Vodafone Group close to finalise Idea merger deal worth £21 billion: Report

Vodafone Group may announce its final agreement to merge its Indian operation with rival mobile operator Idea Cellular in a £21 billion deal in a few days, UK’s Telegraph reported. The publication’s sources said that Vodafone and Aditya Birla Group talks had reached an advanced stage and that an agreement “could be announced this week.” They, however, said that the deal negotiation has proven to be complicated and delicate for Vodafone, which might result in delays.

jio-india-tower

Under the deal, Vodafone and Aditya Birla Group, which is Idea Cellular’s controlling shareholder, will hold equal stake over the combined company. “The structure a “face-saving” move to preserve Birla family pride – under a simpler deal they would be the junior partner in a joint venture,” the publication sources said.

Vodafone Group plans to deconsolidate its Indian subsidiary from its accounts, in a move to take its debts off the main company balance sheets, the report said. It added that both Vodafone India and Idea are worth about £5 billion with the remainder of the deal value made up by debts, the report said.

Rating agency Fitch in a recent note said that the combined entity of Vodafone India and Idea Cellular would have a more balanced subscriber mix, as the current second largest telco is strong in urban areas whereas the Aditya Birla Group telco focuses more on the rural mass market,

The proposed merger would also help both the telecom operators withstand intense price competition brought by Reliance Jio in the Indian telco market. The merger, however, is unlikely to lead to increased pricing power for operators in the short term, the agency said.

Fitch had estimated that the merger would create an entity with 390 million subscribers, a leading revenue market share of around 40%, revenue of $11billion-$12billion, and an EBITDA margin of about 28%-30%.

The agency also said that the proposed merger would also create significant opportunities for capital expenditure (Capex) savings by eliminating duplicate network investments and avoiding future spectrum auctions, given the combined entity should have sufficient spectrum portfolio to expand 3G/4G services across 22 Indian regional markets – or ‘circles’.

Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

46
Leave a Reply

avatar
Photo and Image Files
 
 
 
16 Comment threads
30 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
28 Comment authors
lalitNikhilKaushikSasi MesiriSaket Recent comment authors
newest oldest most voted
jiolover.
jiolover.

it may be voda-idea ?

Sasi Mesiri
Sasi Mesiri

No, Ifone. 😀

Unknown
Unknown

Their name will be Idea cellular as idea is registered on BSE. And Vodafone wants to get listed on BSE that’s why they choose idea.

Recent Posts

Apple Committed to Alert Users on iPhone Battery Performance

Apple has committed to be clearer and more upfront with iPhone users about battery health and performance, the UK’s competition...

OnePlus 3, 3T Start Receiving OxygenOS 9.0.2 Update Based on Android 9 Pie

The wait is finally over for all the OnePlus 3 and OnePlus 3T users as the Chinese company starts seeding...

Airtel Secure: All You Need to Know About the Handset Protection Plan from Bharti Airtel

Safety and security of your device and your files have become a great deal in the industry right now. People...