New Delhi: Idea Cellular and Vodafone said on Friday that they have completed the merger of their telecom operations in the country, creating India’s largest telecom operator by subscribers and revenue.
The merged entity will have a subscriber base of over 408 million and a market share of over 35 per cent. It will have a pan India revenue market share of 32.2 per cent.
The new $23 billion Vodafone-Idea giant will depose Bharti Airtel — with its 350 million subscribers — as the top mobile firm.
The telecom sector has been seeing a wave of consolidation since the entry of Mukesh Ambani-led Jio in 2016 unleashed a tariff war which resulted in smaller players wrapping up their businesses.
Now, India has four major telecom players: Vodafone-Idea, Airtel, Reliance Jio and BSNL. State-owned telecom operator MTNL operates in Delhi and Mumbai circles.
The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea an enterprise value of Rs 72,200 crore. Vodafone will own 45.1 per cent of the new business while the Aditya Birla Group will own 26 per cent after paying Rs 3,900 crore cash for a 4.9 per cent stake. The savings from the deal are estimated at Rs 14,000 crore.
The entity’s board will have 12 directors, with Kumar Mangalam Birla as chairman and Balesh Sharma as CEO.
Himanshu Kapania has stepped down as MD of Idea Cellular, but will continue as a non-executive director on the merged entity’s board.
Vodafone has a right to appoint the CFO, and the two firms have together chosen Balesh Sharma as the CEO of the new firm.
Both Vodafone and Idea brands will continue to operate.
It will have a broadband network with over 3,40,000 broadband sites covering 840 million Indians and largest voice network with over 2,00,000 unique GSM sites to cover over 1.2 billion Indians (92 per cent population coverage). It will have a large spectrum portfolio of around 1850 MHz and a massive distribution reach with over 1.7 million retailers and around 15,000 branded stores.
