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As soon as Idea Cellular announced news of <a href="http://www.businessinsider.in/idea-to-merge-with-vodafone-india-time-to-say-hello-to-indias-biggest-telco/articleshow/57728557.cms">forthcoming merger</a> with <a href="http://www.businessinsider.in/vodafoneindia-just-partnered-with-amazon-prime-video/articleshow/57717680.cms">Vodafone India</a> and <keyword id="2099963" type="UNKNOWN" weightage="100" keywordseo="Vodafone-Mobile-Services">Vodafone Mobile Services</keyword> (VMSL), its stocks dipped by 15%. 
 The deal has put Idea's implied enterprise value at $10.8 billion, as against the $12.40 billion valuation for <keyword id="6354923" type="COMPANY" weightage="100" keywordseo="Vodafone-India">Vodafone India</keyword>. 
 
After the stock fell 14.73%, it stood at Rs 92 on BSE. Earlier, it had risen 14.68% in the early trade and hit a high of Rs 123.75. 
 
Also read: <a href="http://www.businessinsider.in/airtel-vodafone-and-idea-are-facing-the-heat-from-jio-as-they-may-lose-upper-end-customers/articleshow/57287150.cms">Airtel, Vodafone and Idea are facing the heat from Jio as they may lose upper-end customers</a> 
 
In its filing to BSE, <a href="http://www.businessinsider.in/with-idea-making-incoming-calls-free-national-roaming-willsoon-be-a-matter-of-past/articleshow/57606367.cms">Idea</a> had said that after the deal, its promoters will hold a 26% stake in the resultant entity, while <keyword id="15492" type="CITY" weightage="100" keywordseo="Vodafone">Vodafone</keyword> will hold 45.10% after its promoters would transfer a 4.9% stake to Idea promoters for Rs 3,874 crore in cash. Rest of the stock would be for the public. 
 
Also read: <a href="http://www.businessinsider.in/reliance-jio-will-be-unfazed-by-vodafone-idea-merger-heres-why/articleshow/57509811.cms">Reliance Jio will be unfazed by Vodafone-Idea merger. Here’s why</a> 
 
"We expect the combine entity will have about 40 per cent revenue share. In the process of integration and combining the two big operations, they might lose some revenue market share to Jio or to other incumbents. We estimate about $11-12 billion revenue and Ebitda margins of 28-30 per cent, once these firms combine their operations." Nitin Soni of Fitch Ratings told ET. 
 
Idea also announced that it would issue equity shares to Vodafone India after the scheme of amalgamation with VMSL. This would be equal to 47% of the post-issue paid-up capital of the company on a fully-diluted basis. 
 
The company also said that after the merger, shares issued to Vodafone India in pursuant of the merger of VMSL with the company would stand cancelled. 
 
(Image source: Forbes)

Idea-Vodafone merger dips Idea stocks by 15%

<keyword id="6354924" type="PERSON" weightage="100" keywordseo="Idea-Cellular">Idea Cellular</keyword>, which faced <a href="http://www.businessinsider.in/Jio-effect-Idea-posts-net-losses-for-Q4-FY-2017/articleshow/58666958.cms">huge losses</a> in FY17 after its subscribers moved to Reliance <keyword id="2003276" type="UNKNOWN" weightage="100" keywordseo="Jio">Jio</keyword> for free data services, hopes to recover soon. The hope has stemmed from the fact that a big chunk of its data customers has already come back after Jio started charging its services. Idea cellular MD <keyword id="510299" type="PERSON" weightage="100" keywordseo="Himanshu-Kapania">Himanshu Kapania</keyword> said that the rates would be stabilised in the second half of the fiscal. Also read: <a href="http://www.businessinsider.in/Telcos-to-divide-users-into-segments-like-FMCG-companies/articleshow/58694361.cms">Telcos to divide users into segments like FMCG companies</a> "We are expecting this (revenue growth) for both industry and us. On a full year basis, we are expecting industry should be flat to slight growth and which means industry will recover from Q4 of FY17 to Q4 of next year by 15%," Kapania said. "...the losses that we made in FY17, we will be able to recover." Also read: <a href="http://www.businessinsider.in/Reliance-Jio-will-be-unfazed-by-Vodafone-Idea-merger-Heres-why/articleshow/57509811.cms">Reliance Jio will be unfazed by Vodafone-Idea merger. Here’s why</a> "Customers will move to a superior network and despite the new entrant adding 75 million customers, the losses by the three operators are almost insignificant and we will continue to add subscribers," he added. Also read: <a href="http://www.businessinsider.in/Airtel-seeks-deferred-payment-and-lower-taxes-because-of-stress-from-Jio/articleshow/58629243.cms">Airtel seeks deferred payment and lower taxes because of ‘stress’ from Jio</a> Kapania expects that minutes of voice usage will grow in double digits, with the growth going up to 20-30%. This will make the industry move from double digit data growth to triple digit growth. (Image source YouTube)

