The Department of Telecom (DoT) on 09 July 2018 gave its nod to the Vodafone India-Idea Cellular deal to form the biggest telecom entity in India, but with some riders. “DoT has cleared the Vodafone-Idea merger 09 July 2018. They will have to meet conditions for final approval.
The DoT was looking to raise a fresh demand of around Rs 4,700 crore ahead of the merger deal between Vodafone India and Idea Cellular over one-time spectrum charges on Vodafone. An ET report also claimed the Prime Minister’s Office (PMO) had sought the details of the proposed deal between the two companies.
The DoT nod, however, is significant as reports suggest the process of the proposed deal is being closely watched by the PMO. Being one of the biggest merger deals in telecom and the involvement of Vodafone, whose parent company Vodafone UK had been caught up in a tax dispute with the Indian government makes it even more interesting for foreign investment companies looking for future deals in India.
Both Idea and Vodafone are planning to join forces to create India’s largest telecom company worth over Rs 1.5 lakh crore. The move is being seen as a way to counter the highly competitive Indian telecom market, disrupted after the entry of Mukesh Ambani-led Reliance Jio, which has been gaining ground with around 15.8 percent market share by March 2018.