A day after clearing the last regulatory hurdle vis-a-vis the National Company Law Tribunal (NCLT), Aditya Birla Group announced on Friday that Vodafone India and Idea Cellular have completed the merger to create India’s largest telecom company. The combined entity that boasts of 408 million active subscribers and a revenue market share of 32.2 per cent replaces Airtel as India’s number one telco. Both Vodafone and Idea will continue to operate as independent brands post the merger, Aditya Birla Group has confirmed.
“Today, we have created India’s leading telecom operator. It is truly a historic moment. And this is much more than just about creating a large business. It is about our vision of empowering and enabling a new India and meeting the aspirations of the youth of our country. The “Digital India”, as our Honourable Prime Minister describes it, is a monumental nation-building opportunity. As Vodafone Idea, we are partnering in this initiative by building a formidable company of international repute, scale and standards,” Kumar Mangalam Birla, chairman of Aditya Birla Group and Vodafone Idea Limited, said making the announcement.
The newly appointed Board also announced names of the new directors and named additional promoters of the merged entity called Vodafone-Idea. The Board has appointed Balesh Sharma as the CEO of Vodafone-Idea.
“As India’s leading telecom operator with two popular and loved brands, the company has the scale and resources to ensure sustainable customer choice and introduce new technologies. We are committed to offer both our retail and enterprise customers an excellent experience while fulfilling their evolving digital and connectivity needs via new products, services and solutions. We will offer them more network coverage, more value and more excitement,” Balesh Sharma, CEO, Vodafone Idea Limited said.
The Vodafone-Idea merger has been a long time coming, and now that it is completed, it is expected that India’s telecom scene will be subject to some more changes. India’s telecom market will now literally be governed by three companies, Vodafone-Idea, Airtel and Reliance Jio. The newly formed Vodafone-Idea Limited will have a large spectrum portfolio of 1850 MHz and an adequate number of broadband carriers to boot, something that it hopes would help it to fight competition and get more subscribers on-board. The merged entity will provide services across 2G, 3G and 4G platforms.
“We will continue to offer a wide variety of digital services and solutions under both of our popular and loved brands (Vodafone and Idea). Services – including Voice, Data, Mobile payments, IoT, advanced enterprise offerings and entertainment – will all be conveniently accessible via digital channels and extensive on-ground presence of 15,000 branded stores and 1.7 million retail touchpoints across the country,” Vodafone-Idea said in a statement.
The merger although it is expected to generate Rs 140 billion annual synergy will be also under a net debt of Rs 1.09 lakh crore.