To form India’s most significant telecom Vodafone and Idea joins their hands for the merger. Idea and Vodafone both have large consumer segment in the nation.
Merger helps both the companies in two ways one is, now they don’t have to face the competition of one another because both of them have cut throat competition with one another. Another benefit is that by merging they from India’s biggest telecom network.
For the merger process Vodafone made payment of Rs 7248 to Department of telecom. Above mentioned sum is necessary to pay by companies for merging their telecom business.
Department of telecom demanded the payment for merging process. Vodafone and Idea paid a total of Rs 7249 crore. Out of which sum of Rs 3926.34 crore has been paid in cash. Rest over the amount of Rs 3322.44 has been under bank guarantee which has been furnished.
Telecom department which manages all the procedure related to telecom gave companies Nod to companies for the merger on the 9th of July. Apart from this telecom department also stated that companies should meet the demand which is raised through the process of merger.
After the merging process has been done Vodafone and Idea becomes largest telecom operator. As expected their worth stood at Rs 23 billion. In other terms, it is about 1.5 Lakh crore. With the merging process market share of idea and Vodafone climbs up to 35% along with 430 million subscriber bases.
The merger of both the companies gives relief breath to both. As now they dont have to face the cut-throat competition of one another. Telecom industry is one of the most competitive business lines.
That’s according to Idea presentation?
In a recent presentation, the Idea stated that the combined 4g spectrum of Idea and Vodafone are capable of providing 450 megabits per second. The speed mentioned here is the broadband speed on mobile speed.
With this merger, Bharti Airtel group fell from the tag of India’s best service provider.
Debt of both the companies is expected to be Rs 1.15 lakh crore.
In this merger of Vodafone and Idea, Vodafone owns 45.1 stakes. While Aditya Birla Group owns 26% stakes. Rest of 28.9% stakes is in the hands of Idea shareholders.