Respite to Vodafone Idea as Bharti Infratel-Indus Towers Merger Approved by DoT

The approval comes just days after Vodafone Idea chief Kumar Birla met top government officials seeking relief for the ongoing AGR troubles

By February 24th, 2020 AT 9:20 AM
Highlights
  • Vodafone Idea gets a slight relief as DoT reportedly approved Bharti Infratel-Indus Towers merger
  • The merger is expected to complete in the next couple of weeks
  • Initially, the merger was announced way back in August 2018

The Department of Telecommunications (DoT) has reportedly cleared Bharti Infratel’s mega-merger deal with Indus Towers, offering much-needed respite for Vodafone Idea Limited. The companies received the critical Foreign Direct Investment nod from the telecom department, paving way for the creation of one of the largest towers companies in the world. “The final FDI enhancement approval required for Indus-Infratel merger has come. This is a big positive for the Vodafone-Idea,” an insider told LiveMint. The deal announced way back in April 2018 was delayed for several months pending the DoT approval.

vodafone-idea-bharti-infratel-dot

Infratel-Indus Merger Will Financially Help Vodafone Idea

The approval comes just days after Vodafone Idea chief Kumar Birla met top government officials seeking relief for the ongoing AGR troubles. Birla had met Telecom chief secretary Anshu Prakash on Tuesday and then met Finance Minister Nirmala Sitharaman the following day.

With the merger done, Vodafone Idea now plans to monetise its tower assets in the company. Bharti Infratel and Vodafone hold 42% stake each in Indus Towers, while Vodafone Idea holds 11.15% stake in the firm. The deal will fetch Vodafone Idea Rs 4,500 crore according to insiders who say that the company is expected to use to pay its AGR dues. The company owes the government Rs 56,709.49 crore in Adjusted Gross Revenue (AGR) as per DoT estimates.
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“The merger should come through in a couple of weeks now. Vodafone Idea has an 11.15% stake in Indus Towers, which it plans to monetise after the tower merger. This stake sale could fetch Vodafone Idea about Rs 4,500 crore,” said the insider.

Vodafone Idea Struggling to Pay AGR Dues

Vodafone Idea has so far paid Rs 3,500 crore to the government last week after the government threatened to invoke bank guarantees of the telecom companies for not paying up their dues. The telco was among the worst hit in the industry after a series of Supreme Court judgements failed to offer respite to the telecom companies.

The merger of Infratel and Indus will create the world’s second-largest tower company with the combined entity to own more than 163,000 towers, second only to China Tower. Under the proposed merger Bharti Infratel and Vodafone UK are expected to hold 37.2% and 29.4%, respectively, in the merged towers entity.

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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Tamil

I want only two operators in future 1 ) Jio 2) bsnl

SACHIN

instead of Vil airtel Must close..or jio beat thm such a way that they must sold there buisness to jio…Airtel is Monopoly King 1st he buy uninor loop mobile tata teleservice videocon..Har baap ka ek baap hota hai use jio kehte hai airtel beta… his netwrk is very very poor indoor all mumbai cries abt indoor 3rd class cvrge..anyone knw who buy etisalt??if airtl or other ??

karthik

Airtel is Poison , JIO is Alcohol , Vodafone Idea is a smoking cigarette and BSNL is White Sugar. Every thing is worse. But on which concentration matters here as a consumer. Even by price also those products are selling matches here A market with JIO and Airtel will be worse to consumer . I want VIL to survive only for the survival of Telecom Industry not for its masters who owned it. To know more check the history of Airtel Growth from 2005 to 2015 , you will come come to know why i mentioned it as poison.

SACHIN

yes u r right…same i m too thinking…

Saket

Ur view and saying for each company is correct. jio is alcohol, thus reaching 50% market share.

But survival of VIL in near term is good for industry

In long term say 2-5 years. All 4 and even newer MVNO will eat more than 300/month from average user.

karthik

Even those who support Airtel has to verify the back ground of COAI and its director general . How he is related to Airtel and hidden secret behind consolidation of telecom companies. Some Telecom insider has the view(Need to verify) that COAI plays major part in forcing IDEA to merge with Vodafone(Even IDEA have plans to quit telecom , but they are forced to merge). Its easy to face an enemy(JIO) who is opposing you , But its not easy to find a enemy who betrays in name of a friend(Airtel). That’s why i strongly mention Airtel as poison. May… Read more »

SACHIN

yes they Are almost achieve 70%monopoly by finishing tata loop and uninor

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