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Vodafone and Idea to merge to form India’s largest telco: All the details

The largest telecom operator in India will no longer be Bharti Airtel: The board of Idea Cellular has approved the merger with Vodafone, with Vodafone India Ltd and its wholly owned subsidiary Vodafone Mobile Services Limited, with the entire business of these two companies being vested with Idea Cellular; this will not include Vodafone's investment in Indus Towers, its international network assets and IT platforms. Post merger, Vodafone will own 45.1%, the promoters of Idea will hold 26%, and the balance shares will be held by the public. The deal is expected to be completed in as long as 2 years (during 2018), largely owing to the complexity of the transactions, and the approvals required. The transaction has a break-fee of $500 million "that would be payable under certain circumstances". The companies have estimated run-rate savings of Rs 140 billion ($2.1 billion) annually by the fourth full year, post completion of the merger. The data - Valuation: Vodafone is valued at $12.4 billion, and Idea at $10.8 billion. Vodafone is valued at 6.4x EV/LTM EBITDA, and Idea at 6.3x EV/LTM EBITDA. The combined entities are projecting a net present value of around Rs 670 billion ($10 billion) after integration costs and spectrum liberalisation payments - Turnover: Rs 814.03 billion. The Vodafone companies have a combined turnover of Rs 454.03 billion (55.8% of total), while Idea has a turnover of Rs 360 billion (44.8% of total). - Total connections: 397 million connections: Idea has 192 million connections, while Vodafone has 205 million. -…

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Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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