Kumar Mangalam Birla's Idea Cellular and Vodafone India will soon be known as Vodafone Idea Limited. Both the telecom operators are in the process of merging their businesses, and the approval for merger by the Department of Telecom is in final stage. On Tuesday, the shareholders of Idea Cellular approved the name 'Vodafone Idea Limited' for the new -- after merger-- entity. The change in the name will be effective post completion of merger of Vodafone India and Idea Cellular.
Vodafone is expected to own 45.1 per cent, 26 per cent by Aditya Birla Group and Idea shareholders will own 28.9 in the combined entity. The new entity will have around 430 million mobile subscribers from Day 1.
The merger was expected to be completed by end of this month. However, reports suggest that the merger could be delayed as DoT may raise a fresh demand of around Rs 4,700 crore from Vodafone India. Vodafone India had merged its all arm into one company and there are dues of around Rs 4,700 crore related to one-time spectrum charges on the company. DoT will ask Vodafone to either clear dues or furnish bank guarantee before merger with Idea, PTI recently reported.
In 2015, Vodafone had merged its four subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, which is now called Vodafone India. DoT at that time had asked Vodafone to clear one-time spectrum charges worth Rs 6,678 core but the company challenged it in court. Following Supreme Court order, Vodafone had paid only Rs 2,000 crore to get the deal cleared.
After merger, Vodafone Idea Ltd will become India's largest telecom company with a market share of around 35 per cent. The move is being seen as a way to counter the highly competitive Indian telecom market.
In March, Idea Cellular and Vodafone Group announced the new leadership team of the soon-to-be merged entity that will have Kumar Mangalam Birla as the non-executive Chairman and Balesh Sharma as the Chief Executive Officer. Balesh Sharma, currently serving as Chief Operating Officer (CCO) of Vodafone India, will handle the combine business plans of the merged entity, and its execution and integration.