Idea-Vodafone Merger Gets Final Approval From DoT | Merger To Be Completed By August

Описание: Idea-Vodafone Merger Gets Final Approval From DoT | Merger To Be Completed By August.The department of telecommunications (DoT) has given the final nod to merger of Vodafone India with Idea Cellular, issuing a letter to this effect to both companies. The move creates Vodafone Idea Limited, the largest carrier in India by subscribers and revenue market share.

People aware of the development said that the approval, issued Thursday, specifies that the licenses of Vodafone Mobile Services Limited (VMSL) and Vodafone India stand transferred to Idea Cellular Ltd, along with the assets and liabilities of both the Vodafone companies.

"Bank guarantees for deferred spectrum payments that Vodafone owes to a DoT will be amended by the banks concerned, and will be transferred to Idea Cellular, since that will be the entity that will hold the licenses," an official in DoT said.

"The approval letter however includes the conditions that the merged entity will have to comply with the outcomes of pending cases in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and other courts," he added.

Shares of Idea Cellular rose 0.82% to Rs 55.40 as of 2:22 pm, on the Bombay Stock Exchange on Thursday.

The next step to the process will be all companies informing the Registrar of Companies of the changes, after which Vodafone India and its subsidiary VMSL will cease to exist, one of the people added.

The final approval came after Idea Cellular and Vodafone India agreed to pay up Rs 7268 crore - Rs 3926.34 crore (in cash) by Vodafone India as spectrum liberalization charge and bank guarantee of Rs3322.44 crore by Idea Cellular for one time spectrum charges, on Monday. The companies have, however, paid under protest, leaving doors open for challenging the demands in the future.

Vodafone Group CEO Vittorio Colao said on Wednesday that he expected the merger to close in August, which will allow the company to unlock substantial synergies. Analysts expect the merged entity to clock $10 billion in savings over time, making it stronger to face rivals Bharti Airtel and Reliance Jio Infocomm.

The combined entity, to be India’s largest with 430 million customers and revenue market share of 37%, will remain listed with a new CEO Balesh Sharma.