The hotly anticipated merger of Vodafone India and Idea Cellular has been completed, creating a new Indian market leader with over 408 million subscribers.
The companies revealed their plans to merge in March 2017, and since then have been obtaining the numerous required regulatory clearances. This culminated last month, when India’s Department of Telecommunications (DoT) offered its approval on the condition that the operators pay $1 billion in spectrum fees.
The new entity, Vodafone Idea, combines the customer bases of the two operators to surpass longstanding market leader Bharti Airtel. Vodafone will hold a 45.2% stake in the unit, while Idea’s parent company Aditya Birla Group will hold 26% and the rest will be held by the public.
Vodafone anticipates that the new unit will enable an annual cost reduction of INR140 billion (€1.7 billion). For the year leading up to 30th June 2018, Vodafone India and Idea Cellular had combined revenue of €7.1 billion. Vodafone Idea’s cash balance is currently €2.3 billion, while its debt – which is predominantly owed to India’s government – is €13.2 billion.
The new entity’s CEO will be Balesh Sharma, formerly the chief operating officer of Vodafone India. Aditya Birla Group controlling shareholder Kumar Mangalam Birla will chair Vodafone Idea.