Major portion of data customers have returned to Idea, says MD Himanshu Kapania

When it comes to telecom, his dream project Jio, despite gaining both immense popularity and rivals in a short span, is running into losses. Ambani, however, wants Jio to go the <a href="http://www.businessinsider.in/tech/verizons-ceo-just-said-hes-open-to-merger-talks-with-comcast-disney-or-cbs/articleshow/58250423.cms">Verizon Communications</a> way, which became the largest wireless carrier in the United States, enjoying a 5 to 10% percentage points higher return on capital as compared to its competitors. Also read: <a href="http://www.businessinsider.in/jio-to-continue-with-attractive-offers/articleshow/58374710.cms">Jio likely to continue with slashed prices to gain maximum subscribers</a> Since its commercial launch in September last year, Jio has gained more than <a href="http://www.businessinsider.in/small-business/tech/reliance-jio-may-come-with-new-set-of-tariff-plans-to-retain-the-100-million-subscriber-mark/articleshow/57919550.cms">109 million subscribers</a>, thanks to its free trial till March 31st, which has now turned into an <a href="http://www.businessinsider.in/jio-is-back-with-a-new-tariff-plan-jio-dhan-dana-dhan-refuses-to-take-the-heat-for-shut-down-of-its-summer-surprise-plan/articleshow/58129341.cms">attractive tariff plan</a>. Jio is already supplying more than 1 billion GBs per month, which almost matches the data all U.S. networks supply together. Jio also forced market leaders <a href="http://www.businessinsider.in/markets/economy/airtel-and-vodafone-to-keep-price-war-on-to-counter-jio/articleshow/58313681.cms">Bharti Airtel</a>, Idea Cellular and Vodafone India slashing their prices, while Idea and Vodafone also announced their <a href="http://www.businessinsider.in/latest/idea-vodafone-merger-dips-idea-stocks-by-15/articleshow/57729612.cms">merger</a>. Reliance aims to capture <a href="http://www.businessinsider.in/heres-how-reliance-jio-aims-to-gain-50-market-share-by2020/articleshow/57462001.cms">half of market share</a> by 2020. However, as per a report from S&amp;P Global's Indian affiliate, Crisil, the fall in 4G rates has led to a practically flat industry revenue growth, says <a href="https://www.bloomberg.com/gadfly/articles/2017-04-25/ambani-s-verizon-clone-is-a-winner-take-all-bet-on-india-mobile">Bloomberg</a>. The reason why <a href="http://www.businessinsider.in/latest/india-ranks-fourth-in-forbes-list-of-most-billionaires-mukesh-ambani-richest-indian-again/articleshow/57749726.cms">Ambani</a> wants Jio to replicate <a href="http://www.businessinsider.in/tech/verizons-growth-prospects-look-grim-but-theres-a-way-it-could-climb-out-of-the-doldrums/articleshow/58283199.cms">Verizon's</a> success is its history, which shows that market leadership is worth bleeding for. <keyword id="6393116" type="CITY" weightage="100" keywordseo="Verizon">Verizon</keyword> has a customer churn rate of just 1.4%, while in the Indian market, this rate easily lies between 4 to 6%, and took in 45% of its revenue as earnings before interest, tax, depreciation and amortization last quarter. Since Verizon leads the US telecom market, it enjoys a higher return on capital, and it’s this success that Ambani wants to replicate with Jio’s aggressive price war. However, from September to March, Jio's losses tripled from a year earlier and reached $3.5 million, which is even upsetting to the company keeping in mind the $30 billion that Ambani had spent on the 4G network. However, Jio’s investors would be impressed by its ability to get to 200 million stable customers, each one of whom would at least spend $4 a month. Everything said and done, Jio replicating Verizon’s success is a long way ahead, but at least a mark of 200 million subscribers would be a start.

