In order to discuss the merger plans, both Kumar Mangalam Birla, Chairman of Idea Cellular and Vodafone Group CEO Vittorio Colao met Telecom Minister Manoj Sinha.
"Birla and Colao sought the government's advice regarding smoothening of the merger process. Vodafone India and Aditya Birla Group-promoted Idea Cellular has announced their much-awaited amalgamation, with Kumar Birla as the Chairman of the merged entity," according to a report.
Both Vodafone and Idea Cellular on Monday announced their agreement to combine their operations in India.
Commenting on the merger announcement, Rajan S Mathews, Director General, COAI says, that "this amalgamation will create the country's biggest telecom services provider with a customer base of over 394 million," adding that we have seen some significant consolidations in the past and this announcement is a welcome and positive step in the direction of TSP coming together and creating resilient networks with a large asset base for an enhanced consumer experience.
The combined company would become the leading communications provider in India with almost 400 million customers, 35 percent customer market share and 41 percent revenue market share.
Prashant Singhal, Global Telecom Leader EY said "Market consolidation is positive for the telecoms sector and the consumer. As operators grapple with excessive competition and pressurized margins, consolidation will help bring synergies and unlock greater cost efficiencies. The consumers will also benefit from the telco strategy will now pivot on innovation to offer value in terms of quality of service and content. Now that the sector is inching towards its ideal state, it is imperative for the Government to expedite approvals for the industry to realize the benefits."
Post the amalgamation, Vodafone will hold 45 percent in the combined entity while Idea promoters will hold 26 percent share. The rest will be held by the public.
The combined entity of Aditya Birla group's Idea Cellular and Vodafone India will have the widest network in the country and pan-India 3G/4G footprint, the companies said in a statement.