Idea Cellular and Vodafone have made a joint payment of Rs 7,248.78 crore under protest to the Department of Telecom for merging their mobile business.

Rs 3,926.34 crore has been paid to the telecom department in cash and bank guarantee of ₹ 3,322.44 crores have been furnished, says Idea Cellular.

The Department of Telecom gave a conditional nod for merger of these companies on July 9 and asked companies to meet the demand raised for taking merger on record.

The Vodafone-Idea merger will create India’s largest telecom operator, displacing Bharti Airtel Ltd. It will be worth over $23 billion (about ₹ 1.5 trillion) with a 35% market share and a subscriber base of around 430 million. The merger is expected to come as a breather to both Idea Cellular and Vodafone—battered by Reliance Jio Infocomm Ltd’s aggressive push into India’s telecom market.

Vodafone Idea Ltd, as the merged entity, will be called and it will have the capacity to provide 4G spectrum in all telecom circles of the country. According to a presentation by Idea, the combined 4G spectrum of both the companies is capable of offering up to 450 megabits per second broadband speed on mobile phones in 12 Indian markets.

In combined, both the companies have debt around Rs 1.15 lakh crore.

Vodafone will own 45.1 stakes in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group would have 26 percent and Idea shareholders 28.9 percent.

The Aditya Birla Group has the right to acquire up to a 9.5 percent additional stake from Vodafone under an agreed mechanism with a view to equalizing the shareholdings over time.

If Vodafone and the Aditya Birla Group’s shareholdings in the combined company are not equal after four years, Vodafone will sell down shares in the combined company to equalize its shareholding to that of the Aditya Birla Group over the following five-year period.

Until equalization is achieved, the voting rights of the additional shares held by Vodafone will be restricted and votes will be exercised jointly under the terms of the shareholders’ agreement.

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