Telecom ministry clears Idea-Vodafone merger with conditions !

New Delhi: The telecom ministry (DoT) on Monday approved the merger of Vodafone India and Idea Cellular that will create the country's largest mobile services operator, an official source said.

"DoT has cleared the Vodafone-Idea merger today. They will have to meet conditions for final approval,” the source told PTI. The department has asked Idea Cellular to pay Rs 3,926 crore in cash for Vodafone spectrum and furnish a bank guarantee of Rs 3,342 crore, the source further said.

Earlier, it was reported the DoT was looking to raise a fresh demand of around Rs 4,700 crore ahead of the merger deal between Vodafone India and Idea Cellular over one-time spectrum charges on Vodafone. An ET report also claimed the Prime Minister's Office (PMO) had sought the details of the proposed deal between the two companies. Both the companies had earlier hoped to seal the deal before June 30, but the demand of Rs 4,700 crore as spectrum charges pushed the date further.

Vodafone Idea Ltd. will hold 1,850 MHz of spectrum, which included 1,645 MHz of liberalised spectrum acquired through auctions. It will be capable of building substantial mobile data capacity, utilising the largest broadband spectrum portfolio with 34 blocks of 3G spectrum and 129 blocks 4G carriers across the country.

The amalgamation will also result in capex synergies, since it will eliminate the duplication of spectrum capacity and infrastructure related requirements.

Idea and Vodafone are separately paying rental for 6,300 mobile sites which will be synced for merged entity in two years.

Earlier this month, Idea announced that the telecom department approved raising the foreign direct investment limit in the company to 100 percent, clearing the last leg of regulatory clearance.

The merged entity would be known as Vodafone Idea Ltd. Vodafone will own 45.1 percent in the combined entity, while Aditya Birla Group would have 26 percent. Idea shareholders will own about 28.9 percent.