The move is being made at a time when the Indian telecom paradigm is witnessing major price war since the launch of Reliance Jio Infocomm.
"Vodafone confirms that it is in discussions with the Aditya Birla Group about an all share merger of Vodafone India (excluding Vodafone's 42% stake in Indus Towers) and Idea," the company said in a statement on Monday.
"Any merger would be effected through the issue of new shares in Idea to Vodafone and would result in Vodafone deconsolidating Vodafone India," the company further said in a statement.
The Indian telecom sector witnessed a major announcement last year when Reliance Jio services were launched.
It offered free voice calls and cut-price data services to consumers until Dec 31, 2016, as part of the 'Jio welcome offer'.
The service has been extended till Mar 31.
The move forced other major telecom operators-Bharti Airtel, Vodafone and Idea- to reduce its prices.
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