On Monday, Idea confirmed that it is merging with Vodafone India - the deal is expected to be completed in two years, and the resulting entity will become the largest telecom provider in India, unseating Bharti Airtel from the top spot.
Here is everything we know about the deal so far.
- The merger is a stock deal - it is not a cash buyout. Vodafone will hold 45.1 percent of the newly formed entity - Idea is paying Rs. 3,874 crores ($592.15 million) to Vodafone for 4.9 percent of the company.
- Idea will have 26 percent, with the rest being held by the public. Idea will also have the sole authority of appointing the Chairman.
- Vodafone has 205 million connections and Idea 192 million, the resulting entity will have almost 400 million customers (or more, considering there are 2 years more to add users.)
- The combined company would have 35 percent customer market share, and 41 percent revenue market share.
- The merged Vodafone-Idea entity will become the biggest telecom operator in India, both by subscribers and revenue. Airtel leads right now with 266 million subscribers, and Reliance Jio has already crossed 100 million subscribers.
- In terms of marketshare, COAI says Airtel had a 32.82 percent pie of the segment in December, while Vodafone had a 25.27 percent share and Idea had a 23.52 percent share. This would mean the Vodafone-Idea merged entity would have share of nearly 49 percent. Mergers in telecom sector can go through if the new entity’s market share does not cross 50 percent.
- The Vodafone-Idea merger would exclude the British telecom operator’s 42 percent stake in Indus Towers, a joint venture between Airtel, Vodafone, and Idea.
- As per a Bloomberg Quint report, the merged unit will have 1120MHz spectrum across the five bands, making it the biggest holder of spectrum in India.
- Bharti Airtel chairman Sunil Bharti Mittal had said at the 47th World Economic Forum at Davos that the Vodafone-Idea merger was a perfect match.
- Analysts say that once the new entity is formed, it would be better to compete over content, rather than start a new price war.
For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.