Kumar Mangalam Birla has been appointed to be the Chairman of the new Idea-Vodafone entity that has emerged, following the official confirmation of the much awaited merger of the two telecom companies. The merger is projected to create India’s largest telecom operator with the widest 3G/4G network, a 43 percent share of revenue and more than 40 crore subscribers.
I am pleased and honoured to be the chairman of the new company. It gives me immense pleasure that we reached to an agreement to merge our companies Idea Cellular and Vodafone. We are number two and number three companies at present in the telecom sector with a customer base of 400 million,” Kumar Birla said.
The Chief Financial Officer of the entity will be nominated by Vodafone, as per Vittorio Colao, the CEO of Vodafone. Colao also said, in an interview along with Kumar Mangalam Birla, that he sees “5 players in the long term,” in the telecom industry. He also said that the arrival of data has brought about this change, and that going ahead, this new entity will become the number one or number two in all circles, barring J&K.
As per the planned structure of the merger, Vodafone India (VIL) and its wholly-owned subsidiary Vodafone Mobile Services (VMSL) will also merge with the newly formed company. VIL’s turnover, at present is Rs. 5,025 crore; and that of VMSL is 40,378 crore, while Idea Cellular’s turnover is Rs. 36,000 crore. VIL’s net worth is Rs. 12,855 crore, VMSL’s is Rs. 3,737 crore and that of Idea is Rs. 24,296 crore, respectively.
Vodafone’s 42 per cent stake in the tower company Indus towers has been excluded from the deal.
Idea Cellular will also hold the right to acquire more shares from Vodafone under an agreed mechanism with the intention of equalizing the shareholdings over time, according to a joint statement by the two companies.