Idea-Vodafone merger to benefit govt, consumers: COAI

New Delhi: Cellular body COAI today termed the merger of Idea Cellular and Vodafone India as a "bold" move and said the combined stronger entity will be beneficial to both government and consumers of the Indian telecom market.

Stating that the merger will be "good" not only from an organisational perspective, but from the point of view of consumers and the government, COAI hopes that the amalgamation will get "quick" clearances given the Centre's emphasis on ease of doing business.

"It is a bold move from both the operators... and signals their intention to be long-term players in India. From the government's perspective, it will mean stability in terms of payments because it is a stronger entity that will emerge," COAI Director General Rajan Mathews told PTI.

Idea Cellular board today approved its merger with Vodafone India and Vodafone Mobile Services, a move that will create the country's biggest telecom services provider with a customer base of over 394 million.

Vodafone will own 45.1 per cent of the combined company after transferring a stake of 4.9 per cent to the Aditya Birla group for Rs 3,900 crore in cash concurrent with completion of the merger.

Idea will hold 26 per cent of the combined entity while the rest will be owned by public shareholders. "It is good from the industry's and consumers' perspective as it will mean state-of-the-art services and network, both of which need substantial investment, which is not possible with a financially weak entity," he said, adding that the move will allow consumers to be "ultimate beneficiaries".

Mathews hopes that given the government's emphasis on the ease of doing business, the merger would get quick regulatory clearances. "In a merger, the speed of consolidation is the essence of its success.

So, we are hoping that there would be no delays or roadblocks and the merger would be cleared quickly," he said.