Idea, Vodafone competitors till the merger is completed
MUMBAI: Idea Cellular managing director Himanshu Kapania has told employees that the telecom operator will remain in competition with Vodafone India till the merger is completed, a clarification that experts said is aimed at avoiding the possibility of flouting any laws.
In an email last week, Kapania advised several middle management employees to keep company plans and communications to themselves, and not share these with their counterparts in Vodafone India, people aware of the matter said.
On March 20, India’s No. 2 telco Vodafone and third ranked Idea had said they had signed a pact to merge their telecom businesses, excluding Vodafone India’s stake in Indus Towers.
The two companies have applied for clearances to various authorities. The advisory, experts said, is intended to ensure no rules laid down by the Competition Commission of India and the Department of Telecommunications are flouted ahead of the mega merger, which is expected to conclude sometime in 2018.
Till a merger is sealed, the firms are not supposed to share spectrum, assets or business plans including on marketing, said an expert, who did not wish to be identified.
An email query sent by ET to Idea Cellular did not elicit a response till late evening on Thursday.
The proposed merger, which will create the largest telecom company in the country, requires approvals from the stock exchanges, Securities and Exchange Board of India, National Company Law Tribunal and the Competition Commission of India, besides the court and the telecom department.
In the new entity, Kumar Mangalam Birla will be the chairman while the chief financial officer will be named by Vodafone. The posts of chief executive and chief operating officer are to be decided jointly.
Vodafone India is believed to have communicated a similar message to its senior management, one of the persons cited earlier said.
In response to an email query from ET, Vodafone India said, “As a multinational, we are well aware of our responsibilities in a merger. Any purported mail from the company to its employees is to do with internal day to day working of the company and we would not comment on it.”
In an email last week, Kapania advised several middle management employees to keep company plans and communications to themselves, and not share these with their counterparts in Vodafone India, people aware of the matter said.
On March 20, India’s No. 2 telco Vodafone and third ranked Idea had said they had signed a pact to merge their telecom businesses, excluding Vodafone India’s stake in Indus Towers.
The two companies have applied for clearances to various authorities. The advisory, experts said, is intended to ensure no rules laid down by the Competition Commission of India and the Department of Telecommunications are flouted ahead of the mega merger, which is expected to conclude sometime in 2018.
Till a merger is sealed, the firms are not supposed to share spectrum, assets or business plans including on marketing, said an expert, who did not wish to be identified.
An email query sent by ET to Idea Cellular did not elicit a response till late evening on Thursday.
The proposed merger, which will create the largest telecom company in the country, requires approvals from the stock exchanges, Securities and Exchange Board of India, National Company Law Tribunal and the Competition Commission of India, besides the court and the telecom department.
In the new entity, Kumar Mangalam Birla will be the chairman while the chief financial officer will be named by Vodafone. The posts of chief executive and chief operating officer are to be decided jointly.
Vodafone India is believed to have communicated a similar message to its senior management, one of the persons cited earlier said.
In response to an email query from ET, Vodafone India said, “As a multinational, we are well aware of our responsibilities in a merger. Any purported mail from the company to its employees is to do with internal day to day working of the company and we would not comment on it.”
