The merger between telecom majors Idea and Vodafone is in final stages of approval, telecom secretary Aruna Sundararajan said on Tuesday.
The merger between telecom majors Idea and Vodafone is in final stages of approval, telecom secretary Aruna Sundararajan said on Tuesday. The merger, slated to create India’s largest telecom company with an expected user base of around 39 crore, has already received NCLT and SEBI approval.
Speaking on the sidelines of of a COAI event on setting telecom standards for upcoming technologies including 5G, Aruna Sundararajan said that the department of telecommunications is in the process of expediting the process. “There are some FDI approvals that are involved, there’s liberalization of licenses, so there are a number of clearances and not a one step clearance, so we’re in the process of expediting it,” she said.
After reporting earnings for the quarter ended December-17, Idea had said that the proposed merger with Vodafone is expected to complete in the first half of 2018. Notably, Vodafone and Idea are currently the second and the third largest operators in the country. The companies recently announced that Kumar Mangalam Birla will serve as the non-executive Chairman of the merged entity.
In October-17, shareholders of Idea Cellular had approved the company’s proposed merger of its mobile business with Vodafone India, according to a regulatory filing. According to a report by CLSA, an Idea-Vodafone combine will have 43% share of the revenue market share and 40% of the active subscriber base. Further, CLSA notes that the two operators complement each other, with Vodafone having strong presence in urban areas and Idea being an established player in the hinterland. The merged entity would be worth around $23 billion.
When questioned about the exact timeline, Aruna Sundarajan said, “I cannot give a specific date…but we’re in the final stages of drafting the policy before we take it to the Telecom Commission. After that it will go to the government.” Idea shares closed at Rs 80.65, up by more than 0.3%.