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Vodafone, Idea merge to create India’s largest, world’s 2nd largest telecom company

Kumar Mangalam Birla-led telecommunications major Idea Cellular has agreed to merge with the Vodafone India,  Indian unit of the UK headquartered Vodafone Plc.

The blockbuster merger will create world’s second largest (after China Mobile) and India’s largest telecom company by overtaking Bharti Airtel Ltd.

Key Facts
  • The merged entity will have almost 400 million customers with 35% customer and 41% revenue market share. It will have revenue of Rs. 81,600 crore and an operating profit of Rs.24,400 crore.
  • Together, Vodafone India and Idea Cellular have debt of Rs. 1.08 trillion. The merger is expected to be completed in 2018.
  • The brand strategy for the new firm will be developed in due course. Kumar Mangalam Birla will be the chairperson of the merged entity.
  • Vodafone will own 45.1% in the combined entity, while Kumar Mangalam Birla and other promoters of Idea Group will own 26% and the rest will be owned by the public.
  • The merged entity would hold 1850 MHz, including circa 1645 MHz of liberalised spectrum acquired through 7 auctions.
  • It will be capable of building substantial mobile data capacity, utilising the largest broadband spectrum portfolio with 34 3G carriers and 129 4G carriers across the country.
  • The merger will be completed by 2018, subject to approvals from shareholders, creditors, stock exchanges, SEBI, telecom department and Competition Commission of India (CCI).

Idea-Voda

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Sunil Bharti Mittal appointed as Chairman of GSMA

The Founder and Chairman of Bharti Enterprises Sunil Bharti Mittal was appointed as Chairman of GSM Association (GSMA).

He succeeds Jon Fredrik Baksaas who will step down at the end of 2016. In his new role, Mittal will oversee the strategic direction of the organisation.

Besides, Mari-Noëlle Jego-Laveissiere, Executive Vice President, Innovation, Orange Group was re-elected as Deputy Chairman of GSM Association. It also elected the new members of the 26-member Board of the company.

About Sunil Bharti Mittal

  • Sunil Mittal is Indian telecom tycoon, entrepreneur and philanthropist.
  • He is the founder, chairman and Group CEO of Bharti Enterprises, which has interests in telecom, financial services, retail and agri business.
  • The Group’s flagship company Bharti Airtel is India’s largest telecom company and world’s third largest mobile operator. It has its presence in 20 countries across Asia and Africa and customer base of over 275 million.
  • Presently, he serves on many international bodies and think-tanks and currently is the Chair of the World Economic Forums (WEF) Telecommunications Steering Committee.
  • He is listed as the eight richest person in India by Forbes with a Net worth of 7 billion dollars. In 2007, he was awarded the Padma Bhushan, India’s third highest civilian honour.

About the GSM Association

  • The GSMA represents the interests of mobile operators worldwide. It unites nearly 800 operators with almost 300 companies in the broader mobile ecosystem.
  • The GSMA Board has 26 members, including 25 operator representatives from world’s largest operator groups as well as smaller, independent operators.
  • It produces industry-leading events such as Mobile World Congress Shanghai, Mobile World Congress, Mobile World Congress Americas and the Mobile 360 Series of conferences.

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Union Government forms panel to resolve telecom penalty row

The Union Telecom Ministry has formed a committee to look into the regulator TRAI’s recommendation of a Rs. 3,050 crore penalty on top three telcos — Airtel, Vodafone and Idea.

The committee has been asked to give a report on the recommendations soon likely to be before 15 November 2016.

What is the case?

  • Earlier TRAI had recommended Department of Telecom to impose penalty on these three incumbents telecom companies for denying interconnection points to Reliance Jio.
  • According to TRAI, these three companies have violated licence norms by denying adequate interconnection points to Reliance Jio Infocomm.
  • Their actions also have stifled the competition and are seen as anti-consumer and against public interest.
  • The Reliance Jio had alleged that due to inadequate interconnection points its subscribers were unable to make calls to other networks.
  • TRAI had recommended fine for Airtel and Vodafone to Rs.1,050 crore for 21 service areas (all, expect Jammu and Kashmir) and for Idea the penalty was pegged at Rs 950 crore for 19 service areas (all, except for Himachal Pradesh, Jammu and Kashmir and Northeastern States).

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