Vodafone India, Idea to merge into India's top cellco

21 Mar 2017
00:00

India's second and third ranked mobile operators, Vodafone India and Idea Cellular, have revealed plans to merge to create the India's largest operator by market share.

The companies have announced that Vodafone will combine its Vodafone India subsidiary with Idea Cellular in a deal worth around $23 billion.

The combined company will have around nearly 400 million subscribers and is expected to have a revenue market share of around 40%, propelling it ahead of current market leader Bharti Airtel.

Under the terms of the agreement, Vodafone will take a 45.1% stake in the combined company while the owner of the Idea brand - the Aditya Birla Group - will have about 26%.

Vodafone will transfer a stake of around 4.9% of the company for around 39 billion rupees ($579 million) as part of this transaction, and there will be a mechanism in place designed to equalise the shareholdings within four to nine years. Until this takes place, the voting rights will be equalised.

The marger excludes Vodafone's 42% stake in Indus Towers, the joint venture established between the Bharti Group, Vodafone India and Idea Cellular to manage the operators' tower infrastructure.

“The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns and cities across India,” Vodafone Group CEO Vittorio Colao commented.

“The combined company will have the scale required to ensure sustainable consumer choice in a competitive market and to expand new technologies – such as mobile money services – that have the potential to transform daily life for every Indian. We look forward to working with the Aditya Birla Group to create value for all stakeholders.”

Meanwhile fellow Indian operators Reliance Communications (RCom) and Aircel are one step closer to executing their planned merger.

RCom announced in a regulatory filing that it has secured approval from the Competition Commission of India for the proposed merger, which was announced in September last year.

The companies have already secured approval from the Securities and Exchange Board of India as well as the BSE and NSE stock exchanges, but still requires the go-ahead from the National Company Law Tribunal, the Economic Timesreported.

Under the terms of the planned merger, RCom and Aircel parent Maxis Communications will each hold 50% of the combined company.

Related content

Follow Telecom Asia Sport!
Comments
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.