Mukesh Ambani wants Jio to reflect Verizon's success

<keyword id="6355725" type="CITY" weightage="100" keywordseo="Tata-Group">Tata Group</keyword> Chairman <keyword id="97017" type="COMPANY" weightage="20" keywordseo="N-Chandrasekaran">N Chandrasekaran</keyword> handpicked <keyword id="6359480" type="PERSON" weightage="100" keywordseo="Aditya-Birla">Aditya Birla</keyword> Group’s <keyword id="199437" type="PERSON" weightage="20" keywordseo="Saurabh-Agrawal">Saurabh Agrawal</keyword> as the group’s CFO. Agrawal, who oversaw Idea-Vodafone merger among other multi-million deals, was at Aditya Birla's as strategy head. "He (Agrawal) brings deep capital markets knowledge and valuable cross-industry experience to this critical leadership role in the Tata group," Chandrasekaran said in a statement. "His expertise will help us in driving rigour and synergy in capital allocation decisions, investment management as well as consolidation and optimisation of the group's business portfolio. We look forward to his contribution in driving financial performance of the group." In the past, Agrawal was the managing director, regional head of corporate finance, South Asia, Standard Chartered Bank. He was also part of the team that blew the whistle on Satyam founder Ramalinga Raju.

N Chandrasekaran appoints Aditya Birla Group's Saurabh Agrawal as Tata Group’s CFO

<ul><li>The Department of Telecommunications has allowed the raising of the FDI limit in <keyword id="41511" type="CITY" weightage="20" keywordseo="idea">Idea</keyword> from 67.5% to 100%. </li><li>This paves the way for the merger of Idea and <keyword id="15492" type="CITY" weightage="20" keywordseo="Vodafone">Vodafone</keyword>, creating India’s largest <keyword id="6354776" type="COMPANY" weightage="20" keywordseo="Telecom">telecom</keyword> operator with over 430 million subscribers. </li><li>Prior to the final greenlight, however, the DoT needs Vodafone and Idea to clear around ₹57 billion in one-time spectrum charges. </li></ul>India’s telecom market is all set for another disruption. The Department of Telecommunications (DoT) has approved a 100% foreign direct investment (FDI) into the homegrown Idea Cellular, paving the way for its merger with Vodafone’s Indian subsidiary. The merger was first announced in March 2017. The combined entity - Vodafone Idea Limited - will become India’s largest telecom operator, by market share and subscribers, unseating <keyword id="15491" type="COMPANY" weightage="20" keywordseo="Airtel">Airtel</keyword> in the process for the first time in a decade. It will reportedly command a 37% share of the market and have over 430 million subscribers. Up until now, Idea had a FDI limit of 67.5%. The limit had to be raised to 100% in order for the merger to go through. This also includes the complete foreign ownership of Idea’s subsidiaries - Idea Cellular Infrastructure Services and Aditya Birla Telecom. Vodafone will own a 45% stake in the combined entity. Meanwhile Idea’s shareholders will take a 29% stake and Aditya Birla Group, Idea’s parent, will own 26%. The company will be run by Balesh Sharma, the current chief operating officer of Vodafone India. The Idea-Vodafone merger comes amid a wider trend towards consolidation in the telecom sector. Bharti Airtel is in the process of purchasing the Indian operations of Telenor. One last approval However, before all this can go through, DoT needs Vodafone and Idea to clear around ₹57 billion in one-time spectrum charges (OTSC). As per the mergers and acquisitions policy for the telecom sector, all spectrum dues need to be cleared ahead of a merger. The companies might be able to challenge this in court, but will still need to provide a bank guarantee to get the DoT’s approval. The merger is slated for completion within the next few months. The managing board of Idea has called for a meeting <a href="https://economictimes.indiatimes.com/markets/stocks/news/idea-to-become-vodafone-idea-plans-to-raise-rs-15000-crore/articleshow/64417846.cms">later in June</a> to consider all the requirements for the merger, including the name change and a proposal to raise ₹150 billion worth of debt capital. Despite its large size, it won’t exactly be smooth sailing for the combined entity. Domestic rivals Airtel and Reliance <keyword id="2003276" type="PERSON" weightage="20" keywordseo="Jio">Jio</keyword> will put up a tough fight for control of India’s telecom sector, which is currently characterised by heavy price competition and loss leadership.

