DoT Likely to Grant Clearance to Idea-Vodafone Merger Tomorrow

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The Department of Telecommunications is likely to approve the Vodafone India and Idea Cellular merger on Monday, as per a new report. The newly formed entity which will be known as Vodafone Idea Ltd will be the biggest telco of the country. An official source from PTI said "DoT is expected to clear the Vodafone-Idea merger on Monday. The certificate will be handed to them.” The combined entity after the Vodafone-Idea merger will be even larger than the current telco leader Bharti Airtel. This newly formed company will be worth over $23 billion (or over Rs 1.5 lakh crore) and will boast of a 35% market share with a subscriber base being made by around 430 million users.


This merger has been expected to give relief to both the companies which are debt-ridden in this market of cutthroat competition. The combined debt of both the companies stands at a staggering amount of Rs 1.15 lakh crore.

An official source stated "The merger will be taken on-record after Idea furnishes required bank guarantee and gives undertaking of owning the liabilities of Vodafone India that may arise in future.”

As a prerequisite to the merger, the DoT is seeking a bank guarantee of Rs 2,100 crore on the lieu of one-time spectrum fee of Idea Cellular. The DoT will also likely take an undertaking asking that the resultant will clear dues pertaining to one-time spectrum fee and other sub-judice matter in accordance with the court's order. The one-year bank-guarantee of Vodafone India submitted for deferred spectrum payment will be replaced by Idea Cellular. Both the companies will have to give the undertaking of clearing dues which are sub-judice as per the decision of the courts.

Following the completion of the merger, the name of the combined entity will be changed to Vodafone Idea Ltd for which Idea Cellular is holding a general meeting on June 26. In the newly formed Vodafone Idea Ltd, the British telco Vodafone will hold a 45.1% stake in, while the Kumar Mangalam Birla-led Aditya Birla Group would hold 26% and Idea shareholders will hold 28.9%.

Birla is likely to hold the position of non-executive chairman of the merged entity while Balesh Sharma will be appointed as the new CEO.

Current chief financial officer of Idea Cellular, Akshaya Moondra will take the position of CFO to manage the financials of the combined entity. Ambrish Jain, who is presently the deputy MD at Idea Cellular will be the new chief operating officer.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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