DoT conditionally approves Vodafone-Idea merger

telecomasia.net

India's Department of Telecom (DoT) has given conditional approval to the long-delayed merger between Vodafone India and Idea Cellular, demanding spectrum payments from both operators.

The department has long been considering making a demand for payment from the combined company as a result of its ongoing demand that Vodafone pay the difference in price between the market-allocated price and the price it paid for an administratively-issued 4.4MHz of spectrum.

Now, DoT has demanded a bank guarantee of more than 39 billion rupees ($567.9 million) from Vodafone to cover these dues, the Economic Times reported.

The department is also seeking a 30 billion rupee bank guarantee from Idea Cellular related to one-time spectrum charges.

Sources told the Economic Times that the approval, the last required hurdle before the merger is complete, is contingent on these payments.

The merger between Idea and Vodafone is expected to create India's largest telecoms operator with a revenue market share across the country of nearly 42% and annual revenues of around 630 billion rupees.

With the merger, the Indian mobile market will have consolidated into three major players – Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm – and may finally be in a position to recover from its sustained and damaging price wars.

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