“We wish to inform you that the Department of Telecom has approved the merger of Vodafone India ltd and Vodafone Mobile Services Ltd with Idea Cellular Ltd,” the company said in a statement today morning.
“The merger is now subject to National Company Law Tribunal, Mumbai Bench, passing the dissolution order of VMSL and VIL, which is expected shortly,” it added.
The development points to a slight delay in the time table that the companies had set for themselves for completing the transaction, which widely expected to achieve closure in June itself.
However, DoT sprung a few last-minute surprises, trying to get the companies to make payments against all the various invoices and claims raised by the DoT in the past.
Idea submitted a bank guarantee of Rs 3,322 cr, while Vodafone paid cash of Rs 3,926 cr towards the conversion of allocated spectrum into free spectrum.
The two companies have said that they will maintain both brands even after merger. However, they are eventually expected to use an integrated brand.
The merger was necessitated to achieve scale and cut costs to remain competitive with new entrant Reliance Jio, which has cut data prices by about 90% and voice prices by about 70% since its entry into the market two years ago.