Idea, Vodafone one step closer to merge into India’s largest telecom firm with 400 million customers

A rickshaw puller speaks on his mobile phone as he waits for customers in front of advertisement billboards belonging to telecom companies in Kolkata February 3, 2014.REUTERS/Rupak De Chowdhuri

The proposed merger between Idea Cellular and Vodafone India has got approval from the National Company Law Tribunal (NCLT).

After the merger of two telecom companies, Idea and Vodafone will jointly have over 400 million mobile subscribers and together account for the largest share of the Indian telecom segment, reports PTI quoting latest data published by the Telecom Regulatory Authority of India (TRAI).

Vodafone and Idea are the second and third-largest players, respectively, in the Indian telecom industry now. After the merger, the joint entity will become the number one player in the Indian telecom market in terms of customer base. Currently, Bharti Airtel tops the list.

Vodafone India is expected to hold around 47.5 percent share in the new entity, while the rest will be owned by Idea Cellular and promoter Aditya Birla Group (AB Group). Earlier, the AB Group had planned to raise up to Rs 6,750 crore ahead of its merger with Vodafone.

The proposed merger of Vodafone India and Idea will create an entity with revenue of around Rs 775-800 billion. The consolidation of Idea and Vodafone will leave only three or four big companies in the telecom industry, which will result in less competition and bigger revenues.

The merger deal is expected to be completed by the middle of 2018. The two telecom companies now await the final approval for the merger from the Department of Telecom after Vodafone's appeal also gets NCLT approval.

"We wish to inform you that the Hon'ble National Company Law Tribunal, bench at Ahmedabad, vide its order dated January 11, 2018, has sanctioned the composite scheme of amalgamation and arrangement among Vodafone Mobile Services Limited and Vodafone India Limited and Idea Cellular Limited," Idea Cellular was quoted by PTI as saying.

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