On Friday, Aditya Birla Group said that Vodafone India and Idea Cellular have completed the merger to create the country’s largest telecom company with 408 million active subscribers and a revenue market share of 32.2%.
“We wish to inform you that pursuant to filing of the NCLT orders with the relevant Registrars of Companies on 31st August, 2018, the Scheme has become effective on even date and the merger of VMSL (Vodafone Mobile services Ltd) and VIL (Vodafone India Ltd) with the Company has been completed,” said Idea Cellular in a regulatory filing on Friday.
The new board of 12 directors (including six Independent directors) of just merged Vodafone Idea met on Friday morning with Kumar Mangalam Birla as the chairman.
“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,” said Birla. “As Vodafone Idea, we are partnering in this initiative by building a formidable company of international repute, scale and standards,” he added.
The new company will be headed by Balesh Sharma who said that the “company has the scale and resources to ensure sustainable customer choice and introduce new technologies”. He added that the new team will cater to both retail and enterprise customers with “new products, services and solutions”.
Vodafone Idea will have a spread of 15,000 branded stores and 1.7 million retail touch points across the country.
The merger which has been in the making for well over a year is expected to face the challenges of stiff competition from Bharti Airtel and Jio. It has a debt of Rs 1.09 lakh crore but has the option to monetise an 11.15% stake in Indus Towers which would equate to a cash consideration of Rs. 5100 crore.
In the joint entity , UK based Vodafone Group owns 45.2% stake while Aditya Birla Group has 26% stake , both on fully diluted basis.
The National Company Law Tribunal (NCLT) on Thursday had approved the merger of Idea Cellular and Vodafone India, clearing the last hurdle to allow the creation of India's largest mobile phone company with the most number of subscribers and revenue share, displacing Bharti Airtel which has held the top spot for some 15 years.
The largest merger in the sector now leaves three major players – Bharti Airtel, Reliance Jio Infocomm and Vodafone Idea – to fight it out for over a billion subscribers in a market which is seeing surging demand for data amid rick bottom tariffs as the country moves to 4G from 3G and smartphones become more affordable.