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Vodafone and Idea Merger to Create Largest Operator in India

Vodafone and Idea Merger to Create Largest Operator in India

Vodafone announced that it will combine its subsidiary Vodafone India with Idea, creating India’s largest telecoms operator. The deal excludes Vodafone's 42% stake in Indus Towers.

The combined Vodafone-Idea group would have almost 400 million customers, or a 35% market share.

Sustained investment by the combined entity will accelerate the pan-India expansion of wireless broadband services using 4G/4G+/5G technologies, support the introduction of digital content and ‘Internet of Things’ (IoT) services as well as expand financial inclusion through mobile money services for the benefit of Indian consumers, businesses and society as a whole, according to a statement by Vodafone.

Vodafone, the world's second-largest mobile phone operator, will own 45.1% of the combined company after transferring a stake of 4.9% to the Aditya Birla Group for USD$579 million in cash. The Aditya Birla Group, the majority owner of Idea, will then own 26.0% and has the right to acquire more shares from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time.

If Vodafone and the Aditya Birla Group’s shareholdings in the combined company are not equal after four years, Vodafone said it will sell down shares in the combined company to equalise its shareholding to that of the Aditya Birla Group over the following five-year period.

Kumar Mangalam Birla, Aditya Birla Group Chairman
This landmark combination will enable the Aditya Birla Group to create a high quality digital infrastructure that will transition the Indian population towards a digital lifestyle and make the Government’s Digital India vision a reality. For Idea shareholders and lenders who have supported us thus far, this transaction is highly accretive, and Idea and Vodafone will together create a very valuable company given our complementary strengths.

Vittorio Colao, CEO, Vodafone 
The combination of Vodafone India and Idea will create a new champion of Digital India founded with a long-term commitment and vision to bring world-class 4G networks to villages, towns and cities across India. 

Author

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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