Another shock for the industry, as the merger between India's second and third telecom service provider (Vodafone- Idea Cellular) may lead to massive job losses, ET reported.
"The retrenchment has to happen swiftly because, in times of margin pressures in a debt-heavy industry, both companies do not want to start new operations burdened with excess manpower," ET quoted senior executive aware of the development.
The merger has been already approved by NCLT, Sebi, and CCI and merged entity will have 410 million customers and nearly 42 percent customer market share (CMS) and nearly 37 percent revenue market share (RMS).
Meanwhile, PTI report says that Department of Telecom (DoT) is waiting for Department of Industrial Policy and Promotion (DIPP) to give go-ahead for increasing the foreign direct investment (FDI) limit in Idea Cellular to 100 percent.
"Only FDI clearance for Idea is pending before a merger of Vodafone (India) with it. FDI limit needs to be raised in FDI for clearing both the deals of Idea - sale of a tower to ATC and Vodafone merger," report quoted sources.
To recall, Idea Cellular and Vodafone Group Plc announced the proposed leadership team of the combined business, that will have Kumar Mangalam Birla as the non-executive Chairman, while Balesh Sharma (currently Chief Operating Officer of Vodafone India) will be the CEO and he will be responsible for the combined business strategy and its execution as well as driving integration.
The existing leadership teams of Idea Cellular and Vodafone India will continue to manage their separate businesses and be accountable for each company's operational performance until the merger becomes effective.
It is only upon completion of the merger that the two businesses will cease to operate as distinct and competing entities. Chief Financial Officer (CFO) at Idea, Akshaya Moondra will take charge as CFO of the new company.
Current Deputy managing director of Idea, Ambrish Jain will take charge as Chief Operating Officer of the new company.
However, Sunil Sood will join the Vodafone Group AMAP Leadership Team and also help governance through Board memberships. The Aditya Birla Group intends to nominate Himanshu Kapania as the non-executive Board member of the merged entity.