Airtel-Telenor and Vodafone-Idea merger to get clearance soon

James Marshall
May 11, 2018

"Very shortly. (It will take) normal processing time and it will be done", Sundararajan said.

Telecom Secretary Aruna Sundararajan on Wednesday said the Department of Telecommunications (DoT) will clear the mergers of Bharti Airtel-Telenor and Vodafone-Idea soon, a move that will bring some stabilisation in the telecom sector now battling financial stress.

The Supreme Court on Wednesday dismissed a government petition challenging a telecom tribunal order directing it to clear Bharti Airtel Ltd's acquisition of Telenor India without insisting on a bank guarantee for nearly Rs1,499 crore. The top court's decision is widely being seen as a relief to telecom industry, which is now going through a consolidation phase.

The department of telecommunications (DoT) had challenged an order passed by the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), which ordered the government to clear the deal without demanding a bank guarantee. The first batch of emails was sent out to Vodafone subscribers and vendors by the Managing Director of the company Sunil Sood, whereas for Idea the MD Himanshu Kapania sent out similar mails on behalf of Idea Cellular.??Kapania's mail said, "The merger process is on track and expected to be completed in the first half of the calendar year 2018". Asked if the SC ruling can be applied to Vodafone-Idea deal, Sundararajan said, "We will have look at each case differently", indicating that the rules of OTSC would not be generic. The deal will help it narrow the revenue market share gap with the emerging Vodafone India-Idea Cellular combine, which will become the country's largest phone company after their merger.

The secretary said that the Department of Industrial Policy and Promotion and the ministry were working closely to ensure they did not create any bottlenecks for the merger. "We go through the due diligence and expedite the the same time, we are working with the company to ensure there are no delays from our side", she added. Foreign shareholding in the combined Idea-Vodafone entity, therefore, would breach the automatic approval limit of 49 per cent. Vodafone would own 45.1 per cent of the combined company after transferring a 4.9 per cent stake to Aditya Birla Group for Rs 3,900 crore in cash, concurrent with completion of the merger.

Earlier, the DoT had estimated that the facility could be rolled out over the next three to four months, once the modalities of the licences for in-flight connectivity service providers and back-end agreements between various stakeholders are worked out. Vodafone insider and current Chief Operating Officer (India) Balesh Sharma would be chief executive officer (CEO) of the merged entity.

Other reports by Click Lancashire

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