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Inching closer to the formation of the country's largest telecom operator, Idea Cellular and Vodafone made a joint payment of Rs 7,248.78 crore under protest to the Department of Telecommunications for the merger of their mobile business.
"Cellular Idea and Vodafone protest as requested by the DoT for the merger.Rs 3,926.34 crore were paid in cash and a bank guarantee of Rs 3,322.44 crore were provided", an official Idea Cellular confirmed the development.
The Telecommunications Department gave a conditional acquiescence to the merger The combined companies of Idea and Vodafone will create the country's largest telecommunications operator, worth more than 23 billion dollars (more than 1.5 million rupees). , with a market share of 35 percent and a subscriber base of about 430 million.
The merger is expected to give vent to indebted companies Idea and Vodafone, thriving in the market where margins have bottomed out with free voice calls.
It will have the ability to provide 4G spectrum in all telecommunication circles of the country. According to a presentation by Idea, the combined 4G spectrum of the two companies is capable of offering up to 450 megabits per second of broadband throughput on mobile phones in 12 Indian markets.
With the new entity in force, Bharti Airtel will lose the label of India's largest telecommunications service provider to the new entity.
The combined debt of the two companies is estimated at about Rs 1.15 lakh crore.
Vodafone will hold 45.1 stake in the combined entity, while Kumar Mangalam Birla Aditya Birla Group would have 26% and Idea shareholders 28.9%
The Aditya Birla Group has the right to & # 39; 39 to acquire up to 9.5% additional Vodafone participation as part of an agreed mechanism to equalize holdings. over time
If Vodafone and Aditya Birla Group interests in the combined company are not equal after four years, Vodafone will sell shares of the combined company to equalize its ownership interest in that company. Aditya Birla Group during the next five years
Until Equalization is completed, the voting rights of the additional shares held by Vodafone will be limited and the votes will be exercised jointly under the terms of the shareholder pact.
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