Everything You Want to Know About Idea-Vodafone Merger

The Idea-Vodafone will result in the formation of the country’s biggest telecom operator. It will have the largest customer base and will hold approximately 35% of the total consumer market. The merger will give tough competition to the existing players such as Airtel and Reliance Jio.

We bring to you some interesting facts about this business merger:

  • During the initial period of the deal Vodafone will have a major stake in the merger equivalent to 45.1%. However, it will late transfer 4.9% of that stake to Aditya Birla Group for a consideration of INR 3874 crore in cash for completion of the merger. After which Aditya Birla will own a total 26% stake in the merged company. But Aditya Birla can acquire more shares from Vodafone in the subsequent years through a prefixed mechanism to equal its shareholding in the merged company.
  • If after 4 years the Vodafone and Aditya Birla shareholding is not equal then Vodafone will sell its shares to equalize its shareholding to Aditya Birla’s within the five year period.
  • In the newly merged company Kumar Mangalam Birla will be appointed as the New Chairman and it will be the onus of Vodafone to find a suitable Chief Financial Officer.
  • Once merged the combined company will be one of the largest telecom companies in India which will have approximately 400 million customers and will have 35% consumer market share and 41% revenue market share respectively.
  • The branding and promotion strategies of the merged companies will be planned and executed in a later stage. In addition, its name will be decided later as well.
  • According to both the companies the merger will be completed within the year of 2018.
  • Both the companies (i.e. Vodafone and Aditya Birla) will sell all their tower assets. Idea has a total shareholding of 11.15% while Vodafone has a shareholding of 42% in Indus towers.
  • The merger will be financed by promoter companies i.e. Pilani Investments and not any list companies like Grasim and Hindalco.
  • Birla gave up its downsizing idea after the merger was officially announced in the media.
  • Until the merger is not completely both the telecom brands will operate individually free of restrictions.
  • Vodafone’s ongoing tax dispute with the Government for Hutchison Whampoa Limited will not affect the merger.
  • A Quint report of Bloomberg states that the merged entity will have a 1120MHz spectrum across 5 bandwidths. Thus, making it the largest spectrum holder of the country.
  • Market analysts predict that the new merger would be a success if it attracts customers through quality market strategies rather than a new price plan.
  • Since both the companies offer 4g spectrum connections they have been trying to attract 4G customers for expanding their 4g services. Idea also has a vast broadband network spread across 17 circles which is also another reason for making this alliance a meritorious journey for both parties.

If you are a customer of Vodafone and seeking any kind of customer support, then you can still contact their customer service cell. Vodafone users can contact the concerned department at Vodafone customer care phone numbers or if you are facing issues in network connectivity, then users can drop an email at Vodafone office email id.

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