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

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-vodafone-merger-dot-approval

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.”

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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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Priyansh SinghKiran Fernandes | GoaGirish Gowda | BengaLuruKaushik IMAdragonmonk Recent comment authors
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Adil Wadia
Adil Wadia

I hope the consolidation of spectrum goes through in the merger, benefits are huge. Take Band 3 performance for example. Vodafone operates 4G with 5 MHz chunk in Bombay and Maharashtra circles, and that is an embarrassment. It works but speeds don’t cross 3 to 5 Mbps. Gujarat circle has 10 MHz chunk now and speeds and performance are consistent. That is why I am rooting for the merger, the spectrum Bank of the merger entity will be very beneficial to users. Imagine using 5 MHz chunk of band 8 for indoor coverage and 10 MHz for general coverage in… Read more »

Arun
Arun

Well said

Kiran Fernandes | Goa
Kiran Fernandes | Goa

It’s an embarrassment that Jio is using just 5MHz in band 3 and 5 in Goa. Speeds are horrible right now because of too many users, and Jio hasn’t bothered to do anything about it. In Bombay, it’s 10MHz and band 5 gives good speed in my building in Bandra where band 40 doesn’t reach. Ambani actually has other plans which I know not of. Maybe he might focus on getting WiFi towers, and using less resources for 4G… Coming to Vodafone Idea, They will have 10MHz almost everywhere which is a good thing for them. 10MHz coupled with 4×4… Read more »

Siddu
Siddu

Vodafone volte is now working in roaming …!!

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