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Moving into the final leg of the proposed Vodafone India-Idea Cellular merger, the merged entity has now agreed to slash its market share to 50 per cent across three circles, complying with the country’s telecom regulations.
The merged entity’s combined market share, based on Adjusted Gross Revenue (AGR), will be reduced across Maharashtra, Gujarat and Kerala circles. This will be done in a year from the date of approval of transfer of services, Idea informed the Department of Telecommunications on Monday.
On July 9, providing a conditional approval, DoT had sought an undertaking from the Aditya Birla Group on reducing market share in these three circles. The licensor also stated that failure of this would result in suitable actions by the department.
Further, Idea Cellular – the acquirer – had also agreed to comply with the spectrum norms under the M&A guidelines, sources briefed on the matter told BusinessLine . According to DoT, the resultant firm – Idea Cellular – will have to pay spectrum charges for retention of the radio waves, whose validity period will remain unchanged following the merger.
Awaiting final nod
Idea has also agreed to this condition, sources said, adding that the companies are expecting a final approval from Telecom Ministry for the merger. It company has also consented to foot all demands that may be raised by DoT on all the three companies – Vodafone India, Vodafone Mobile Services and Idea Cellular – and to pay all past demands of these companies.
Following the merger, all the assets and liabilities – including licences such as International Long Distance, National Long Distance, Internet Service Provider and Unified Access Services Licences – would be automatically transferred to the merged entity.
DoT, in its July 9 letter, had sought replacing of bank guarantees provided by the companies for the spectrum auctions it conducted in 2014, 2015 and 2016.
The Aditya Birla group has also confirmed to make the necessary amendments in the name of the merged entity within 15 days of the merger approval.
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