The Department of Telecommunications on Monday gave conditional approval to the merger of Vodafone India with Idea Cellular, The Economic Times reported. The department has sought over Rs 7,200 crore from both companies on account as one-time spectrum charges and spectrum liberalisation fees.
“Once the companies pay up, [the] department will begin the transfer of Vodafone India’s licences to Idea Cellular, which will complete the merger,” an unidentified senior official said. The department has asked Idea Cellular to pay Rs 3,926 crore for Vodafone’s spectrum and furnish a bank guarantee of Rs 3,342 crore, PTI quoted an unidentified official as saying.
In March, the boards of both companies had approved the proposed a merger between Idea Cellular and Vodafone India. The merger is expected to create the country’s largest telecom company, with Rs 80,000 crore in revenue. It will leave the telecom market with three private players – Bharti Airtel, Vodafone Idea and Reliance Jio.
The combined operations of Idea and Vodafone will be worth more than $23 billion (over Rs 1.5 lakh crore), with a 35% market share and a subscriber base of about 430 million, PTI reported. The merger saves both debt-ridden firms from competition in the market. The combined debt of both firms is estimated to be about Rs 1.15 lakh crore.