The telecom ministry on Monday approved the merger of Vodafone India and Idea Cellular – with conditions, PTI reported citing an official source.
The Department of Telecommunications (DoT) has asked Idea Cellular and Vodafone to meet conditions for final approval.
The websites of DoT and telecom ministry do not have any details about the approval. The report did not reveal other conditions for the merger.
The department has asked Idea Cellular to pay Rs 3,926 crore in cash for Vodafone’s spectrum and furnish a bank guarantee of Rs 3,342 crore.
The combined operations of Idea and Vodafone will create India’s largest telecom operator worth more than $23 billion. Vodafone-Idea will have 35 percent market share in the India telecom market and a subscriber base of about 430 million. Vodafone is India’s second largest and Idea Cellular is third largest telecom operator behind Airtel.
The merger is expected to give a breather to both debt-ridden firms from competition in the market where margins have hit rock bottom. The combined debt of both telecom firms is estimated to be about Rs 1.15 lakh crore.