DoT to clear mergers of Airtel-Telenor, Vodafone-Idea: Aruna Sundararajan

By Kiran Rathee , Business Standard, New Delhi | In Digital | May 11, 2018
Go-ahead for Airtel-Telenor deal is likely within a month whereas that of Vodafone-Idea will also be granted shortly as DoT does not want to create any delays.

The Department of Telecommunications (DoT) is expected to clear the mergers of Bharti Airtel-Telenor and Vodafone-Idea soon, a move that will bring some stabilisation in the telecom sector currently battling financial stress.

According to Telecom Secretary Aruna Sundararajan, the go-ahead for Airtel-Telenor deal is likely within a month whereas that of Vodafone-Idea will also be granted shortly as DoT does not want to create any delays.

Department of Telecommunications

The Supreme Court had yesterday dismissed DoT's plea challenging telecom tribunal TDSAT order asking the government to clear merger between Airtel and Telenor India without insisting for a bank guarantee of about Rs 1,500 crore from Airtel towards one-time spectrum charges (OTSC) for holding spectrum beyond 4.4 MHz. The SC order came as a relief to telecom industry, which is currently witnessing several mergers and takeovers.

The DoT will now process the Airtel-Telenor deal "very shortly". The SC order directing DoT not to insist for a bank guarantee for OTSC in merger proceedings of Airtel-Telenor could also help Vodafone-Idea deal as the same criteria may be applied to them also. Asked if the SC ruling can be applied to Vodafone-Idea deal, Sundararajan said, "We will have look at each case differently", indicating that the rules of OTSC would not be generic. She, however, added that DoT would not create delays for the Vodafone-Idea merger.

The Secretary, who was speaking on the sidelines of CII broadband summit, said the Department of Industrial Policy and Promotion (DIPP) and the ministry were working closely to ensure they did not create any bottlenecks for the merger. "We go through the due diligence and expedite the clearances....at the same time, we are working with the company to ensure there are no delays from our side," she added.

Vodafone and Idea Cellular had announced that the merger would be completed by June. Meanwhile, sources said the DoT is likely to give its clearance by end of this month or early June for Vodafone-Idea merger without asking for a bank guarantee for OTSC as the matter was already stayed by SC earlier when Vodafone merged its various subsidiaries in India. Sources further added that in order to meet the June deadline, Vodafone and Idea have to get DoT's clearance early as it usually take 2-3 weeks after DoT approval to seek the final clearance from NCLT.

The merger of Vodafone-Idea will create the country's largest mobile operator with a subscriber base of over 400 million. Also, the merged entity will lead the market with the highest revenue share of about 37 per cent followed by Bharti Airtel with a share of about 31.2 per cent.

The companies had earlier this year announced a restructuring of the leadership team for the merged business that would have Kumar Mangalam Birla at the helm as the non-executive chairman. Vodafone insider and current Chief Operating Officer (India) Balesh Sharma would be chief executive officer (CEO) of the merged entity.

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