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November 2018
5:41 AM IST
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Preparing for Australia tour by watching videos: Shami        India invites Swedish companies to explore investment opportunities        Govt cancels ED officer Rajeshwar Singh's leave        175 dead, over 10,000 affected by Nigeria cholera outbreak        Lankan parties move SC against Parliament dissolution by Prez Sirisena        Delhi pollution: Task forces conducts meetings on WhatsApp for urgent decisions        PM slams Rahul, Sonia for questioning note ban; need no certificate from those on bail        70 per cent turnout in first phase of Chhattisgarh polls: EC        Union Minister Upendra Kushwaha attacks NDA ally Nitish Kumar amid reports of RLSP MLA joining JD(U)        Mining Baron Janardhana Reddy Remanded in Custody Till November 24 for 'Shielding' Ponzi Scam Accused Father-Son        Death toll hits 25 from wildfires at both ends of California        "Nationalism Betrayal Of Patriotism": Emmanuel Macron, Trump By His Side        3rd T20: Dhawan, Pant take Ind to victory, series win        FC Goa beat Kerala Blasters 3-1 in ISL        One killed, several injured in stabbing attack in Melbourne: Police        Journalists beware: After Bloomberg bots, AI news presenter debuts in China        Harmanpreet Kaur’s record century headlines India’s big win over NZ in opener        Mumbai City end NorthEast United’s unbeaten run        Chelsea beat BATE 1-0 in Europa League        Srikanth enters pre-quarterfinals of China Open        
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Business News
DoT clears Idea-Vodafone merger with conditions
 
New Delhi, Jul 9 (PTI) The telecom ministry (DoT) today granted conditional approval to the long-pending merger of Vodafone India and Idea Cellular that will create the country's largest mobile services operator, an official source said.

"DoT has cleared the Vodafone-Idea merger today. They will have to meet conditions for final approval, the source told PTI.

The department has asked for a payment of Rs 3,926 crore in cash pertaining to one-time spectrum charge of Vodafone. The amount can be paid either by Idea or Vodafone. The DoT has also asked Idea Cellular to furnish a combined bank guarantee of Rs 3,342 crore, the source further said.

The combined operations of Idea and Vodafone will create the country's largest telecom operator worth over USD 23 billion (or over Rs 1.5 lakh crore), with a 35 per cent market share and a subscriber base of around 430 million.



The merger is expected to give breather to both debt-ridden firms Idea and Vodafone, from cut-throat competition in the market where margins have hit rock bottom with free voice calls.

It will have the capacity to provide 4G spectrum in all telecom circles of the country. According to a presentation by Idea, the combined 4G spectrum of both the companies are capable of offering up to 450 megabit per second broadband speed on mobile phones in 12 Indian markets.

With the new entity coming in force, Bharti Airtel will lose the tag of India's biggest telecom service provider to the new entity which is proposed to be called as Vodafone Idea Limited.



The combined debt of both the companies is estimated to be around Rs 1.15 lakh crore.

Vodafone will own 45.1 stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group would have 26 per cent and Idea shareholders 28.9 per cent.

The Aditya Birla Group has the right to acquire up to a 9.5 per cent additional stake from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time

If Vodafone and the Aditya Birla Group's shareholdings in the combined company are not equal after four years, Vodafone will sell down shares in the combined company to equalise its shareholding to that of the Aditya Birla Group over the following five-year period.

Until equalisation is achieved, the voting rights of the additional shares held by Vodafone will be restricted and votes will be exercised jointly under the terms of the shareholders' agreement.

Birla is proposed to be the non-executive chairman of the merged entity and Balesh Sharma new CEO. Idea's chief financial officer Akshaya Moondra will head the financial operations of the new entity as its CFO. Ambrish Jain, currently the deputy MD at Idea Cellular, is set to become the new chief operating officer.

Vodafone Idea Ltd will hold 1,850 MHz of spectrum, which included 1,645 MHz of liberalised spectrum acquired through auctions.

It will be capable of building substantial mobile data capacity, utilising the largest broadband spectrum portfolio with 34 blocks of 3G spectrum and 129 blocks 4G carriers across the country.

The amalgamation will also result in capex synergies, since it will eliminate the duplication of spectrum capacity and infrastructure related requirements.

Idea and Vodafone are separately paying rental for 6,300 mobile sites which will be synced for merged entity in two years.


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