New Delhi:
In what could be the biggest news right now in the telecom arena, the Idea Cellular board has approved the merger of Vodafone India Ltd and its wholly-owned arm Vodafone Mobile Services with the company.
After the successful implementation of the deal, the combined entity will create India's largest telecom firm with a revenue share of around 40 per cent and a subscriber base of over 380 million, according to India Ratings and Research.
The board of directors of Idea Cellular at its meeting held on Monday approved the "scheme of amalgamation of Vodafone India Limited (VIL) and its wholly owned subsidiary Vodafone Mobile Services Limited (VMSL) with the company", Idea said in a regulatory filing.
At the present moment, Bharti Airtel is the largest telecom operator in India with 263.35 million mobile subscribers, Vodafone has 202.79 million users and Idea Cellular 187.68 million.
The proposed merger of Vodafone India and Idea will create an entity with a revenue of around Rs 77,500-80,000 crore besides eliminating duplication of spectrum and infrastructure capex.
With 32.84 per cent, Bharti Airtel has the maximum market share, but the combined entity of Vodafone India and Idea will command 43 per cent, say analysts.
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Further, the spectrum of Vodafone India in seven circles and that of Idea in two, whose permits are expiring in 2021-22, is together valued at around Rs 12,000 crore as per last auction price. These permits are not in common circles, and hence there could be potential spectrum capex synergies between the two companies, the report said.
The turnover of Vodafone India is Rs 5,025 crore and of VMSL is 40,378 crore. Idea Cellular's turnover is Rs 36,000 crore.
