Vodafone-Idea merger approved by Department of Telecommunications
Confirming what was already on the cards, the Department of Telecommunications (DoT) has approved the merger between Vodafone and Idea Cellular after the two companies collectively paid the DoT Rs. 3,900cr, and gave bank guarantees worth Rs. 3,300cr. The new entity, after approval by the Registrar of Companies, will be called Vodafone Idea Ltd., and will be India's largest telecom firm. Here's more.
The Vodafone-Idea merger, which is set to displace Bharti Airtel as India's leading telecom company, is aimed at dominating the Indian telecom market which has been completely disrupted by the entry of Mukesh Ambani-owned Reliance Jio and its offers of free voice calls and ludicrously-low data costs. Notably, since Jio's entry in September 2016, Idea Cellular has reported losses in every quarter.
Understandably, threatened by Jio's position, Vodafone and Idea Cellular announced their merger in March itself. They also highlighted the core leadership team which will lead the merged entity - Aditya Birla Group chairman Kumar Mangalam Birla will be the non-executive chairman of Vodafone Idea Ltd., while incumbent Vodafone India COO Balesh Sharma will serve as the CEO of the new entity.