Idea Cellular and Vodafone India have paid Rs 7,268 crore or $1.05 billion to meet the main merger condition set by India’s Department of Telecommunications (DoT), Economic Times reported.
The third and second largest telecom operators have paid Rs 3,926 crore in cash and Rs 3,322 crore in bank guarantee, paving the way for the creation of the largest telecom operator in India.
Idea Cellular spokesperson confirmed the development.
DoT, offering the conditional approval on July 9, asked Vodafone and Idea Cellular to clear the payment in order to receive the final approval for the merger. Sources say Vodafone and Idea Cellular cleared payment and may approach court to clear their stand.
Vodafone and Idea Cellular will now approach DoT to formally finalize the merger that will benefit from cost of reduction in operations.
Vodafone-Idea combined entity has a subscriber share of 37.9 percent in April 2018 against 36.4 percent in February 2018, said India Ratings earlier.
Reliance Jio’s mobile subscriber market share increased 7.9 percent to 17.5 percent in April 2018. Bharti Airtel’s subscriber market share increased to 33.3 percent against 31.5 percent in February 2018.
Since Reliance Jio’s 4G launch in September 2016, the Indian telecom industry consolidated into three large mobile operators from over 10 participants.
Weaker telecom operators have exited the market by selling their operations to the stronger telcos. Telenor sold its Indian operations to Bharti Airtel, while Videocon sold its spectrum assets to Bharti Airtel during 2016-17. Airtel later acquired the mobile business of Tata Teleservices as well.
Reliance Jio is in the process of buying telecom assets from Reliance Communications. Aircel, a telecom operator partly owned by Maxis of Malaysia, has already filed for the bankruptcy to come out of the financial issues.