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Shares of Idea Cellular Ltd climbed as much as 4.4 per cent to Rs 57 as the Telecom Ministry (DoT) had on Monday granted conditional approval to the long-pending merger of Vodafone India and Idea Cellular that will create the country’s largest mobile services operator.
According to an official source, the department has asked for a payment of Rs 3,926 crore in cash pertaining to one-time spectrum charge of Vodafone. The amount can be paid either by Idea or Vodafone. DoT has also asked Idea Cellular to furnish a combined bank guarantee of Rs 3,342 crore.
The combined operations of Idea and Vodafone will create the country’s largest telecom operator worth over $23 billion (or over Rs 1.5 lakh crore), with a 35 per cent market share and a subscriber base of around 430 million.
The merger is expected to give breather to both debt-ridden firms Idea and Vodafone, from cut-throat competition in the market where margins have hit rock bottom with free voice calls. It will have the capacity to provide 4G spectrum in all telecom circles of the country, the source said.
Idea Cellular stock had fallen nearly 48 per cent this year, as of last close.
(With inputs from Agencies)
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