Sources have hinted that the Department of Telecommunication (DoT) on Thursday gave a final approval to the Vodafone India-Idea merger deal, reported ET Now after speaking to sources. According to the sources, the DoT has sent a formal communication to both the companies regarding the same. With the move, the merged entity will become the largest telecom company – in terms of subscribers – in India.  

An Economic Times report suggested that with the approval from DoT, the licences of Vodafone Mobile Services Limited and Vodafone India will be transferred to Idea Cellular, which will also inherit the assets and liabilities belonging to Vodafone companies. An official from the DoT told the publication that the bank guarantees which Vodafone India owes to DoT will be “amended” by the concerned banks and will subsequently be transferred to Idea Cellular.  

The official went on to add that the approval letter has certain conditions with regards to pending cases of the combined entity in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and other courts as well. Shares of Idea Cellular was trading positively on the Bombay Stock Exchange after the approval.  

Telecom Minister Manoj Sinha On Vodafone-Idea Merger

While the key hurdle has been crossed, the next for both the companies will be to inform the Registrar of Companies, following which Vodafone and its subsidiary unit will become a part of Idea Cellular.  

Worth mentioning that the final approval came after a period of significant uncertainties; Idea Cellular and Vodafone India had to agree to pay Rs 7,268 crore, out of which Rs 3,926.34 crore must be paid in cash by Vodafone India towards spectrum liberalisation charges on Monday. However, both the companies involved in the deal agreed to pay in pressure and may challenge the decision in future.  

The merger is expected to be closed by August, according to Vodafone Group CEO Vittorio Colao. The combined entities will now be able to take on strong players in the telecom market such as Reliance Jio and Bharti Airtel. The merger certainly opens up space for more disruption in the telecom market, which may not be beneficial for the telcos but customers will certainly reap the benefits of low-priced data and call rates. 

For those who are unaware, the merged entity will be India’s largest telco with a customer base of approximately 430 million and a revenue market share of 37 per cent.