Idea and Vodafone are a step closer to becoming India’s largest telecom operator

<a href="http://www.businessinsider.in/searchresult.cms?query=mukesh+ambani&amp;sortorder=effectivedate">Mukesh </a><a href="http://www.businessinsider.in/searchresult.cms?query=mukesh+ambani&amp;sortorder=effectivedate">Ambani</a>-led <a href="http://www.businessinsider.in/searchresult.cms?query=reliance+jio&amp;sortorder=effectivedate">Reliance Jio </a>is giving top telecom players a tough time who are sweating it out to retain their loyal customers. 
 
In the latest development,<a href="http://www.businessinsider.in/searchresult.cms?query=airtel&amp;sortorder=effectivedate"> Airtel </a>is considering to drop its roaming charges on voice and data as Jio has assured free voice calls for life. 
 In a bid to survive the pricing war, <keyword id="15491" type="COMPANY" weightage="100" keywordseo="Airtel">Airtel</keyword> may not charge any premium on <a href="http://www.businessinsider.in/searchresult.cms?query=roaming+charges&amp;sortorder=effectivedate">roaming</a>. 
 
"The company is all set to offer free incoming calls/ SMSes on national roaming and there will be no premium on outgoing calls,” a person told ET, adding that there will be no additional data charges on national roaming. 
 
Airtel will also simplify its international plans for the ease of consumers. 
 
Apart from Jio, Airtel is facing a potential threat from <a href="http://www.businessinsider.in/searchresult.cms?query=idea+vodafone+merger&amp;sortorder=effectivedate">Idea-Vodafone </a>merger as well. 
 
Airtel’s move also comes after Vodafone dropped charges on incoming calls while on roaming. However, roaming charges on outgoing calls or on data usage continue to apply to its customers. 
 
The telecom players, apart from losing customers, are also facing the risk of lowering revenues. 
 
Bharti reported a 55% plunge in net profit in the December quarter, its worst in four years, on a first-time drop in revenue, while Idea posted its first ever net loss since listing in 2007.

You Searched For "idea vodafone merger" and got 6 results

Idea-Vodafone merger dips Idea stocks by 15%

BI India Bureau

Major portion of data customers have returned to Idea, says MD Himanshu Kapania

BI India Bureau

Mukesh Ambani wants Jio to reflect Verizon's success

BI India Bureau

N Chandrasekaran appoints Aditya Birla Group's Saurabh Agrawal as Tata Group’s CFO

BI India Bureau

Idea and Vodafone are a step closer to becoming India’s largest telecom operator

Dilsher Dhillon

Reliance Jio is forcing telecom players to tweak their plans; Airtel may drop roaming charges

BI India Bureau

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