Idea Cellular and Vodafone said on Friday that they have completed the merger of their telecom operations in the country, creating India’s largest telecom operator by subscribers and revenue.
The new $23 billion Vodafone-Idea giant will depose Bharti Airtel as the top mobile firm.
The merged entity will have a subscriber base of over 408 million and a market share of over 35 percent. It will have a pan India revenue market share of 32.2 percent.
Now, India has four major telecom players: Vodafone-Idea, Airtel, Reliance Jio and BSNL. State-owned telecom operator MTNL operates in Delhi and Mumbai circles.
The telecom sector has been seeing a wave of consolidation since the entry of Mukesh Ambani led Jio in 2016 unleashed a tariff war which resulted in smaller players wrapping up their businesses.
The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea an enterprise value of Rs 72,200 crore. Vodafone will own 45.1 percent of the new business while the Aditya Birla Group will own 26 percent after paying Rs 3,900 crore cash for a 4.9 percent stake. The savings from the deal are estimated at Rs 14,000 crore.
The entity’s board will have 12 directors, with Kumar Mangalam Birla as chairman and Balesh Sharma as CEO. Vodafone has a right to appoint CFO, and the firms have together chosen Balesh Sharma as CEO.