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Vodafone gets DoT nod to merge 4 assets into Vodafone Mobile Services: Report


The Department of Telecom has given a green signal to Vodafone to merge four of its Indian entities (Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink) into Vodafone Mobile Services (VMS), reports ET. Now the company needs approval of the High Court to amalgamate the entities and complete the process by informing the registrar of companies.

Vodafone is also looking to merge Vodafone West and Vodafone Spacetel with Vodafone Services, for which it will need to submit Rs 1,950 crore. The company is looking to launch a public IPO and is working towards it, despite its ongoing Rs 20,000 crore tax dispute. Vodafone India accounts for 10% of Vodafone’s total revenue, and has over 180 million customers.

According to the report, the UK based telecom operator has been trying to merge these entities since 2012, before it launches a public IPO in India. Apparently, the company has deposited Rs 2,000 crore as directed by the Supreme Court last month. Vodafone India needed to pay Rs 6,678 crore to the government under various heads to go through with the merger, and included payment for a one time spectrum charge, spectrum usage charge and computation of adjusted gross revenue.

The SC had asked Vodafone to deposit this money in order to approve the merger with VMS, a subsidiary of Vodafone India. The government appealed against an interim order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on spectrum usage charge and other issues, including the merger of Vodafone-related firms.

The TDSAT said that no amount was payable till the disputes between the government and Vodafone were resolved. The government moved the Supreme Court contending that Vodafone had not followed the guidelines for the merger and that the deal could not be approved till dues were cleared.

Other developments:

– In November, Vodafone announced that it would invest Rs 13,000 crore for capacity augmentation and new business initiatives in India. It was also looking to increase its staff to 15,000 employees in the next 2 years. For its Make in India initiative, Rs 3,000 crore would go towards development of customer experience centres in Pune and Ahmedabad and Rs 1,000 crore for setting up a Tier-4 data centre and Rs 1,000 crore towards the payment bank for which Vodafone M-Pesa received an in-principle license from the RBI.

– In the same month, Vodafone India reported 23.8 million 3G Internet connections for the quarter ended September 30, 2015. In comparison, the telecom operator had 13.6 million connections in the same period last year, and 22.1 million subscribers in the preceding quarter. Vodafone’s total data connections stood at 66.5 million, down marginally down 0.45% quarter-on-quarter (q-o-q) from 66.8 million in the previous quarter. However, on a year-on-year basis, data connections increased 16% from 57.2 million.

Our Vodafone coverage here.

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