Vodafone, Idea may start joint operations from April with 400 mn customers

The joint entity resulting from Vodafone India’s merger with Idea Cellular is likely to begin its operations from April, according to a Livemint report.

The National Company Law Tribunal green-lighted the proposed merger between Idea Cellular and Vodafone on 12th January, a move that brought both the companies closer to culminating the deal.

The merger was brought to the table last year in a bid to survive Reliance Jio’s onslaught on telecom companies with hypercompetitive pricing.

As per latest data published by sector regulator Trai, Idea, and Vodafone jointly have over 400 million mobile subscribers and together account for the largest share of the Indian telecom segment.

The combined entity of Vodafone India and Idea Cellular, which are currently India’s number 2 and 3, respectively, would dislodge Bharti Airtel to counter the fierce price war in the world’s second-largest telecom market.

The proposed merger of Vodafone India and Idea will create an entity with a revenue of around Rs 775-800 billion (Rs 77,500-80,000 crore) besides eliminating duplication of spectrum and infrastructure capex, as per India Ratings and Research.

Post the transaction, the British firm will own 45.1 per cent stake in the merged entity, while the Aditya Birla group, Ideas parent, will have 26 per cent after paying Rs 38.74 billion (Rs 3,874 crore) cash for a 4.9 per cent stake.

The remaining 28.9 per cent will be held by other shareholders.