The telecom battleground is all set to intensify with Idea and Vodafone announcing to merge their businesses in a deal that will create a telecom giant. The merged entity is valued at 8.3x on FY19E with an EV of INR1,779b Idea will issue shares at a swap ratio of 1:1 to Vodafone India shareholders. The deal will allow the merged company to command a leadership position in spectrum (with a 24% share) and broadband sites. This could lead us to revise up our revenue market share estimates (we have factored decline of 250-300bp for both the companies). The current sub-30% EBITDA margin could scale up to 36-39% over next 4-5 years, led by synergies and scale benefits. Furthermore, reducing...