly denied such merger news. Idea Cellular has strongly ruled out the merger talks with rival Vodafone India, country’s second largest operator.

A spokeswoman at Aditya Birla, Idea’s parent group, has ruled out merger talks between Idea and Vodafone saying “these are baseless and absolutely false. This is absolutely untrue and preposterous. There is no such intent.”

Telecom industry analysts say that Idea and Vodafone are struggling with their data revenue market share. This is going to witness further pressure once the Reliance Jio kicks off its mega 4G services across the country.

After the merger news spread in the markets, Idea’s stock closed 6.9 percent higher on Tuesday after a TV channel said the two sides were in talks, citing unnamed sources.

On the other side, a spokesman at Vodafone India and the local arm of Britain’s Vodafone Group Plc, declined to comment on the report.

India is the world’s second-biggest mobile phone market by mobile phone subscriptions, after China. But, high competition in the crowded market has kept profits under pressure. Adding more to the competition, Reliance Jio, a telecom venture backed by India’s richest man Mukesh Ambani, is set to launch commercial operations soon. Reliance Jio has already started offering free talktime for three months with unlimited data for the period.

Telecom industry analysts say that Idea and Vodafone are struggling with their data revenue market share. This is going to witness further pressure once the Reliance Jio kicks off its mega 4G services across the country.

Any such deal would also face tough regulatory scrutiny and analysts say approvals may not be that easy to get from the regulators. Vodafone and Idea Cellular would breach the 50 percent revenue market share limit in many regions of the country if they try to merge. So it’s unlikely and may not happen considering the current situation, observes an analyst. Regulatory hurdles and spectrum sharing deals could also pose major hurdles for the merger, they said.