With the National Company Law Tribunal (NCLT) on Thursday giving its approval to the merger of Vodafone and Idea Cellular, the decks have been cleared for the two to now function as a single entity.
An announcement of the date from which the new entity by the name of Vodafone Idea Limited will start functioning will be made as early as Friday.
The final seal of approval from the NCLT came after the two cleared their dues with the department of telecommunications (DoT) last month.
After the DoT approval the two were required to report to the NCLT that all processes were complete, thus seeking the tribunal’s final nod for the merger.
Though the merged entity would be the country’s largest telecom operator with total revenues of over Rs 80,000 crore, 400 million customers, 35 per cent subscriber market share and 41 per cent revenue market share, the going will not be very smooth as it will be burdened with a combined debt of around Rs 1.07 lakh crore, which according to Bank of America Merrill Lynch would constrain their capex at around Rs 14,000 crore for the next couple of years.
In contrast, the annual capex of Bharti Airtel is at around Rs 24,000 crore. —FE