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Idea, Vodafone India merger in numbers – 400 million telecom users

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Mumbai: Sunil Mittal led Airtel will no longer be the largest telecom operator in the country. Reliance Jio’s challenge too may be rendered a bit ineffective and it will have to think twice before it further announces more appealing plans for India’s ever expanding telecom market.

Mukesh Ambani led Reliance Jio has taken the Indian telecom market by storm. The complacent looking telecom operators have woken up and their unstoppable thirst for raising call and data charges has come to a sudden stop.

Idea Vodafone merger in numbers

While this has made the smartphone and mobile phone users across the country extremely happy, it has threatened the well balanced hierarchy of the mobile phone operators in the country.

While small operators are selling their companies and leaving the market, the bigger operators are coming together, something that was never expected without Reliance Jio effect.

In the meantime, in one of the biggest merger in the telecom space, Vodafone India and Aditya Birla Group-promoted Idea Cellular on Monday announced the much-awaited amalgamation. Idea Cellular in a regulatory filing on Monday said, its Board of Directors “have approved the scheme of amalgamation of Vodafone India Limited and its wholly owned subsidiary Vodafone Mobile Service Limited with the company (Idea).”

The regulatory filing made it clear that Vodafone will own 45.1 per cent of the combined company, Idea said in a statement.

A statement by Kumar Mangalam Birla, Chairman, Aditya Birla Group said, “The Aditya Birla Group will then own 26 per cent and has the right to acquire more shares from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time…For Idea shareholders and lenders who have supported us thus far, this transaction is highly accretive, and Idea and Vodafone will together create a very valuable company given our complementary strength”.

On the other hand Vittorio Colao, Chief Executive, Vodafone Group Plc while confirming the merger said, “The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns and cities across India…The combined company will have the scale required to ensue sustainable consumer choice in a competitive market and to expand new technologies – such as mobile money services – that have the potential to transform daily life of every Indian”.

Reports suggest that Vodafone will own 45.1 per cent of the merged entity, after it transfers about 4.9 per cent to promoters of Idea and/or their affiliates for Rs. 3,874 crore in cash, Idea said. The Aditya Birla group will own 26 per cent of the entity and will have the right to acquire more shares from Vodafone under a mechanism with a view to equalising shareholdings over time.

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