Idea, Vodafone pay Rs 7,268 cr to DoT for merger

The Department of Telecom is likely to give final approval for merger of Idea Cellular and Vodafone soon as both the companies have made joint payment of Rs 7,268 crore.

"Idea Cellular and Vodafone have made payment under protest as demanded by the DoT for the merger. Rs 3,926.34 crore have been paid in cash and bank guarantee of Rs 3,342.44 crore have been furnished," said an official in the DOT.

The Department of Telecom gave conditional nod for merger of these companies on July 9 and asked companies to meet the demand raised for taking merger on record.

With the payment of money by both the firms, the DOT may take a decision soon to give final approval for the merger, said the official.

Once merger process completes, the new entity will create the country’s largest telecom operator worth over $23 billion (over Rs 1.5 lakh crore), with 35% customer market share and subscribers base of around 430 million.

The merger will also help both the firms to tide over their debt and face competition in the industry, that has intensified after entry of Reliance Jio to the market.

Merger entails transfer of licenses of Vodafone India and Vodafone Mobile Services Limited to Idea Cellular. The combined entity will begin working as single entity-Vodafone Idea Limited.

Vodafone will own 45.1% stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group would have 26% and Idea shareholders 28.9%.

The new company will have the capacity to provide 4G spectrum in all telecom circles of the country. According to a presentation by Idea, the combined 4G spectrum of both the companies are capable of offering up to 450 megabit per second broadband speed on mobile phones in 12 Indian markets.