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

Follow Us

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.
.
“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.

Reported By

Managing Editor

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.

Recent Comments

Anonymous :

In line with Airtel's ?49 plan that offers 20GB of data for the same duration.

Jio Brings New Rs 49 Plan

SCKPA :

Airtel is claiming so many things. But at our location there have so many places where airtel 2g signal is…

REP: Airtel Expands Network Footprint in Bankura District of West…

Faraz :

Yes.. Corruption and arrogance is in the core of this organisation since beginning.. & Now even gov wants everything to…

BSNL's Operating Profits Signal a Positve Future

Mrs Mithilesh :

BSNL DoT aur ITS ka gulam hai, BSNL ke executives aur staff ki halat gulamo aur kutto se bhi battar…

BSNL's Operating Profits Signal a Positve Future

TheAndroidFreak :

Till BSNL doesn't make 5Mhz of band 1/28/8 live across country, it doesn't make sense. Vi is far better operator…

Vodafone Idea Tests Vi AirFiber with Multiple Partners

Load More
Subscribe
Notify of
7 Comments
newest
oldest most voted
Inline Feedbacks
View all comments