Idea Cellular and Vodafone India Secures Merger Approval from DoT On Conditional Basis

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The mega-merger of Vodafone India and Idea Cellular has finally received approval from the Department of Telecommunications (DoT), although conditionally. DoT, which was earlier said to be seeking bank guarantee from Vodafone India has asked the merged entity to deposit an amount of Rs 3,911 crores and also asked to submit a bank guarantee of Rs 2,153 crores for the merger. Earlier, the merger approval from DoT was said to be secured by the end of June, but the DoT delayed the merger seeking bank guarantees from Vodafone because of the outstanding payments from the UK-based telecom service provider. Vodafone's merger of its six subsidiaries during the period of 2014-15 also led to the delay in approval, according to various reports in the past. The Rs 3,911 crore has been asked towards the differential payment for spectrum.


Idea Cellular has already confirmed the name of the merged entity as Vodafone Idea Limited. Very recently, telecom minister Manoj Sinha has revealed the merger has no objections from the Ministry of Telecommunications or the DoT, but the department was looking to settle down the outstanding payments from Vodafone India. For the uninitiated, Vodafone has an outstanding settlement of Rs 8,100 crores, out of which, the telco has cleared just Rs 2,450 crores. Now the merged entity has to deposit a sum of Rs 3,911 crores along with a bank guarantee for Rs 2,151 crore, which takes the total amount to Rs 6,062 crores. It's also said that DoT was planning to raise Rs 4,700 crore demand for one-time spectrum charges (OTSC). DoT was initially seeking for Rs 2,100 crore bank guarantee from the merged entity.

Manoj Sinha recently stated that “DoT has set rules for merger and acquisition. Idea Vodafone merger will be cleared without a single second delay once DoT completes all statutory formalities.”


As you might be aware of, the Vodafone Idea Limited entity will have over 430 million subscribers along with 41% of revenue market share. The entity will be starting its operations with annual revenue of Rs 63,000 crore.

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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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